YU KIT CHIU AND ANOTHER v. CHAN SHEK WOO t/a "陳潮昌士多"

DCCJ 5488/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5488 OF 2003

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BETWEEN

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JUDGMENT

Background

1.  The Plaintiffs are the executors of the estate of the deceased Yu Ki Cheung, who was the registered owner of Lot 994 in D.D. 115 ("Lot 994") in Yuen Long, the adjacent Lot 995 in D.D. 115 ("Lot 995") and what is identified as the Remaining Portion of Lot 994. The Defendant ("Mr. Chan") claims that he and members of his family have been occupying the Remaining Portion of Lot 994 ("Site") since 1962. The Plaintiffs claim that Mr. Chan's occupation of the Site was unauthorized, and seek by these proceedings an order for possession of the Site and damages for trespass. By way of defence and counterclaim, Mr. Chan claims that he has been in adverse possession of the Site for over 20 years, and seeks a declaration that the Plaintiffs' right to recover possession was time-barred at the time of the issue of the Writ in these proceedings in September 2003.

2.  It is not in dispute that Mr. Chan and his family have occupied the Site and had erected structures on the Site for use as a residence, for rearing chickens and pigs initially, and later for operation of a grocery store. The Plaintiffs say that such occupation began some time prior to 1978. Mr. Chan claims that he had built a wooden hut on the Site in 1962.

3.  The Plaintiffs claim that the late Mr. Yu had entrusted the management of the lands which he owned in the New Territories, including Lot 995, Lot 994 and the Site, to one Wong Pui ("Mr. Wong"), who would let out the lands, collect the rent from the occupiers and account to Mr. Yu for such rent collected. The Plaintiffs claim that Mr. Wong had granted a licence to Mr. Chan to use and occupy the Site, and that Mr. Chan had paid an annual licence fee to Mr. Wong on behalf of Mr. Yu.

4.  On his part, Mr. Chan denies that he had paid any licence fee to Mr. Wong or to anyone on behalf of the registered owner of the Site.

5.  It is not disputed that on 8 May 1970, a Modification of Tenancy was issued by the Yuen Long District Office under Permit No. 16222 ("Permit") in respect of the Site. By virtue of the Permit, the Government permitted the modification of the Crown Lease under which Lot 994 was held to the extent that structures including accommodation, a porch, a kitchen and a latrine were permitted to be maintained on the Site for the period between 1 April 1970 and 31 December 1970, in consideration of payment of a permit fee. Mr. Yu was stated to be the owner, and Mr. Chan signed the Permit as "Permitee on behalf of the registered land owner". The parties accept that the Permit continues to exist by virtue of the continued payment of the annual permit fee and the automatic annual renewal of the Permit.

6.  It is also not in dispute that by December 1985, a Short Term Waiver had been proposed by the Yuen Long District Lands Office to be granted in respect of the Site, whereby the property was permitted to be converted for non-agricultural building purposes, and for Mr. Chan's use of the shop to be continued on the Site. The Short Term Waiver was finally issued on about 18 December 1986 ("Waiver"). The Plaintiffs claim that this was granted with their consent, as evidenced by the letters dated 23 January 1985, 20 February 1986 and 10 March 1986 from the Plaintiffs' solicitors to the District Lands Office ("DLO"). Mr. Chan denies knowledge of the issue of the Waiver in 1986, and further denies being party to any correspondence between the DLO and the Plaintiffs in relation to the Waiver.

Issues

7.  The issues for determination at trial are:

(1)  whether Mr. Chan has been in possession of the Site for more than 20 years next before September 2003;

(2)  whether Mr. Chan had been in possession of the Site under licence by or with the consent of the registered owner;

(3)  whether Mr. Chan had the intention to possess the Site to the exclusion of the world at large, including the registered owner;

(4)  the damages payable by Mr. Chan for his occupation of the Site, if adverse possession is not established.

8.  The effect and the circumstances leading to the issue of the Permit and the Waiver have bearing on issues (2) and/or (3) identified above.

Legal Principles

9.  The legal principles on adverse possession are clear. In the absence of evidence to the contrary, the owner of the land with the paper title is deemed to be in possession of the land. To establish adverse possession, the burden is on the squatter to prove that he has both factual possession of the land and the requisite intention to possess, and that the possession was adverse to the owner.  As pointed out by Nourse LJ in Buckinghamshire County Council v. Moran [1990] 1 Ch 623, and as applied by Li CJ in Wong Tak Yue v. Kung Kwok Wai & Another [1998] 1 HKLRD 241, adverse possession can be described as "possession as of wrong" and it is the intention of the squatter that is essential. The requisite intention to possess 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" (Powell v. McFarlane (1979) 38 P & CR 452, at 471-472). 

10.  It is a well established principle that the question of intention to possess is one of fact, and whether it can be established depends on an assessment of all the circumstances in a particular case (Wong Tak Yue v. Kung Kwok Wai, supra, at 250).  On the question of intention to possess, Li CJ observed at p.250 of his judgment in Wong Tak Yue, supra :

"Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism.  The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they may deserve.  Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight."

Whether Mr. Chan has been in possession of the Site for more than 20 years next before September 2003

11.  Bearing in mind the Chief Justice's reminder in Wong Tak Yue, that self-serving statements made by the occupier as to his intentions should be viewed with skepticism, the claims made by Mr. Chan and his family with regard to their intention to claim the Site as Mr. Chan's own as early as in 1962 should be examined against such independent and contemporaneous evidence as is available.

12.  It is also natural that given the lapse in time and the failing or failed memory of the witnesses, including the senile Mr. Chan and the aged Mr. Fung who gave evidence on his behalf, the accuracy of the memory of the witnesses has to be approached with some caution. Comparison with contemporaneous documentation is always an aid to testing the reliability of oral testimony, unless there is reason to believe that the documentation is contrived or materially incomplete. Where the passage of time between events and trial is long, it would generally be appropriate to place more reliance on contemporaneous documentation.

13.  Mr. Chan claimed in his Statement made on 10 September 2008 that in about 1962, he cleared the Site with the assistance of his friend Mr. Fung, and built a wooden hut on the Site, intending to use it as a residence for himself and for his wife and children who were applying to come to Hong Kong from China. He claimed that with the assistance of Mr. Fung and his other friends, he erected a surrounding wall, a wire mesh and a metal gate to prevent others from entering the Site. After the arrival in Hong Kong of Mrs. Chan and their son and daughter, Mr. Chan continued to expand the area of his occupation of the Site, by erecting sheds to rear pigs and chicken, and by building more structures on the Site for accommodation by his expanding family and for running a business of making noodles for humans and supplying feed for chicken and pigs. By 1978, a licence was obtained for Mrs. Chan to sell liquor at the shop which was operated on a part of the Site.

14.  Mr. Chan was not available to be cross-examined at trial, as he was certified by his doctor to be suffering from senile dementia. Bearing in mind the considerations relevant to the weighing of hearsay evidence as set out in s.49 of the Evidence Ordinance, the caution against self-serving declarations set out in Wong Tak Yue, and the fact that the matters relating to the date of Mr. Chan's possession and the extent of his use of the Site are at the core of the dispute, I attach very little weight to Mr. Chan's witness statement.

15.  Mr. Fung, who had known Mr. Chan for over 46 years, did give evidence at trial, but his testimony is largely unreliable, bearing in mind that he expressed no clear recollection about the dates of the events he had referred to in his Statement made in July 2008. He also retracted the statement which he had made, that Mr. Chan had brought him to the Site in about 1962 when it was bare, and when Mr. Chan had allegedly told Mr. Fung that he (Mr. Chan) would occupy the Site. The only matters which emerged from Mr. Fung's evidence is that : (1) he had been to the Site with Mr. Chan at some unknown time before Mr. Fung's son was born, and that his son is now 46 years old; (2) there were already some low wire mesh and a fence at the Site on the first occasion of his visit to the Site with Mr. Chan; (3) he had helped Mr. Chan at different times doing odd jobs on the Site, including mending or repairing the wire mesh when it was broken, but had not helped in the erection of the hut or the structures; and (4) at some point in time, he had seen Mr. Chan's wooden hut and pig shed on the Site.

16.  According to the evidence of Chan Wai Chung ("Chan Junior"), Mr. Chan's eldest son, he came to Hong Kong with his mother and his sister in 1965. Chan Junior claims that upon his arrival in Hong Kong, the wooden hut had already been erected at the Site, and that there was a low wall, wire mesh and a metal gate surrounding the hut. The hut was used by the family as accommodation and to make noodles. The shed for chicken and pigs was erected soon after Chan Junior's arrival in Hong Kong, and thereafter, Mr. Fung and others had helped Mr. Chan to erect another structure on the Site to use as a workshop for making noodles and animal feed. According to Chan Junior, he had helped to produce animal feed at the Site when he was attending primary school, and when he completed primary six schooling in 1972, he started to work in the grocery store which his parents were operating at the Site.

17.  The evidence adduced by Mr. Chan, Mr. Fung and Chan Junior should be tested against the independent and contemporaneous documents. The latter show that Mrs. Chan, Chan Junior and his sister were recorded to have arrived in Hong Kong from China on 6 December 1965, as evidenced by the Immigration records.  The Survey Report of Leung Shou Chun Land Surveying Consultants Ltd. dated 15 July 2008, which is produced on behalf of Mr. Chan, contains aerial photographs and survey sheets available from the Survey and Mapping Office of the Government. According to the surveyors' photo study, no structure could be found on the Site as late as 24 February 1963, but according to the aerial photograph dated 16 December 1964, a structure which appears to coincide with the location of what Mr. Chan described to be the wooden hut erected by him can be detected at the Site. The structures described by Mr. Chan to be the grocery store and the shed for chicken and pigs can also be detected from the aerial photograph dated 8 May 1967. By 1971, more structures on the Site can be detected from the Government survey sheets.

18.  The contemporaneous evidence produced on behalf of Mr. Chan includes 2 letters written by Mr. Chan to the DLO, respectively dated 21 January 1969 and 1 April 1969. So far as these contain Mr. Chan's assertions that he had occupied the Site and had kept sheds for pigs and chicken at the Site, these again constitute self-serving statements made by Mr. Chan for the purpose of seeking indulgence from the DLO at the material time, and I regard them with the same skepticism as I do in respect of the declarations made in Mr. Chan's Statement as to the period of his occupation of the Site. This is particularly so when Mr. Chan had stated in these letters of 1969 that he had occupied the site for over 10 years, when even on his own case as advanced in these proceedings, he had only commenced possession of the Site in 1962. The references in the letters to "over 10 years" were clearly examples of exaggeration.

19.  Other relevant documents are the Permit itself which refers to the existence of quarters for accommodation, a kitchen and a latrine at the Site by 8 May 1970; a deposit receipt relating to an account with the China Light & Power Co. Ltd. issued to Mr. Chan at the address at the Site on 9 March 1972; and the issue of a licence to Mrs. Chan to sell liquor at the address at the Site in March 1978.

20.  Mr. Chan claims in his Statement that it was only after his family came to Hong Kong that he started to produce noodles from the wooden hut, and that hitherto, he had been working at a place at Man Li Yuen in Yuen Long, where he had also lived until (he claims) he built his hut at the Site in 1962. 

21.  On the entirety of the evidence, I do not consider that Mr. Chan has discharged his burden of proving that he had occupied the Site and built his hut there as early as in 1962. The Survey Report and the aerial photograph dated 24 February 1963 contradict Mr. Chan's assertion that he had resided at the Site and had constructed the wooden hut there by 1962. However, after considering the independent and contemporaneous documents, I accept on a balance of probabilities that by the end of 1965, some time before the arrival of Mrs. Chan, Chan Junior and his sister in Hong Kong, Mr. Chan would have built the wooden hut at the Site with the intention of providing accommodation for his family.

22.  Although there is no record in the Government survey sheets of the appearance of a gate at the main entrance of the Site until December 1979, by the state of the development of the structures at the Site, which included the structures later used as the store and the other structures used for accommodation by the family members, I am satisfied from the layout of the structures, and from the survey plans and sheets contained in the Survey Report that the entire Site was in the exclusive possession and occupation by Mr. Chan and his family by May 1967. This is more than 20 years before September 2003.

Whether Mr. Chan had been in possession of the Site under licence by or with the consent of the registered owner

23.  It is Mr. Chan's case that throughout the period of his occupation of the Site, he had never sought the consent of the registered owner of the Site, nor had he paid any rent or license fee to the registered owner.

Was there express licence from Mr. Wong?

24.  The deceased Mr. Yu and the Yu clan had substantial land interests in Yuen Long, Lot 994 and the adjacent Lot 995 included. According to the Plaintiffs, a local villager was traditionally appointed to manage the land on behalf of Mr. Yu and his clan, and it was the manager who let out the agricultural land and collected rent from the tenants, reporting to the landowners annually. The Plaintiffs claim that Mr. Wong had been engaged by the late Mr. Yu to let out Lot 994 and to collect rental income on his behalf.  Mr. Wong also acted as manager of other lots of land owned by a Tong comprising members of other families with land interests in Yuen Long.  Because of the number of lots of land involved, and the fact that the annual rental income derived was not substantial, the Plaintiffs explain that Mr. Wong would not give the detailed particulars of the tenants to the late Mr. Yu, and the late Mr. Yu did not ask for such particulars and did not keep a record of the rental income collected and received. It is claimed that the system had operated on trust for over half a century.

25.  Mr. Yu died in 1980 and Mr. Wong in turn died in 1987. The Plaintiffs have not been able to produce any evidence on or record of the rental income collected by Mr. Wong from Mr. Chan, or any other tenant of the land in question. Although Mr. Yu Kit Chiu, the first named Plaintiff, claims that as a child, he had accompanied his father, the late Mr. Yu, to Yuen Long to meet Mr. Wong and to collect the rental income received from Mr. Wong, he was naturally not able to say that Mr. Chan was one of the tenants from whom Mr. Wong had collected rent. The Plaintiffs only plead that after Mr. Wong's death, Mr. Chan had failed to pay licence fees to the Plaintiffs.

26.  The Plaintiffs argue that it can be reasonably inferred that Mr. Chan was their tenant. They rely on the correspondence exchanged between the Plaintiffs' solicitors, Messrs. Foo and Li, and the DLO in 1985 and 1986, and in particular, on a letter dated 23 January 1985 from the solicitors to the DLO ("23/1/85 Letter"). The 23/1/85 Letter reads:

"Re : Lot 994 R.P. in D.D. 115

  Lot 995 R.P. in D.D. 115

We have instructions to act for Mr. Yu Kit Chiu and Dr. Yu Hon Chiu, owners of the above named lots, and refer to a recent telephone conversation between your Mr. Lai and our Mr.Foo.

We are instructed that our clients give their consent to the tenant Mr. Chan Sik Wo (陳錫湖) in his application for a temporary building licence for erection of building or buildings on the said lots."

27.  Leaving aside for the time being the question of Mr. Chan's application for a temporary building licence, the Plaintiffs rely on the reference made in the 23/1/85 Letter to Mr. Chan being a tenant of the owners of Lot 994.

28.  Mr. Foo of Messrs. Foo and Li gave evidence in relation to his firm's correspondence with the DLO. The firm's old files and correspondence have been destroyed or otherwise cannot be located due to lapse of time. The copy of the 23/1/85 Letter produced at trial was from the Plaintiffs' own records. Understandably, Mr. Foo can no longer recall the instructions he obtained and which led to the issue of the 23/1/85 Letter. Nor does he have any recollection of any meeting or conversation with the Plaintiffs or their agents to the effect that the occupier of the Site was Mr. Chan.

29.  The 23/1/85 Letter refers to Mr. Foo's telephone conversation with Mr. Lai of the DLO. Mr. Foo's evidence is that the information that Mr. Chan was his clients' tenant (as stated in the 23/1/85 Letter) could have derived from either his clients (the Plaintiffs), or from Mr. Lai of the DLO. It was suggested to Mr. Foo that as the documents issued by the DLO refer to Mr. Chan as "Chan Sik-wu" (as evidenced by the DLO's correspondence in December 1985, March 1986 and December 1986), the reference made in the 23/1/85 Letter to "Chan Sik Wo" could not have come from the DLO. However, Mr. Foo's evidence on this is that he could not be sure, because any focus placed by Mr. Lai and himself at the material time would have been on the Chinese name of the occupier or tenant on the Site, i.e. 陳錫湖, and not on the English name.

30.  According to Mr. Foo, he had been to the grocery store at the Site, where he had met with the Plaintiffs and Mr. Wong, some time between 1980 and 1984 or 1985.

31.   Counsel for the Plaintiffs argue that Mr. Chan must have been in occupation of the Site under licence from Mr. Wong as manager of the registered owner and had been paying rent to Mr. Wong, as otherwise it was inexplicable that upon learning that Mr. Chan was an occupier of the Site in 1985, the Plaintiffs would have given consent to Mr. Chan's application for the building licence referred to in the 23/1/85 Letter, instead of asserting that Mr. Chan was a trespasser and instituting legal proceedings against Mr. Chan for recovery of possession. Counsel for the Plaintiffs also argue that the reason why the Plaintiffs did not make any attempt to repossess the Site after the visit made by Mr. Foo, the Plaintiffs and Mr. Wong to the Site in 1984 or 1985 can only be due to the fact that Mr. Chan was at the material time occupying the Site under Mr. Wong's licence.

32.  On the other hand, Counsel for Mr. Chan sought to highlight the fact that when the Plaintiffs first made demand for possession of the Site in 2002, they did not assert that Mr. Chan was a licensee, and that it was only when amendments were made to the Statement of Claim filed in these proceedings in August 2007 that the Plaintiffs sought to rely on an alleged licence granted by Mr. Wong to Mr. Chan in respect of Mr. Chan's occupation of the Site, in consideration of payment of an annual licence fee. It was submitted that this casts serious doubt on the Plaintiffs' contention that Mr. Chan had all along been a licensee of Mr. Wong.

33.  From the available evidence, I am not satisfied that the necessary inference can be drawn that Mr. Chan must have been occupying the Site under a licence granted by Mr. Wong acting on behalf of the registered owner of the Site. Mr. Wong may well have been collecting rent from the occupiers of different lots of land in Yuen Long and in the vicinity of the Site. He may even have been collecting rent for other lots belonging to the late Mr. Yu, and accounting to Mr. Yu for the same. However, there is no evidence at all which can clearly show or even suggest that Mr. Wong must have licensed the Site to Mr. Chan in the first place, or that Mr. Wong had been collecting rent from Mr. Chan.

34.  There may also be many reasons to explain the Plaintiffs’ inactivity and failure to take eviction proceedings after discovering that the Site was occupied by Mr. Chan in 1985, or after their visit to the Site in 1984/1985. This is particularly so for land in the New Territories, where it is often difficult to verify land boundaries and ownership. On the Plaintiffs' evidence, they did not appear to have very adequate information from either the late Mr. Yu or from Mr. Wong concerning the state of the occupation of the lots of land registered in the name of the late Mr. Yu, and they simply may not have knowledge then as to whether the Site was lawfully occupied by Mr. Chan at the material times, or was a trespasser. Their lack of knowledge cannot be taken as indication of Mr. Chan's status as a licensee occupying the Site with the express consent of the late Mr. Yu acting through Mr. Wong.

35.  In my judgment, there are also too many uncertainties relating to how Mr. Foo could have come to state in the 23/1/85 Letter that Mr. Chan was the Plaintiffs' tenant, such that I cannot necessarily infer that the only possibility was that Mr. Foo had been informed by the Plaintiffs or by Mr. Wong that Mr. Chan had been occupying the Site as a tenant or licensee. Even if the source of Mr. Foo's information regarding Mr. Chan was Mr. Lam of the DLO, it suffices to say, at this stage, that I do not regard the 23/1/85 Letter as necessarily suggesting that Mr. Lai himself could only have been informed by Mr. Chan that he was occupying the Site as a tenant or licensee of the registered owner.  I shall deal with this in more detail in the paragraphs below.

Was there consent of the registered owner to Mr. Chan’s possession?

36.  The Permit was issued on 8 May 1970. The Waiver was first proposed around January 1985 and finally issued in December 1986. The Plaintiffs rely on these to show that Mr. Chan's possession and use of the Site was with the consent of the registered owner, and henceforth not adverse. Mr. Chan claims that he had never sought the consent of the registered owner of the Site in the course of the Government's issue of the Permit and the Waiver.

37.  Both parties have adduced evidence on the policy and practice of the relevant Government department at the material time in relation to the issue of the Permit and the Waiver, for the purpose of showing the involvement of the registered owner in such process, and whether the consent of the registered owner was required for the issue. Ultimately, there does not appear to be much conflict in the evidence of Mr. Lam called on behalf of Mr. Chan, and that of Mr. Robinson called on behalf of the Plaintiffs.

38.  The Plaintiffs argue that the consent of the late Mr. Yu must have been obtained and given before the DLO issued the Permit to Mr. Chan in 1970.

39.  Whereas the subsequent correspondence on the Waiver which was issued by the DLO in 1985 and 1986 was shown, on the face of the letters, to have been copied to both the Plaintiffs and to Mr. Chan, the Permit was not shown to have been accompanied by any letter from the DLO to the late Mr. Yu as registered owner. Due to the lapse of time, the Plaintiffs were not able to retrieve copies of any correspondence between the late Mr. Yu and the DLO on the Permit. They were able, however, to retrieve a letter sent by DLO to the late Mr. Yu in relation to an identical permit which was issued to another occupier, Mr. Choy, in relation to another part of Lot 994 and Lot 995.

40.  Mr. Lam was the Principal Land Executive of the Lands Department and was posted to the DLO in Yuen Long before his retirement in 2004. He professes knowledge of the policy and practices of the District Office in their routine work concerning the control of the proliferation of unauthorized erections, the issue of Permits or Mordification of Tenancy in respect of domestic structures on private land and the issue of Crown Land Licences on government land in the New Territories in the 1970s and the 1980s. He was called to give evidence on behalf of Mr. Chan in these respects, although it is not disputed that Mr. Lam was not personally involved in the issue of either the Permit or the Waiver in this case.

41.  Mr. Lam claims in his Statement that in the 1970s, erection of squatter huts and structures on government and private land was very common. According to Mr. Lam, the practice of the District Office was to regularize these unauthorized structures by first registering them, and then issuing Permits in respect of those registered domestic structures on private land, and Crown Land Licences in respect of those structures on government land. Mr. Lam claims in his Statement that the practice was to issue the Permit to the genuine occupier of the land as the permit holder, because in most cases, the consent of the registered owner could not be obtained. Mr. Lam explained that often, the owner of the land could not even be located.

42.  According to Mr. Lam, it was only around 1980 to 1982 that the District Office changed its policy and practice, and required the occupier of land to submit the written consent of the registered land-owner when applications concerning the land are made by the land occupier. Mr. Lam's evidence is that since 1982, the DLO further changed its policy and practice when dealing with applications for change of land use, such that an offer letter would be sent directly by the DLO to the registered owner, with copy to the occupier, and the permit or short term waiver in question would be issued in the name of the registered owner, instead of to the occupier.

43.  However, Mr. Lam accepts that even before the 1970s, it was and has still been the policy and practice of the District Office and DLO to adopt the form of the Permit (or Modification of Tenancy), when recording Government's agreement to change or modify the terms of a Crown Lease, and to make the owner of the land a party to such document. Mr. Lam accepts that this was done by either sending a letter and the relevant document to the land owner, through the occupier or otherwise, or by ensuring that the form of Permit in question, when signed, is signed by the occupier on behalf of the land owner. Hence, a standardized chop is imprinted on the Permit under the signature of the Permittee to whom the Permit is issued, with the words "ON BEHALF OF REGISTERED LAND OWNER" appearing beneath the signature.

44.  Mr. Robinson, who gave evidence on the Plaintiffs’ behalf, had worked as Assistant Principal Solicitor for the New Territories in 1982, and gained experience concerning the issue of Permits by the relevant District Office.  Mr. Robinson does not dispute Mr. Lam’s evidence.

45.  There is nothing in Mr. Lam's evidence which can lead me to find that the late Mr. Yu's consent had not been sought or obtained prior to the issue of the Permit to Mr. Chan in 1970. Mr. Lam 's evidence comes to the effect that in most cases, the consent of the land owner would not be obtained for the issue of the Permit because the land owner could not be located.  In this case, however, there is evidence that the late Mr. Yu was contacted by the Land Office in 1970 prior to the issue of the Permit to Mr. Choy in respect of Lot 994 and Lot 995. Mr. Lam obviously cannot, and did not, say that Mr. Yu was not in fact contacted for his consent to the issue of the Permit to Mr. Chan in 1970. In my view, the probabilities remain equal in this case as to whether or not the Land Office had contacted the late Mr. Yu and obtained his consent to the issue of the Permit to Mr. Chan.

46.  However, whether or not the late Mr. Yu's consent was sought and obtained prior to the issue of the Permit to Mr. Chan, it cannot be disputed that the Permit was issued to Mr. Chan, who signed it as Permittee on behalf of the registered land owner identified in the Permit as the late Mr. Yu. Although Mr. Chan maintains that he did not understand the English contents of the Permit when he signed it, he is in law obviously bound by the document to which he had put his signature - irrespective of whether he had bothered to read it, or to have it explained to him. That is trite law. By the express provisions of the Permit, Mr. Chan acknowledged the late Mr. Yu as the owner of Lot 994 and Lot 995, that the late Mr. Yu was permitted to maintain the structures specified in the Permit and, by signing the Permit, he was taken to accept the conditions of the Permit and at the same time acknowledged that he signed and accepted the Permit on behalf of Mr. Yu as the registered land owner.

47.  The intention to possess required 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" (Powell v. MacFarlane (1979) 38 P & CR 452, 471-472; Wong Tak Yue v. Kung Kwok Wai (1997-98) 1 HKCFAR).

48.  I regard the Permit as clear acknowledgment by Mr. Chan to the Land Office, and to the world at large, that the owner of Lot 994 and Lot 995, including the Site, was Mr. Yu.

49.  Counsel for Mr. Chan sought to distinguish an acknowledgment by Mr. Chan of Mr. Yu as the owner, from an acknowledgment by Mr. Chan that he was in possession of the Site with the owner's consent. I do not accept this distinction. Mr. Chan's acknowledgment in the Permit, reasonably construed by either the registered owner himself if he should come across the Permit, or by the Land Office (as the evidence of Mr. Lam also suggests), or by any objective informed observer reading the Permit, can only mean that Mr. Chan, the Permittee, was maintaining the structures, and hence using the Site and in possession of the Site, for and on behalf of the registered owner named. No one could reasonably have come to the conclusion that the named owner on whose behalf Mr. Chan was purporting to act was being excluded.

50.  Mr. Lam 's evidence is that the Land Office was happy and prepared to continue with the practice of issuing the Permit to the occupier even though  the consent of the registered owner was not obtained, precisely because of the use of the chop whereby the occupier signing the Permit acknowledges that he was signing "on behalf of the registered land owner”. The Land Office would rely on such acknowledgment, and it was possibly due to such acknowledgment in the Permit that Mr. Lai was able, later in 1985, to inform Mr. Foo that Mr. Chan was in occupation of the Site with the owner's consent, and was hence a "tenant".

51.   The burden is on Mr. Chan to prove that he had 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, and I am not satisfied that his act of signing and acknowledging the contents of the Permit is consistent with such clear and unequivocal intention.  In the words of Slade J in Powell v. MacFarlane, supra :

" 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 he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner."

52.  Nor can Mr. Chan excuse the signing of the Permit on the ground that it was a condition imposed on him by the Land Office for his continuous maintenance of the structures he had erected on the Site. In this regard, Counsel for Mr. Chan sought to argue that the requisite intention to exclude the owner is only "so far as is reasonably practicable and so far as the processes of the law will allow". In the circumstances of the case, Mr. Chan was required by the process of the law to acknowledge the owner of the Site as Mr. Yu, and he chose so to do. Having so acknowledged, I consider that he should be bound by such acknowledgment, and in my judgment, such an acknowledgment to the whole world is clearly inconsistent with a professed intention to exclude the acknowledged owner.

53.  In Lam Ngok Ching v. Tsang Yuk Ming, HCA 1192/2004, 8 June 2006, the Court came to the same conclusion on the facts, that the defendant in the case had, by acknowledging the grant of the Modification of Tenancy as permittee of the registered owner, acknowledged the owner and was thereby not in adverse possession. Counsel for Mr. Chan sought to argue that evidence of the practice of the DLO/District Office at the material time was not available in the case of Lam Ngok Ching, and that such evidence distinguishes the present case. I do not agree that the evidence from Mr. Lam and Mr. Robinson in this case can affect my finding on the effect of the Permit. Even if I should accept that the late Mr. Yu was never contacted or approached for his consent to the issue of the Permit to Mr. Chan in 1970, I consider that Mr. Chan should be bound by his acknowledgment to the District Office and to the whole world that he was accepting the Permit and continuing his use of the structures on the Site in the name and on behalf of the registered owner.

54.  I accept the submissions made by Counsel for the Plaintiffs that there is no evidence of any significant change of Mr. Chan's position since the date of the Permit on 8 May 1970. He continued to pay the annual fees under the Permit up to at least 2005.

55.  My findings on the Permit are sufficient to deal with the question of whether there is adverse possession, so I will deal with the issue of the Waiver vary briefly.

56.  It is clear that in January 1985, the Plaintiffs through their solicitors wrote to the DLO to give their consent to Mr. Chan's application for a temporary building licence in respect of a part of the Site, and in 1986 to the ultimate issue of the Waiver. Whether or not the issue of the Waiver was initiated by Mr. Chan, and even if I should accept that Mr. Chan never approached the Plaintiffs for their consent nor was a party or privy to the Plaintiffs' correspondence with the DLO in connection with the issue of the Waiver, I accept that Mr. Chan's use and occupation of the Site after 1985 and 1986 was with the consent and permission given by the Plaintiffs as owners of the Site and communicated to the DLO. I accept that a licence can be inferred from the circumstances, notwithstanding that the licensee was unaware of the circumstances (Lord Borough of Lambeth v. Rumbelow, unrep. Ch. D. 25 January 2001, Lexis Nexis Transcripts). It follows that as Mr. Chan occupied the Site as licensee or otherwise with the permission of the Plaintiffs, Mr. Chan cannot be in adverse possession.

Whether Mr. Chan had the intention to possess the Site to the exclusion of the world at large, including the registered owner

57.    As elaborated in the preceding paragraphs, I consider that Mr. Chan's act of signing the Permit was equivocal and not necessarily referable to an intention on his part to dispossess the registered owner. I am not satisfied that Mr. Chan has discharged his burden of proving that he had the requisite intention for the purpose of establishing adverse possession, and that his occupation of the Site was adverse to the owner.

58.  Counsel for Mr. Chan argued that animus possidendi should be presumed, when there is clear evidence that Mr. Chan had enclosed the Site, covered the Site with structures, and used it as a store and a residence for himself and for his family. He relies on the case of Ho Hang-wan v. Ma Ting Cheung as Personal Representative of Ma Sz-tsang, deceased [1990] 1 HKLR 649, to make the proposition that it is only when the squatter's use of the land is equivocal that he has to adduce compelling evidence of the requisite intention.

59.  I do not agree that Ho Hang-wan can be extended beyond the facts and circumstances of its own case to mean that in every instance where the squatter has enclosed the land, he must be presumed to have the necessary animus. That will mean that the presumption of animus can apply to almost all cases of squatters who can establish the act of exclusive possession, without having to prove more.

60.  On the facts and evidence of this case, I consider that Mr. Chan's use of the Site is indeed equivocal, as it is unclear whether he was using the Site as licensee or a designated Permittee of the owner by virtue of the acknowledgment made in the Permit.  In view of the equivocal nature of his use and possession, and the possibility of such use being referable to some actual or supposed right or licence, it will be inappropriate to presume the requisite animus.

The damages payable by Mr. Chan for his occupation of the Site

61.  Since Mr. Chan cannot establish that he has been in adverse possession of the Site, I accept that he was a trespasser after the Plaintiffs revoked his licence on 4 July 2002, and he is liable to pay damages or mesne profits in respect of his occupation thereafter.

62.   On the basis of the valuation made by Mr. Chan's own experts, I allow the Plaintiffs' claim for mesne profits from 4 July 2002 when the Plaintiffs first demanded recovery of possession of the Site up to 24 February 2010, in the total sum of $593,911 as claimed. Mesne profits would also be payable thereafter at $6,900 per month until the date of Mr. Chan's delivery of vacant possession of the Site to the Plaintiffs.

Conclusion

63.  In view of my findings, Mr. Chan has not been able to establish that he has been in adverse possession of the Site.  I will accordingly make an order for Mr. Chan to deliver up vacant possession of the Site to the Plaintiffs within 12 weeks from the date of service of the Order to be drawn up pursuant to this Judgment, and for damages to be paid, as set out in paragraph 62 above.  Mr. Chan's Counterclaim is dismissed.

64.    I will further make a costs order nisi that Mr. Chan is to pay the Plaintiffs' costs of the original action and of the Counterclaim, with certificate for Counsel, to be taxed if not agreed.  Mr. Chan's own costs are to be taxed in accordance with the Legal Aid Regulations.