WONG LEI AH v. LEE JIM WING

CACV 281/2017

[2021] HKCA 187

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 281 OF 2017

(ON APPEAL FROM HCA NO. 970 of 2015)

__________________________

__________________________

________________

JUDGMENT

________________

Hon Chu JA giving the Judgment of the Court:

1.  On 24 November 2020, this Court handed down our judgment[1] dismissing the plaintiff’s appeal against the judgment of Deputy High Court Judge Sakhrani (“the Judge”) given on 15 November 2017.

2.  On 15 December 2020, the plaintiff filed a notice of motion to apply for leave to appeal against our judgment to Court of Final Appeal. 

3.  At the trial, both parties were legally represented. In the appeal before us, the plaintiff acted in person while the defendant remained legally represented.  The plaintiff is legally represented in the present application for leave to appeal.  The defendant’s solicitors had on 13 January 2021 obtained an order from this Court to cease to act for the defendant.

4.  The plaintiff had put in a written submission dated 21 December 2020 to support her application.  The defendant has not put in any submission or responded to the plaintiff’s application.

5.  Having considered the notice of motion and the plaintiff’s written submission, we see no reason to depart from the usual practice of determining applications for leave to appeal to the Court of Final Appeal on paper without an oral hearing, as set out in Practice Direction 2.1 at [3].  We have therefore proceeded to determine the plaintiff’s application on the basis of the documents in the case.

6.  The background and facts of this case have been set out in our judgment.  We will not repeat them.

7.  Under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, leave to appeal to the Court of Final Appeal may be granted if the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for decision.

8.  The plaintiff’s application relies on both limbs in section 22(1)(b).

9.  The six questions formulated in the notice of motion as being of great general or public importance are as follows (respectively “Question (1)” to “Question (6)”):

(1)  Whether a squatter’s willingness to pay rent is inconsistent with the intention to possess in establishing adverse possession.

(2)  Whether a squatter’s failure to consider the property as her own property is inconsistent with the intention to possess in establishing adverse possession.

(3)  Whether a squatter’s change of lock is a factor in favour of establishing her intention to possess in adverse possession, or whether this should be dismissed as merely for reason of security.

(4)  Whether a squatter’s payment of management fees, renovation fees, contributions to building improvement fund, window inspection and repairs of the property is a factor in favour of establishing her intention to possess in adverse possession, or whether this should be dismissed as merely payment for her occupation of the property.

(5)  Whether the paper owner’s payment of rates for the property and hence a squatter’s failure to pay rates for the property is inconsistent with the squatter’s intention to possess in establishing adverse possession.

(6)  All in all, whether an intention to possess is to be distinguished from an intention to own or acquire ownership in establishing adverse possession.

10.  The arguments put forward in the written submission of Ms Wong for the plaintiff can be summarized as follows:

(1)  In Wong Tak Yue v Kung Kwok Wai David (1997-98) 1 HKCFAR 55, the Court of Final Appeal held that a squatter’s willingness to pay rent indicated a lack of intention to possess because he was treating himself as enjoying possession under a lawful title from the owners.  This would suggest that the squatter is required to show an intention to own or to acquire ownership. 

(2)  Wong Tak Yue, however, was decided without the benefit of the Privy Council decision in Ocean Estates Ltd v Pinder [1969] 2 AC 19, and is further inconsistent with the House of Lords decision in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419.  The English Courts are of the view that willingness to pay rent is not inconsistent with an intention to possess for the purpose of adverse possession, and a squatter is only required to establish an intention to possess but not an intention to own or acquire ownership.

(3)  The divergence of law in Wong Tak Yue and JA Pye has put the practitioners in Hong Kong in a difficult position as to what is the correct position: see for example Lau Wing Hong & Ors v Wong Wor Hung & Anor [2006] 4 HKLRD 671.  But Wong Tak Yue is binding on Hong Kong courts unless and until the legal position is reviewed by the Court of Final Appeal.  The Law Reform Commission’s report on adverse possession[2] recommends the enactment of a provision in the Limitation Ordinance, Cap. 347 to the effect that willingness to pay rent by a squatter is not inconsistent with the requisite intention to possess in order to establish adverse possession.  However, nothing has been done as of today.

(4)  The plaintiff’s intended appeal is not a challenge of this Court’s judgment, but is against the Judge’s judgment which touched upon the issue of willingness to pay rent and the requirement of an intention to own as opposed to intention to possess in [64], [82], [83], [85], [95], [98], [99] and [104].   

(5)  Although this point of law was not raised at the trial or in the appeal, leave should not be refused because only the Court of Final Appeal can correct the law in Wong Tak Yue.

11.  For the reasons set out below, we are of the view that leave to appeal should be refused.

12.  Firstly, Questions (1) and (2) raise the issues of whether a squatter’s willingness to pay rent is inconsistent with an intention to possess for the purpose of adverse possession and/or whether a squatter is required to also establish an intention to own or acquire ownership.  These issues in fact also underline the other four questions.  As Ms Wong acknowledged, they are completely new points that were neither raised at the trial nor argued in the appeal before us.

13.  The practice of this court is not to grant leave for new points (not restricted to new points involving fact-sensitive issues) that had not been canvassed in the substantive appeal before us: see Ageas Insurance Co (Asia) Ltd v Lam Hau Wah Inneo, CACV 65/2014, 19 May 2015, at [7] to [9] and the cases cited; and The Law Society of Hong Kong v A Solicitor, CACV 78/2014, 10 July 2015, at [4] to [7].

14.  The rationale underlying the practice is explained in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at [38] and [39]:

“38.  … Therefore where a party has omitted to take a point at the trial and then seeks to raise that point on appeal, the position is as follows. He will be barred from doing so unless there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at the trial.

39.   Clearly the foundational imperative of the “state of the evidence” bar, as I propose to call it, is fairness. Even where a new point is not barred on that basis, there is still a hurdle facing a party who seeks to raise in the final appellate court a point which was not pursued in the intermediate appellate court. As Chief Justice Li said in Wong Tak Yue v Kung Kwok Wai & Another (No 2) (1997–98) 1 HKCFAR 55 at p.66E–G:

“The Court of Final Appeal as a court of final appeal should be very reluctant to consider an issue which was not duly raised and considered in the Court of Appeal. The circumstances must be very exceptional. The statement made by the Privy Council in Ahamath v Sariffa Umma [1931] AC 799, p.803 which it applied in A-G v Cheng Yick Chi [1983] 1 HKC 14 on an appeal from Hong Kong, is apposite:

‘It must only be under very exceptional circumstances that an issue dropped in the intermediate Court of Appeal and for that reason not dealt with or referred to by that Court can be revived before this Board.’”

This is especially so when entertaining the new point and accepting it would constitute a major development of the law. In such an exercise, it is to be expected that having the intermediate appellate court’s view on the point of law involved would be of assistance to the final appellate court. Therefore where the question of a major development of the law is involved, the foundational consideration underlying the “not considered on intermediate appeal” hurdle, as I propose to call it, is that when the courts develop the law, it is best that they do so with all their intellectual resources fully deployed.”

15.  Accordingly, even assuming (without deciding) Wong Tak Yue is at variance with JA Pye, it will have to be a decision for the Appeal Committee whether the new points should be entertained by the Court of Final Appeal.

16.  Secondly, although the questions are framed as general questions, they are in fact challenges to the Judge’s assessment of the credibility of the plaintiff’s evidence and his findings of fact.  As discussed in [33] to [37] of our judgment, the Judge disbelieved and rejected the plaintiff’s evidence that she changed the locks immediately after her solicitors returned the one-year rent set aside for the defendant.  The Judge found: (i) it would not be surprising that over the years the plaintiff would have changed the locks but this would be an unequivocal act done for her and her family’s security at the Property; (ii) the plaintiff paid the management fees because she was obliged to do so under the Tenancy Agreement and she continued to do so after the Tenancy Agreement ended, which was also for her occupation of the Property; and (iii) the plaintiff’s payments of renovation expenses were referable to her occupation of the Property, noting that the first payment was made after she had occupied the Property for over 30 years. In short, the Judge found on the evidence and the facts of the case that the plaintiff’s acts in changing the door lock, paying the management fees and incurring expenses to renovate the Property did not assist her in establishing the intention to possess.   

17.  The Judge further held that the plaintiff’s payments of building renovation fees, contributions to the building improvement fund and window inspection and repairs were to be taken into account when considering whether the requisite intention to possess has been established in all the circumstances.  In that context, the Judge noted that the earliest payment made by the plaintiff was after she had occupied the Property for 19 years, and that throughout the years the rates were paid by the defendant and some of the building maintenance fees and contributions to urgent repairs as well as management fees were also paid by the defendant.  The Judge concluded that in all the circumstances of the case the plaintiff failed to establish the requisite intention to possess.

18.  Hence, it is no part of the Judge’s judgment that, as a matter of principle, the plaintiff’s willingness to pay rent, her failure to consider the Property as her own property or her failure to pay rates is inconsistent with her intention to possess for the purpose of adverse possession.  Nor is it the Judge’s holding that change of lock or payment of management fees, renovation fees, contribution to building improvement fund, window inspection and repairs of the property is not relevant to the issue of intention to possess.  It is clear from his judgment that the Judge accepted these are matters to be taken into account, but all the circumstances of the case had to be looked at in determining whether the requisite intention was established.  The Judge’s conclusion that the plaintiff failed to establish the requisite intention to possess was premised on his assessment of the facts and circumstances of this case.  In short, the intended appeal does not involve any general question of law.   

19.  Thirdly, on the plaintiff’s reliance on the “or otherwise” limb, the practice of this court is to leave it to the Appeal Committee to decide whether exceptional circumstances are made out for leave to be granted under this limb: Richly Bright International Ltd v De Monsa Investments Ltd, CACV 247/2012, 9 May 2014, at [21].  

20.  For the reasons set out above, we refuse the application and dismiss the plaintiff’s notice of motion.  As the defendant has not taken any step in the application, we make no order as to the costs of the application.