TSANG LING MAN v. TSANG TSE KIN

HCA 10785/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10785 OF 1999

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J U D G M E N T

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Background

1. This action arises out of the estate of one Mr. Tseng Yu Hao who died domiciled in Hong Kong on 23 September 1973 ("the Deceased"). The Deceased had 3 children. Tseng Chee King and the defendant are the elder 2 sons and Tsang Suk Han is the youngest daughter. Both Tseng Chee King and Tsang Suk Han ("Madam Tsang") had died. Tseng Chee King had 2 spouses, each of them have given birth to 5 children. The plaintiff is one of the sons born out of the union between Tseng Chee King and Madam Poon Tin Heung ("Madam Poon"). The defendant has 4 children. Madam Tsang, who resided in Taiwan, also had 4 children.

2. The Deceased made his last will on 14 December 1961 ("the Will") and a codicil on 9 February 1968 ("the Codicil"). The defendant and Madam Poon were appointed the executors by the Will. Probate was granted on 12 June 1991 to the defendant as proving executor with power reserved to Madam Poon to apply for and obtain a like grant ("the Probate").

3. The estate of the Deceased comprises, inter alia, 3 properties. The first is a flat at 4/F. No. 20A D'Aguilar Street, the second and third are land in the New Territories registered under New Territories Administration Memorial nos. 156884 and 160477. In the Codicil, the Deceased devised the 3 properties to the grandchildren of his 3 children respectively. The Codicil also appointed Tseng Chee King and his 2 spouses, the defendant and Madam Tsang as the respective executors and executrices of the 3 properties. The D'Aguilar Street property was devised to the children of Tseng Chee Kin, the land under Memorial no. 156884 to the children of Madam Tsang and that under Memorial no. 160477 to the defendant's children.

4. The land registered under Memorial no. 156884 comprises 4 pieces of land known as lot nos. 852, 1114, 1186 and 1308B/RP, all of D.D. No. 78 (collectively referred to as "DD 78"), which were acquired by the Deceased in 1965 at the stated consideration of $29,000. As for the land under Memorial no. 156884, it comprises one plot of land known as D.D. No.89 lot no. 672 ("DD 89").

The Action

5. On 5 July 1999, the plaintiff commenced these proceedings against the defendant claiming possession and beneficial rights in DD 78. Both the plaintiff and the defendant act in person in these proceedings. It would appear from the Statement of Claim that the plaintiff is claiming against the defendant in his capacity as the executor of the Deceased's estate, although the plaintiff had not pleaded so. In any event, the defendant makes it plain in his Defence and Counterclaim that he is litigating in his capacity as the executor. The basis of the plaintiff's claim is twofold: firstly, Madam Tsang had renounced and given up the rights in DD 78, and secondly, he has been in adverse possession of DD 78 for more than 30 years.

6. The defendant denies the plaintiff's claim and counterclaims for a declaration that he is entitled to vest DD 78 unto the children of Madam Tsang as specific devisees according to the Will and the Codicil, and for an order that the plaintiff renders an account of the rents or other payments he had received from DD 78, after taking into account the government rent paid by him.

7. The plaintiff in his Reply, which is in effect a Reply and Defence and Counterclaim, states that he also claims for the beneficial right in DD 89. He has however taken no step to amend the Statement of Claim to include DD 89 in his claim. At the trial, he asked that the trial proceeded on the basis that his claim covers both lots on the basis that DD 78 and DD 89 are both registered in the District Lands Office under Volume 104 p.43 of the Register, and that the cause of action for both lots is in adverse possession. This was objected to by the defendant.

8. In my view, the plaintiff ought not be permitted to proceed with DD 89 in this action. Procedurally, a party cannot add a new claim without amending the Statement of Claim, even though he may have alluded to it in his Reply. It is also to be noted that the plaintiff could have raised this and sought leave to add to his claim when the parties attended before the court for directions and leave to set down the case for trial. The plaintiff had done nothing of the sort. Secondly, there is clearly an element of surprise here. The defendant has proceeded on the basis that the claim was only in respect of DD 78, as is evident from the discovery made and witness statement filed. Although the Court is always prepared to give indulgence to parties acting in person, that has to be within limits. This is not a case where the interest of justice demands that the plaintiff be allowed to proceed with an additional claim at the trial. The plaintiff's claim herein is therefore confined to DD 78.

9. The plaintiff indicated that he preferred to conduct the proceedings in English whereas the defendant asked for the trial to be conducted in Chinese. Both of them in fact speak and understand both languages. The pleadings are in English whereas some of the documents are in English and some in Chinese. In the end, the trial was conducted bilingually with the parties being at liberty to address the Court in either language as they felt comfortable. The evidence was however taken in the Cantonese dialect.

10. Broadly speaking, the issues to be resolved in this action are:

(1) Whether the legal and beneficial rights in DD 78 had been renounced and given up by Madam Tsang and/or her children;

(2) Whether the plaintiff has acquired the beneficial interest in DD 78 by reason of the doctrine of adverse possession; and

(3) If the answer to (2) is in the negative, is the defendant entitled to the declaration and order for account sought in the Counterclaim.

The Evidence

11. The plaintiff and the defendant are the only witnesses called at the trial. In addition, the plaintiff had adduced 2 affirmations, unopposed by the defendant. The first is by Madam Poon and the other is by one Tseng Tze Cheih, who is a witness to the Codicil. The parties had also agreed to all the documents, including letters written by the Deceased, the plaintiff and the defendant and Madam Tsang's husband and children, being admitted as evidence notwithstanding that no hearsay notices had been given and that some of the letters and documents were only disclosed lately.

12. The plaintiff testified that he is 53 years of age. He said he first visited DD 78 out of curiosity, but he could not be sure about the year in which he did so. He said it was sometime before the death of the Deceased and in about late 1960s or early 1970s. According to the plaintiff, he located the 4 pieces of land under DD78 on his own. When he first went on the land, he was surrounded and confronted by the local people who demanded to know his identity whereupon he claimed to be the owner and also showed them some documentation. The people believed in him. He found out that DD 78 was vacant land, except in relation to lot no. 1038B/RP, which was farmed by a Yiu Kat Cheung (姚吉祥) ("Yiu"). In 1970, he signed a lease with Yiu letting out lot no. 1038B/RP for 5 years at an annual rental of $25. The plaintiff was described as the landlord or owner (業主) in the lease. The plaintiff said he received $100 from Yiu in the mid-1980s and nothing thereafter. Between 1975 and 1980, the plaintiff was studying in Canada, and he asked Yiu to look after DD 78 for him. Yiu had over the past years gradually reduced his farming activities on lot no, 1038B/RP and had eventually ceased farming the land. Some 8 months ago, the plaintiff placed a container on lot no.1038 B/RP for his own storage purpose. The plaintiff stressed that nobody from the previous generations, including the Deceased, the defendant and Madam Tsang, had paid any attention to DD 78, and that they had effectively abandoned the land. The plaintiff said he was the only one who has been managing DD 78 for the past 30 years and paying its government rent, although it transpires under cross-examination that he has only been paying the rent for the period after 1978.

13. The plaintiff also stated in his evidence that shortly after the Deceased's death, a family meeting was held in which the defendant read out the contents of the Will and the Codicil. Madam Tsang was also present and she expressed that DD 78 was of no value and she would not manage DD 78 and she did not want it. It is common ground that Madam Tsang returned to Taiwan soon afterwards. The plaintiff said he had contacted Madam Tsang once or twice in Taiwan when she was staying in a Buddhist temple. During those contacts, Madam Tsang repeatedly stated that she had no interest in DD 78 and did not want to manage it. The plaintiff then contacted her husband, Mr. Chan, and her children and told them he was managing the land. Mr. Chan was pleased about this and he eventually provided the plaintiff with copies of the Certificates of Identity of Madam Tsang and her children. Mr. Chan asked the plaintiff to deal with DD 78 together with another piece of New Terrorises land registered under Madam Tsang's name. The plaintiff said he considered Mr. Chan was trying to bargain with him, so he decided to proceed to claim the rights in DD 78 on his own, hence this action.

14. Madam Poon and Tsang Tze Cheih stated in their affirmations that Madam Tsang had during the 1973 family meeting and on subsequent occasions indicated orally that she had given up DD 78. Madam Poon said further that it was until recently that she knew that the plaintiff has been taking care of DD 78.

15. As for the defendant, he gave evidence on the background of the Deceased. He mentioned that the Deceased had before his death acquired 2 plots of New Territories land with a view to building and providing a house for Madam Tsang and her children. He produced copies of letters written by the Deceased to Madam Tsang in which the intention was stated. The defendant agreed that there was a family meeting in 1973 during which he read out the contents of the Will and the Codicil. He said he handed over to Madam Tsang the title document(s) relating to DD 78 at the meeting. He understood from Madam Tsang that she had thereafter gone to look at DD 78 and also settle the outstanding government rent. This piece of evidence is of course hearsay and no weight can be attached to it. It remains unknown who had settled the government rent for the period before 1978. According to the defendant, he maintained no contact with Madam Tsang after her return to Taiwan.

16. The defendant explained that there are 3 litigations arising out of the estate of the Deceased. The first was HCMP 3680/93 in relation to the construction of the Codicil in respect of the D'Aguilar Street property. The second was High Court Action A7456/95 in which Madam Poon claimed to be entitled to the D'Aguilar Street to the exclusion of the children of Tseng Chee King's other spouse, notwithstanding the terms of the Will and the Codicil. This action is the third action. The defendant was named a defendant in all these actions as he is the executor. The defendant pointed out that because of the other 2 actions, he had not taken any step to vest DD 78 into the children of Madam Tsang for he had been advised that the estate may be ordered to bear the costs of the litigations. Indeed in High Court Action A7456/95, the Court had ordered that the costs of the successful defendants be paid out of the estate, as a result of which the defendant wrote to and re-established contact with Madam Tsang's children in Taiwan early this year.

17. The defendant's evidence is that Madam Tsang never formally renounced or disclaimed the rights in DD 78. He produced copies of letters exchanged between the plaintiff and Mr Chan in which the plaintiff requested for documents of identity of Madam Tsang to enable him to deal with DD 78 and Mr Chan in reply requested for further documentation on the land. The defendant also produced letters from Madam Tsang's children requesting the defendant to vest DD 78 unto them. The defendant disputed that DD 78 has been abandoned and the plaintiff has been managing DD 78 for the past 30 years.

18. I do not consider the plaintiff and his evidence reliable and credible. In particular, I have grave reservations over his account that he has been managing and controlling DD 78 for over 30 years. Firstly, he was reluctant to commit himself as to the time he first visited the land. While he said he went there out of curiosity, he did not explain how it was that he came to learn about DD 78, that the Deceased had acquired it but did not attend to it and what was it that aroused his interest and curiosity. It is also strange that he had to represent himself as the owner when being questioned about his identity. He could have, and one would expect him, to tell the local people that he was the grandson of the owner. This is especially so when, according to him the Deceased was still alive when he made the first visit. Surely, he would not have formed any intention to adversely possess or claim the land at that time. That being the case, why did he have to claim to be the owner and go to such extent as showing documentation to convince the local people that he was the owner. It also remains a myth as to what documents he had shown to the local people to substantiate his claim that he was the owner. What is even more strange is the fact that he had only paid the government rent for the period after 1978. In his Statement of Claim, the plaintiff pleaded that "for around 30 years", he has been "paying the Crown Rents". It was only under cross-examination that he stated that he paid for the government (or Crown) rent for the years 1978 to 1997 in one go on 23 February 1996. It is not the case that he paid for the rents as and when they fell due, which was the impression he gave in his pleadings. The plaintiff tried to explain this away by saying that it was inconvenient to travel to Tai Po to make the payments, so he delayed until 1996 when he got the time to do it and when it was eminent ("迫近眼眉"). I am unable to see the urgency or why it was eminent in 1996 when, it is also the plaintiff's evidence that the government will permit arrears in government rent to accrue up to $100 and that the rent accrued up to 1996 was under $40. I find it hard to accept that it was so inconvenient for the plaintiff to travel to the District Lands Office in Tai Po to pay the rent when, according to him, he was regularly visiting DD 78, which is clearly much more inaccessible and remote. On the other hand, it is obvious that someone other than the plaintiff had been paying the rent up to 1978. That contradicts the plaintiff's assertion that DD 78 has for a long time and in the last 30 years or so been abandoned or left unattended to. It also does not support his case that he has been managing and attending DD 78 since 1960s or early 1970s.

19. In addition, while the plaintiff pleaded in the Statement of Claim that he has been collecting rent from all the farmers for almost 30 years, he clearly retracted from that position in his evidence. On his evidence, there was only one farmer and no rent has been collected by him since mid-1980. When being asked about the condition, the activities on and the use put to lot no. 1038B/RP, the plaintiff was extremely imprecise and prevaricating. He did not impress me as one who has been regularly visiting and managing the land and is familiar with it.

20. In a similar way, the plaintiff was hesitant in his evidence about the contact he made with Madam Tsang and Mr Chen and their children. He is not forthcoming at all. Having listened to his evidence and looking at the letters exchanged between him and Mr Chan, I have a distinct impression that the plaintiff recognised fully the rights of Madam Tsang's children in DD 78 and the lack of rights and interests on his part. The plaintiff's evidence is that he only told Mr Chan and Madam Tsang's children that he was managing DD 78, but not that he had "trespassed" it. It would also otherwise be difficult to understand why he should explain to Mr Chan that because the D'Aguilar Street property had to be shared with his half-siblings that he had to look to DD 78. The evidence is inconsistent and incompatible with the plaintiff's assertion that he considers DD 78 had been abandoned and given up by Madam Tsang. Neither affirmations of Madam Poon and Tsang Tze Cheih took the plaintiff's case any further.

21. In short, I reject the plaintiff's account that he has for more than 30 years managed and controlled DD 78 to the exclusion of the true owner.

22. As for the defendant, he strikes me as a straightforward and candid witness. There is a ring of truth in his evidence. I accept his account and where it conflicts with that of the plaintiff's, I prefer his to the plaintiff's.

Disclaimer or Renunciation of DD 78 by Madam Tsang

23. The plaintiff does not dispute that Madam Tsang had never in writing disclaimed any of the rights in DD 78. What the plaintiff relies upon is what Madam Tsang said at the 1973 family meeting. According to the plaintiff, she had said that she would not manage the land, that it was of no value, that the others could manage it and she did not want it (我唔理、塊地唔值錢、你地理、我唔要). These utterances, however, hardly support a case of disclaimer or renunciation of rights. At the most, they only indicate that Madam Tsang did not want to manage or look after DD 78. Not only that, Madam Tsang had accepted from the defendant the title document(s) relating to the land. This goes a long way to negative any suggestion that she was giving up DD 78.

24. On the other hand, it is to be noted that Madam Tsang was only an executrix in respect of DD 78. Under the Codicil, the interest in the land was not devised to her, but to her children. As an executrix, she had no right to disclaim or renounce the rights and interest of her beneficiary children. Her 4 children were born between 1960 and 1972, and were therefore infants in 1973. There is grave doubt as to whether the interest of these infant children can be validly disclaimed and extinguished by the mere utterances by Madam Tsang. The burden is on the plaintiff to establish this and the plaintiff has failed to discharge the burden.

Adverse Possession

25. What constitutes adverse possession is a question of fact and degree depending on the circumstances of each case. Generally speaking, the factual possession relied upon has to be sufficiently exclusive, although the person claiming adverse possession does not necessarily have to make physical use of the whole of the land. There must also be an intention to take possession to the exclusion of all others, including the owner (animus possidendi): Halsbury's Laws of England (4th edition Re-issue) vol. 28 paras. 977-9.

26. I have, for he reasons set out above, rejected the plaintiff's account that he has managed and controlled DD 78 for the past 30 years to the exclusion of others, including the true owner. As such, the fundamental factual premises on which to found the action in adverse possession are lacking, and, on this ground alone, the plea must fail.

27. Even accepting the plaintiff's case at the highest, he has merely been visiting the land on a regular basis, had granted a lease over part of DD 78 and had in 1996 discharged the arrears in government rents. On his evidence, he has taken no step to keep off other trespassers. Quite the contrary, he said that one Yeung Pik Shan had fenced off lot no. 1114 and Yeung gave him a key to the gate. The plaintiff's evidence simply does not show that he has continuous possession or control or an intention to possess DD 78 to the exclusion of all others, let alone for 30 years. As such, the essential ingredients for the plea of adverse possession to succeed in law are wholly lacking. There is thus no basis for the claim in adverse possession.

The Counterclaim

28. Paragraph 2 of the Codicil that deals with DD 78 reads as follows:

"In this Codicil I direct that the incomes from my properties registered by the New Territories Administration Memorial No. 156884 (13th December 1965) shall be devised and given to my grandchildren born to my daughter and her mother. I appoint my daughter - Tsang Suk Han - as executrix of the properties under this New Territories Administration Memorial No. 156884."

29. On the face of it, it will appear that the Deceased had only devised the incomes from DD 78 to the children of Madam Tsang. Both the plaintiff and the defendant however are in agreement that "incomes" should include the sale proceeds of DD 78. They derive support from an order made by Deputy High Court Judge Yeung (as he then was) in HCMP 3680/93. In those proceedings, the Court was asked to construe paragraph 3 in the Codicil which deals with the D'Aguilar Street property. That paragraph is almost identical to paragraph 2 save in relation to the description of the property and the names of the devisees and executors. Deputy Judge Yeung construed paragraph 3 to mean that all the 10 children of Tseng Chee King are entitled to the incomes of the property and also the corpus of the property in equal shares, and further ordered that the D'Aguilar Street property be vested in the said devisees in equal shares. The precise reasons and basis for the order are not known as the defendant only produced a copy of the Order. One possible rationale for the Order is the legal doctrine that an indefinite gift will carry with it the corpus and since the income was devised for an inefinite period under the Codicil, it can be regarded as an indefinite gift and therefore carries with it the corpus of the property. Arguably, the same rationale and construction can be applied to paragraph 2 of the Codicil.

30. Before this Court can accede to the defendant's Counterclaim for a vesting order in favour of the children of Madam Tsang, this Court has to decide on the construction to be given to paragraph 2, whether not only the incomes, but also the corpus of DD 78 had been devised unto Madam Tsang's children. The decision on construction and the vesting order can only be properly made in an administration action and when all the necessary and interested parties are before the Court. In this action, Madam Tsang's children are not parties and they are not bound by any decision and order made herein. On the other hand, they have not been afforded an opportunity to be heard. Therefore, as a matter of procedure, this Court cannot and should not grant the vesting order sought. I will also observe that, in a normal case, an executor does not need a court declaration before vesting a property of the estate unto the beneficiaries entitled to it. The Court's intervention and assistance should only be sought when there is a dispute or ambiguity. In this case, with the plaintiff's claim falling away, there is no reason why the defendant cannot carry out the terms of the Will and the Codicil without resorting to the Court unless the devisees are in disagreement or unless the defendant considers that there is an ambiguity.

31. As to the part of the Counterclaim seeking an account from the plaintiff, the plaintiff had admitted to managing DD 78, collecting rental arising from it and making use of the several lots of land thereunder. There is therefore a duty on the plaintiff's part to account to the estate, acting through the executor, the income and payments received by him, after deducting the government rents he had paid. There will be an order to this effect. The plaintiff should in addition be ordered to pay to the estate the sum found due from him to the estate upon the taking of the account.

Costs

32. There is no special reason for departing from the general rule that costs should follow event. There will therefore be an order nisi that the plaintiff pays the defendant the costs of this action.

33. Having regard to the fact that both parties are acting in person, I consider it too cumbersome to direct for the costs to be taxed. It will be more in the interest of justice to make a lump sum costs order in lieu of taxation under Order 62 rule 9(4) of the Rules of High Court, cap. 4 so that the parties will not have to incur further time and costs in having the costs taxed before the taxing master.

34. In deciding on the amount of the lump sum costs order, I take into account the following matters:

(1) The costs to be awarded to the defendant should compensate him for the time he spent in reading and preparing the pleadings and documents for the action, the time he spent attending court, travelling and photocopying expenses.

(2) The pleadings in this action consist of a Statement of Claim, a Defence and Counterclaim and a Reply, the contents of which are not lengthy.

(3) Apart from attending for purposes of filing documents, the parties had attended Court on 4 occasions. The first was before the master for directions after close of pleadings. Another time was before the listing judge for leave to setting down. The third time was before the listing officer to fix the trial date, and the last one was the trial, which lasted for 1 day.

(4) The defendant had prepared 3 sets of hearing bundle and supplemental bundle with each set consisting of 154 pages. One set had been served on the plaintiff before the trial. The defendant had also been served with the plaintiff's document bundle, which is in effect a reproduction of the plaintiff's list of documents.

The amount of costs is fixed at $10,000.

Conclusion

35. For the reasons above,

(1) The plaintiff's claim is dismissed.

(2) The part of the defendant's Counterclaim praying for a vesting order is dismissed.

(3) There will be judgment on the Counterclaim for:

(a) An order that the plaintiff do render to the defendant, as executor of the estate of the Deceased, an account of the rent and other payments he had received in respect of lot nos. 852, 1114, 1186 and 1038B/RP of DD No. 78, after deducting the government rents paid by him

(b) An order that the plaintiff do pay to the defendant, as executor of the estate of the Deceased, such sums as may be found and certified due from the plaintiff to the estate of the Deceased together with interests upon the taking of the account as aforesaid.

36. I also make an order nisi that the plaintiff pays the defendant the costs of this action in the sum of $10,000. The order nisi to be made absolute after the expiration of 14 days from the handing down of this Judgment.