YAU YIC LOCK v. WU TSANG KWAI YUK AND ANOTHER

HCMP 2272/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2272 OF 2014

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J U D G M E N T

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Introduction

1.  The plaintiff in these proceedings (“P”) claim against the defendants (collectively “Ds”) for possession of a portion of land in Sai Kung of which he is the owner, on the ground that Ds have trespassed onto that portion.

2.  P ordinarily resides in United Kingdom, and has given a general power of attorney to his father Yau On Fai (“Mr Yau”) on 5 January 2015 under section 7 of the Powers of Attorney Ordinance, Cap 31.  Mr Yau explained that the general power of attorney was prepared for him to represent P in these proceedings and for him to deal with many properties held by P.  There was no challenge by Ds to Mr Yau acting as P’s attorney in these proceedings.

Background

3.  In 1980s, the piece of land known as Section G of Lot No 150 in DD No 247, Sai Kung, New Territories, Hong Kong (“Lot 150”) was registered in the names of P’s grandfather and father, namely Mr Yau, as tenants in common.  On about 14 November 2003, P was assigned the entire interest of Lot 150 and has since become the sole registered owner of Lot 150[1].

4.  It was Mr Yau’s evidence that after P became the registered owner of Lot 150, he and P had gone to inspect the land, and that at that time it was bare with no structures or fencing thereon.

5.  Adjacent to Lot 150 is Lot 845 in DD No 247 (“Lot 845”).   Tsang San Fat was the registered owner of Lot 845 prior to his death.

6.  Tsang San Fat died on 5 August 1991 but probate of his estate was not granted until 30 April 1998 to his adopted daughter, the 1^st defendant herein (“D1”), and D1 and her brother Tsang Sze Ming (also adopted by Tsang San Fat) were said to be the only beneficiaries of the estate.

7.  It was the case of the 2^nd defendant (“D2”) in his 3^rd affirmation that in or around 1990, Tsang Sze Ming agreed to sell his “inherited” interest in Lot 845 to D2 at a consideration of HK$700,000 and that there was a handwritten Chinese agreement to this effect (“1^st Agreement”)[2], and that pursuant to the 1^st Agreement, D2 had since early 1991 become a 50% beneficial owner of Lot 845.

8.  Thereafter, according to D2, he had entered into a co-development agreement with D1 in or around 1992 to erect on Lot 845 a 3 storey small house (“Building”) and that shortly before the Building was erected on Lot 845, D1 and D2 had signed a handwritten Chinese agreement that if D2 would solely contribute to the erection of the Building, he would acquire “50% of her partial inherited beneficial interest in Lot 845” and that D1 would be allocated the 2^nd floor and roof of the Building upon completion and that D2 would be allocated the ground and 1^st floor of the Building (“2^nd Agreement”)[3].

9.  It would thus appear to be D2’s case that he had acquired further beneficial interest in Lot 845 under the 2^nd Agreement, and that he ended up with a total of 75% beneficial interest in Lot 845 under the two Agreements.  

10.  D1 had in her affirmations affirmed to the truth and accuracy of what D2 had said about his beneficial interest in Lot 845.  Her case was in any event that she never was the occupier of the ground floor and 1^st floor of the Building, nor did she have access to those floors at the material times.

11.  As mentioned earlier, D1 only obtained grant of probate at end of April 1998 whereupon she became the sole registered owner of Lot 845, being the executrix of the estate of Tsang San Fat.

12.  D1 in fact had never resided in the Building.  According to her, the 2^nd floor and the roof had remained vacant for a number of years and that in or around 2003, she had allowed her son and wife to move there and since then, she would usually visit them around 3 times a month.  D1’s case was that it would be impossible for her to have trespassed onto Lot 150.

13.  According to D2, since completion of the Building in 1992, he had possession of the ground floor and the 1^st floor of the Building[4], and had rented those floors to tenants.  

14.  No certificate of compliance was ever issued in respect of the Building after completion, but according to D2, every year, a premium had been paid to the Lands Department since about 1996 and that the Lands Department had been estopped from exercising its rights under the grant due to lack of a certificate of compliance.  Anyway, it was D2’s case that he had been in possession of Lot 845 for more than 12 consecutive years since or around 1992[5].

15.  It was also D2’s case that he had been in possession of an area fenced off by a “wire fence” (“Occupied Portion”), which was coloured blue (or green as described by D2) on a land boundary plan dated 17 July 2014 (“2014 Land Boundary Plan”)[6] . 

16.  On the other hand, P’s case was that after he became the registered owner of Lot 150, he or Mr Yau on his behalf submitted a formal application to the District Lands Office Sai Kung (“Lands Office”) in about July 2006 for a building licence to erect a three-storey small house on Lot 150, and for the purpose of this application, they instructed a surveyors’ firm to prepare a boundary setting out plan (“2006 Setting Out Plan”)[7]. The 2006 Setting Out Plan indicated thereon a pedestrian footpath running across Lot 150 from its western part (between points D and E) to its northern part (between points A and B) (“Footpath”).  The Footpath is still in existence[8]. 

17.  According to Mr Yau, the Footpath had existed on Lot 150 for many years and had been used by villagers as a shortcut between the main road and land lots lying in the vicinity.  At the time of preparing the 2006 Setting Out Plan, the Surveyors informed Mr Yau that there was a “wire fence” on a portion of Lot 150 along the length of the Footpath.

18.  Eventually, a building licence was issued to P on 9 September 2011 for the building of a small house on Lot 150 (“Building Licence)[9], which was followed by the issue of a certificate of exemption in respect of building works on 16 August 2012 (“2012 Certificate of Exemption”)[10].

19.  It is one of the special conditions in the Building Licence that P is to construct a pedestrian access on the area coloured hatched red on the plan attached to the Building Licence (“Pedestrian Access”), but when Mr Yau on behalf of P engaged a professional engineer to prepare the necessary plans, the area was still being fenced off by a “wire fence” as purportedly forming part of Lot 845.

20.  Mr Yau then sought the assistance of the village head of Tin Liu Village, Mr Tsang Hon Ping (“Mr Tsang”), and it was discovered it was D2 who erected the “wire fence” as the purported demarcation line between Lot 845 and Lot 150.

21.  Through Mr Tsang’s arrangement, in about November 2012, there was a meeting between Mr Yau and D2 (“Meeting”). What happened at the Meeting was disputed by the parties, which I will deal with later in this judgment.

22.  Thereafter, in about mid 2013, Mr Tsang told Mr Yau that the “wire fence” had been dismantled and removed but a brick wall (“Brick Wall”) had been erected surrounding an area which is marked blue (or green as D2 described it) on the 2014 Land Boundary Plan[11] (“Revised Occupied Portion”).

23.  According to Mr Yau, there was another meeting arranged in about November 2013 with D2 through Mr Tsang, but D2 did not turn up.

24.  Thereafter, further certificates of exemption in respect of site formation works and drainage works were issued to P on 24 January 2014 (“2014 Certificates of Exemption”)[12], after which P would be entitled to commence building works of the small house.  These certificates stated that the works should be carried out in accordance with the details as show in the site formation and drainage plan submitted from T & L Construction Limited on behalf of P (“Layout Plan”)[13].

25.  Mr Yau said he on behalf of P had repeatedly requested D2 to demolish the Brick Wall and to deliver vacant possession of that part of Lot 150 enclosed by the Brick Wall to P but to no avail, and that led to P’s issue of the originating summons in present action.

26.  Attached to P’s originating summons is the 2014 Land Boundary Plan, and the area of the part of Lot 150 subject to P’s claim is coloured pink thereon[14].  This portion corresponds with the Revised Occupied Portion referred to by D2.

27.  D2’s case was that he had enjoyed “exclusive possession” of the Occupied Portion since the erection of the Building in or around 1992, and that the “wire fence” was erected to enclose the Occupied Portion when the Building was erected in or around 1992, and that the fence had never been dismantled[15].  It was also his case that at the Meeting, D2 had proposed to deliver up vacant possession of part of the Occupied Portion to P, on the condition that he should be entitled to remain in exclusive possession of the Revised Occupied Portion, and that Mr Yau had agreed to his proposal[16] (“Verbal Agreement”).  However, as P was in breach of the Verbal Agreement, D2 claimed he should be entitled to the entire Occupied Portion.

28.  Thus, D2 sought the following declarations[17]:

(a)  P’s right to recover the Occupied Portion and P’s title thereto have become statute-barred and extinguished under s 17 of the Limitation Ordinance, Cap 347; and

(b)  D2 had acquired the possessory title of the Occupied Portion on ground of adverse possession for the entire residue of the Government Lease up to 30 June 2047;

(c)  Or, alternatively to (a) and (b), for same declarations in respect of the Revised Occupied Portion.

29.  Counsel Mr Anthony Cheung appeared on behalf of P and Counsel Mr Albert Cheung appeared on behalf of the defendants.

The Legal Principles

30.  s 7(2) of the Limitation Ordinance, Cap 347 (“Ordinance”) states that:

“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: Provided that, if the right of action first accrued to the Crown through whom the person bringing the action claims, the action may be brought at any time before the expiration of the period during which the action could have been brought by the Crown, or of 12 years from the date on which the right of action accrued to some person other than the Crown, whichever period first expires.”

31.  Further, s 13  goes on to state that :-

“(1) No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) and where under the foregoing provisions of this Ordinance any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date, the right of action shall not be deemed to accrue unless and until adverse possession is taken of the land.

(2) Where a right of action to recover land has accrued and thereafter, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right of action shall be deemed to accrue unless and until the land is again taken in adverse possession.

(3) For the purposes of this section-

(a) possession of any land subject to a rent charge by a person (other than the person entitled to the rent charge) who does not pay the rent shall be deemed to be adverse possession of the rent charge; and

(b) receipt of rent under a lease by a person wrongfully claiming, in accordance with section 12(3), the land in reversion shall be deemed to be adverse possession of the land”

32.  Then s 17 of the Ordinance states that subject to the provisions of s 10, at the expiration of the period of the period prescribed by the Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.

33.  In other words, except in the case of Government Land, no action to recover land is allowed after 12 years from the date upon which the right of action accrued.  Time does not run simply because the land is unoccupied.  Time only starts to run when the land owner has been dispossessed of his land or where he has discontinued use of his land, and the adverse possessor has taken possession of the land.

34.  Further, Yuen JA in Shine Empire Ltd and Incorporated Owners of San Po Kong Mansion & Others, CACV 19/2005, [2006] 4 HKLRD 1 had referred to what was said by House of Lords in to JA Pye (Oxford) Ltd v Graham & Another [2003] AC 419, as follows:

“The House of Lords in Pye has said that whilst the term ‘adverse possession’ should be avoided as no intention of hostility to the paper title owner is required (paras 36, 69), it is still necessary for the party (“the squatter”) claiming that it has dispossessed the paper title owner to prove two separate elements: (1) a sufficient degree of factual possession in the sense of physical control, and (2) an intention to possess. To establish factual possession, the squatter has to show absence of the paper title owner’s consent, a single and exclusive possession and such acts as demonstrated that in the circumstances, in particular, the nature of the land and the way it was commonly used, it had dealt with it as an occupying owner might normally be expected to do and that no other person had done so (para 41). To establish an intention to possess, the squatter has to show that he intended to occupy and use the land as his own (para 71), to exclude the world at large, including the paper title owner, so far as was reasonably possible (para 43)[18].”

35.  The subsequent appeal by the Incorporated Owners to Court of Final Appeal was dismissed[19].  As reiterated by Nazareth NPJ, the principles for the application of ss 7(2), s 17 and the associated provisions of the Limitation Ordinance were well settled, and that they were formulated and set out by Slade J in Powell v McFarlane [1977] 38 P & CR 452, approved by the House of Lords in JA Pye (Oxford) Ltd v Graham [2003]1 AC 419, and adopted in Wong Tak Yue v Kung Kwok Wai (No 2) FACV 1 of 1997, 13 January 1998, (1997-98) 1 HKCFAR 55[20].

36.  Litton PJ had also said in Wong Tak Yue :

“The law is clear. The owner of the land with the paper title is deemed in possession of the land. If the law is to attribute possession to a person who can establish no paper title to possession, and claims to be a mere trespasser, the burden is upon him to establish his intention to exclude the whole world: including the owner of the land. Only in this way can he establish ‘adverse possession’ in terms of s13(1) of the Limitation Ordinance, Cap 347[21].”

37.  There was no dispute on the above general legal principles and with these principles in mind, I turn to the issues in this action.

The main issues

38.  There was some confusion as to what “wire fence” was referred to by the parties.  Mr Yau and Mr Tsang in their respective 1^st affirmations had referred to a “wire fence” erected on Lot 150 which was then dismantled and replaced by the Brick Wall.  On the other hand, D2 had said that the “wire fence” was still there. 

39.  What can be clearly seen in a photograph[22] (“Photo C100”) produced by Mr Yau in his 3^rd affirmation is a metal railing (鐵欄杆) to the left of the Footpath (“Metal Railing”), which was in existence at all material times and at the time of the trial.  Mr Yau had clarified that the “wire fence” he was referring to in his 1^st affirmation was not the Metal Railing but in fact a wire mesh (鐵絲網) (“Wire Mesh”), which can now no longer be seen in the Photo C100 and which was allegedly dismantled by D2 and replaced by the Brick Wall erected by D2.  The Brick Wall can be clearly seen in Photo C100.  D2 had denied that there was ever the Wire Mesh alleged by P/Mr Yau and Mr Tsang and alleged that Mr Yau had changed his evidence, and anyway D2 said he was referring to the Metal Railing when he referred to the “wire fence” in his affirmations.  I will come back to this issue later.

40.  At the commencement of the trial, P’s Counsel had listed  five disputed  issues, which was agreed by Ds’ Counsel :-

(i)     Whether D2 has any interest and title in Lot 845;

(ii)    Whether the Metal Railing was erected by D2;

(iii)   Even if the Metal Railing erected by D2, whether this would support his case of adverse possession of the Occupied Portion;

(iv)   Whether D2 can prove adverse possession of the Occupied Portion;

(v)    Whether there was the alleged Verbal Agreement, and whether P was estopped in claiming possession and title based on the Verbal Agreement.

41.  During Closing Submissions, Ds’ Counsel clarified that D2 was no longer relying on any oral contact or estoppel, and that his case was essentially based on adverse possession.

42.  Only D2 was claiming adverse possession.  D1’s case was that she had never trespassed or occupied any part of P’s land, and that it was D2 who took possession and had/has continued to be in possession of part of Lot 150.

The Evidence

43.  Although P had made an affirmation in September 2014 in these proceedings, he did not attend trial for cross examination, and therefore this court will give no weight to his affirmation.  Having said this, there was really no dispute in relation to the land registry record and the letter before action which were produced by P, and his case was essentially supported by the evidence of his father Mr Yau, and that of Mr Tsang.

44.  Mr Yau and Mr Tsang had each made 3 affirmations and had attended trial for cross examination.  Madam Tang Tim Fung, P’s mother, had also made an affirmation in February 2015, but in the end she was not called, and I will give no weight to her affirmation.

45.  Ds’ case was supported by D1’s 3 affirmations and D2’s 4 affirmations and they had both attended trial to give evidence.

46.  Both Mr Yau and D2 had been attacked on their credibility.   I have had the chance to observe their demeanour when giving evidence. I am mindful that Mr Yau was said to be suffering from diabetes and also had to take medications for his heart from time to time.  D2 on the other hand is 75 years of age.  Their evidence were both confusing at times and for reasons set out later in this judgment, I find neither of them to be a completely reliable witness.  As for D1, she admitted during the trial that any legal costs payable by her would be paid by D2 and therefore was clearly on D1’s side. Mr Tsang is the village head or chief.  He gave evidence for P, and he was P’s witness when the Building Licence was issued to P.  He thus knows Mr Yau well. Having said this, when giving oral evidence, he appeared to be neutral and readily conceded where his memory failed him.  I find him generally a reliable witness and I will set out his evidence later.

Whether D2 has any interest and title in Lot 845

47.  In the affirmations, Mr Yau had raised queries over D2’s interest and title in Lot 845. 

48.  D2 had produced a copy of the 1^st Agreement, the alleged handwritten sale and purchase agreement under which Tsang Sze Ming had agreed to sell his interest inherited in Lot 845 at a consideration of HK$700,000.  D2 said in his affirmations he had made payment to Tsang Sze Ming through his solicitors in early 1991.  However, during the trial, D2 changed his evidence and said that he made a mistake and the HK$700,000 was paid to Tsang Sze Ming by him directly in cash and not through solicitors, and it was paid in 1992 on several occasions whenever Tsang Sze Ming had needed money.

49.  D2 was vague as to when the 1^st Agreement was made.  He said he could not remember when cross examined as to whether it was made in 1990 as alleged by him in his 3^rd affirmation.  Further, when put to him that this was before the death of Tsang San Fat and that Tsang Sze Ming could not have any “inherited” interest in Lot 845 in 1990, D2 had replied that he did not know, and said that in his opinion the son would eventually inherit his father’s property.  There was no date on the 1^st Agreement.

50.  Although the 1^st Agreement referred to a payment of a deposit of HK$100,000 with the balance payable within 14 days after grant of probate, D2 maintained that he had paid the HK$700,000 in full to Tsang Sze Ming in 1992 prior to the grant. 

51.  D2 had also produced a copy of the 2^nd Agreement between D2 and D1 which stated, among other things, (i) the sale of 50% of D1’s interest in Lot 845 to D2 in consideration of the allocation to D1 by D2 of the 2^nd floor and roof of the Building to be constructed by D2 and the construction cost of HK$700,000 was to be paid by D2 including all land premium, and also (ii)  the sale of 50% interest in other pieces of land by D1 to D2[23].  Again, there was no date on the 2^nd Agreement.  In so far as the sale of the 50% interest in other pieces of land mentioned in the 2^nd Agreement, it was stated that there was a deposit payment with the balance payable within 14 days after grant of probate.

52.  It did not seem to make commercial sense that neither Agreement had a date and further notwithstanding what was stated in the Agreement, D2 would go ahead to pay Tsang Sze Ming and to pay for all construction costs of the Building long before the grant of probate.

53.  Mr Yau had produced the New Grant No 7786 of Lot 845 dated 23 July 1990 which contained the agreement and conditions of exchange between the Lands Office and Tsang San Fat (“New Grant”)[24].   There are also special conditions contained in the New Grant (“Special Conditions”)[25].

54.  It was not disputed that the certificate of compliance for the Building had never been issued.  Different reasons were given by D1, D2 and Mr Tsang.  D2 had said that there was no certificate for the completion of the foundation work for the Building due to a technical problem[26].  D1 had explained that this was due to many problems including that the drainage had not been finished properly, and that D2 was responsible for rectifying the problems which were never rectified.

55.  On the other hand, Mr Tsang explained that after Tsang San Fat died in 1991, there was a dispute over inheritance rights between D1 and Tsang Sze Ming as a result of which probate was not granted to D1 until 1998 and further as the Building was erected offsite, plus the retaining wall at the rear of the Building was not constructed in accordance with Government’s requirements, no certificate of compliance had been issued[27].  Mr Tsang was not really cross examined on this part of his evidence.

56.  Whatever was the reason, D2 seemed to suggest that although the certificate of compliance had not been issued, as he had been making payment for premium to the Government since 1996, the building period as specified in Clause 3(a) of the Special Conditions has been extended and the Government will not enforce its rights for re-entry subject to payment of premium.  He had produced a letter from the Lands office dated 15 May 2012 (“15.05.12 Letter”)[28] in support of what he claimed.   However, all this letter said was the Government would reserve all its rights including its right of re-entry subject to payment of premium.

57.  Anyway, what is clear is that D2 is not an indigenous villager of Tin Liu Village where Lot 845 is situated.

58.  The New Grant was granted to Tsang San Fat upon the Special Conditions.  One of the Special Conditions was that the grantee expressly warranted/represented and declared that he was a person descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong[29].  Thus, the New Grant was granted to Tsang San Fat upon his declaration of being an indigenous village of Tin Liu Village.  

59.  There was also a restriction on alienation in the Special Condition[30], and that alienation would only be possible upon certification by the Lands Office that the Special Conditions had been complied with to his satisfaction and with the prior written consent of the District Lands Officer and on such conditions as imposed by him[31].

60.  Further, it was put to D1 that if any house was to be built on Lot 845, the house had to be declared to be for self-use.  D1 agreed at the time when the application was made to the Government for erecting the Building, there had to be a declaration that the Building was for self use but she denied that she had anything to do with this as all applications were made by the building contractor appointed by D2.

61.  Both D1 and D2 were vague and evasive as to how approval for the construction of the Building had been obtained, or how D2 was said to have acquired the beneficial interest of Lot 845.  The 1^st Agreement and the 2^nd Agreement had not been stamped nor registered in the Land Registry.  Whatever agreement D2 had with Tsang Sze Ming and/or D1 in relation to the construction of the Building or the purported sale of beneficial interest in Lot 845 was clearly in contravention of the Special Conditions, and D1 had in fact admitted when being cross examined that the agreement with D1/D2 or any agreed transactions regarding erecting the Building and sale of interest could not “come to light” or be revealed to the Government.  

62.  In fact, it can be seen from the 15.05.12 Letter that so far as the Government was concerned, the registered owner of Lot 845 was still Tsang San-fat since that letter was addressed to Tsang San-fat, and there was no evidence that the Government was ever aware of the sale or alienation of the beneficial interest of any part of Lot 845 to D2.

63.  It is also clear from the New Grant if there is any failure or non-compliance with the Special Conditions, the Government shall be entitled to re-enter upon and take back possession of Lot 845 or any part thereof[32].  No doubt if the Government has notice of the alienation of beneficial interest to D2, the Government may be entitled to exercise its right of re-entry.

64.  P’s Counsel had referred this court to Best Sheen Development Ltd v The Official Receiver [2001] 1 HKLRD 866,HCMP 7250/1999 and submitted that the underlying transaction between D1 and D2 could be void.   It can be gleaned from Best Sheen that where an agreement is entered into for an illegal purpose, the court will not enforce it.

65.  I accept the transactions between D2 and D1/Tsang Sze Ming may be questionable.  However, in the present case, this court is not asked to enforce the 1^st Agreement or the 2^nd Agreement as between D2 and D1/Tsang Sze Ming.  In particular, whether the Government is entitled to exercise to its right of re-entry or not, D1 had not challenged or disputed D2’s entitlement to the occupation and possession of the ground floor and the 1^st floor of the Building.  I therefore do not find it necessary to deal with the legality issue over D2’s beneficial interest in Lot 845.  In any event, there was no sufficient evidence to contradict D2’s case that he had been and continues to be in possession of Lot 845/ground floor and 1^st floor of the Building[33]. 

Whether the Metal Railing was erected by D2 

66.  First of all, as mentioned earlier, there was confusion as to what “wire fence” on Lot 150 Mr Yau and Mr Tsang were referring to in their respective 1^st affirmations.

67.  Ds’ Counsel had submitted that Mr Yau’s evidence in relation to the Metal Railing was inherently incredible and that there was a change of position on Mr Yau’s part when D2 said in his 4^th affirmation that the “wire fence” still exists.

68.  What Mr Yau had first said in his 1^st affirmation was that when he went with P to inspect Lot 150 after P was assigned all the interest therein in November 2003, Lot 150 was then “a bare piece of land with no structures or fencing thereon”[34].  Mr Yau had admitted during the trial that the Metal Railing was already there during this inspection, but he denied he was lying about what he had said in his affirmation as accused by Ds’ Counsel.  Mr Yau had tried to explain that whether it was a bare piece of land would depend on the angle from which the land was viewed.  Whatever his explanation, he clearly did not mention the Metal Railing.

69.  Mr Yau had said in his 1^st affirmation that it was at the time of preparing the 2006 Setting Out Plan that he was informed by the surveyor that a “wire fence” was found on a portion of Lot 150 along the length of the Footpath.  Although during the trial, Mr Yau said he had told Mr Tsang about the “wire fence” (Wire Mesh) in 2006, this was not Mr Yau’s evidence in his affirmations, nor was this Mr Tsang’s evidence.

70.  Anyway, Mr Tsang said in his 1^st affirmation that it was in about August 2012 that he was told by Mr Yau about the “wire fence”.  Further, according to Mr Tsang, after making enquiries on behalf of Mr Yau with D2, D2 had admitted to him that he was the person who erected the “wire fence” on part of Lot 150, and that D2 had said he thought the land on which the “wire fence” stood was Government land, and that he erected a “wire fence” as a purported demarcation line between Lot 845, the Government land and Lot 150. 

71.  It was further the evidence of Mr Tsang in his 1^st affirmation that after the Meeting, in about mid 2013, he discovered that the “wire fence” had been dismantled and replaced by the Brick Wall.  Mr Tsang then told Mr Yau about this.

72.  Mr Tsang became the head or chief of Tin Liu Village on 1 April 1995.  He said  before he became the village head,  he would go back to Tin Liu Village almost every Sunday for about 30 years, as his parent were living there and Tin Liu Village was his ancestral home.  Further, since becoming village head in 1995, he had also gone back to socialize with the villagers before he moved back to live in the village in 2007.  

73.  Mr Tsang had confirmed during the trial that Mr Yau told him only in August 2012 that part of Lot 150 was fenced off by some one, and that Mr Tsang then went to inspect.  He confirmed that he saw the Metal Railing which he said was erected a long time ago.  Mr Tsang further  admitted  that he could not recall clearly whether D2 had said at the time when enquiries were made of him that he thought the land on which the “wire fence” stood was Government land, or that it was erected as  a purported demarcation line between Lot 845, the Government land and Lot 150.

74.  It was put to Mr Tsang during cross examination that there never was the Wire Mesh along the blue line marked “C” in Photo C100 as said by Mr Yau.   Mr Tsang’s evidence was that there was in any event an enclosing fence (圍欄), although he was not sure whether it was made of iron wire or wooden or plastic, and that it was in front of the Building.  Mr Tsang had pointed to the Brick Wall in the photographs and said it was the same area now fenced off by the Brick Wall, although he was not sure of the height.  However, when Mr Tsang was challenged that his memory might not be correct, he again conceded that this was no surprise and that his memory could be wrong.

75.  D2’s own evidence was also confusing.  In his 1^st affirmation, he had said that he had built a “wire fence” which was 1 meter tall “surrounding” the Occupied Portion to exclude people from entering the Occupied Portion[35].  He further admitted building the Brick Wall only after the Meeting in or around 2012, “surrounding” the Revised Occupied Portion[36].

76.  D2 did not initially deny Mr Yau’s allegation that the “wire fence” was dismantled and it was only in D2’s 4^th affirmation that he suddenly said the “wire fence” still existed, and he then produced 8 photographs to show the “wire fence”, indicating he meant the Metal Railing.

77.  In reply to what D2 had said in his 4^th affirmation, Mr Yau had in his 3^rd affirmation tried to explain that when he was told about the “wire fence” by the surveyor who prepared the 2006 Setting Out Plan, he was under the impression that it was the Government who erected the same to mark out and guard people against falling off the Footpath, and that he did not think much about it[37].  During the trial,  Mr Yau had said that the Footpath was arranged  by his father for people to walk along and he was not sure who erected the Metal Railing, whether it was the Government or not and that it was Mr Tsang who told him that  the Metal Railing was  erected by the Government. This again was not what he had said in his affirmations.

78.  Mr Yau had however pointed out that the Metal Railing was erected many years ago, not just on a portion of Lot 150, nor on Lot 845,  but along the entire length of the Footpath in order to make out the same and to prevent people from falling off.  Mr Yau was adamant that this was not the Wire Mesh which D2 had previously erected and which had been dismantled between November 2012 and mid 2013.

79.  Although Mr Yau had said during the trial that he saw the Wire Mesh on many occasions between 2006 and 2013 before it was dismantled, and that it was 1.3m to 1.5m high and was the type of wire mesh one could buy from metal shop, this was never mentioned by Mr Yau in his affirmations.

80.  Mr Yau did not live in Tin Liu Village, but he said he would go there regularly.  According to Mr Tsang, Mr Yau would visit Tin Liu Village occasionally, mostly at Ching Ming and Chung Yeung as his father, grandmother and mother were all buried there, and that as Mr Yau was in the funeral business, he would help out whenever an old villager passed away.  According to Mr Tsang, Mr Yau would telephone him time to time to enquire whether there had been any changes to Lot 150.

81.  Although I accept Mr Yau did probably visit Tin Liu Village between 2006 to 2012, there was no sufficient evidence that he had complained to Mr Tsang about the Wire Mesh until August 2012.  I find Mr Yau’s evidence in relation to the “wire fence” or the Wire Mesh was confusing and not reliable.  On the other hand, D2’s own evidence was not satisfactory either.  As D2  had described the “wire fence” installed by him as “surrounding” or “enclosing”[38] the Occupied Portion, and thus it did not appear that he was  referring to the Metal Railing, which was clearly not enclosing any particular area.  Further, it was D2’s own case that pursuant to the Verbal Agreement, he had delivered up vacant possession of part of the Occupied Portion and only retained or remained in possession of the Revised Occupied Portion by erecting the Brick Wall round it.  As the Metal Railing, or the “wire fence” was according to him still in existence, I could not understand how he could have delivered up vacant possession of any part of the Occupied Portion. 

82.  For some reasons, D1 was not really asked about the Wire Mesh.  However, when shown the photographs, she had said there had been not much change since before the commencement of the erecting of the Building until the present, save that the Brick Wall was not there, but the Metal Railing and the Footpath had always been there.  She had also said she did not live in the Building, nor did D2, and that she would not know what the tenants had done to the Building.

83.  Having considered all the evidence, and in particular the evidence of Mr Yau and Mr Tsang differed as to the location of the alleged Wire Mesh or fence, I am not satisfied on a balance of probabilities that there had been the Wire Mesh along the blue line marked “C” in Photo C100 as alleged by Mr Yau.

84.  Then, there was also the dispute as to who built the Metal Railing.

85.  D1 confirmed she was residing with her adopted father Tsang San Fat in Tin Liu Village in the 1980s.  She was shown a photograph (“Photo C99”)[39] which showed 2 other houses at the far end of the Footpath, and D1 confirmed that they were built before the Building was constructed.  D1 had also confirmed that the Footpath was used by residents of those 2 other houses and any one who had wanted to go to that part of the village and that the Footpath had been in existence before the Building was constructed.  

86.  When D1 was asked who built the Metal Railing, she was rather vague.  She said she was not sure as she did not see it being built but thought it was D2, and on re-examination she had said as D2 wanted to construct the Building, she “guessed” what was outside the Building should also be built by him.  I do not find her evidence helpful to D2’s case that the Metal Railing was built by him.

87.  D2’s own case was also inconsistent.  He said in his 2^nd affirmation that the Metal Railing was erected around 1992.  This would be prior to the completion of the Building.  During the trial he then said it was erected in the latter half of 1993. If this was the case, then it was erected only about 11 years before the issue of the present action.  Notwithstanding in his affirmations he had maintained that the Metal Railing was built by him to “enclose” the Occupied Portion, it was, however, admitted by him during cross examination that the Metal Railing in fact extended beyond both Lot 150 and Lot 845, and was not enclosing any area, and that any one could use the Footpath within the Occupied Portion.

88.  So far as Mr Tsang’s evidence was concerned, the Metal Railing ran across Lot 150 extending to the Government land beyond.  In his affirmations, Mr Tsang had said that the Metal Railing was erected by the Government many years ago but during the trial, he had said it was erected in the 1990s, between 1992 to 1995 and conceded that he did not see it being erected as he only became the village head in April 1995. 

89.  Anyway, having considered the evidence of all the witnesses, I am not satisfied that D2 had constructed the Metal Railing to “enclose” the Occupied Portion.  In fact, on one side of the Metal Railing is the Footpath and on the other side is a slope, and I find it is more likely than not that the Metal Railing was erected to prevent accidental fall as put forward by P/Mr Yau, rather than it was erected to enclose any area.

Even if the Metal Railing erected by D2, whether this would support his case of adverse possession of the Occupied Portion

90.  In any event, even if the Metal Railing was indeed erected by D2, this could not have supported his case of adverse possession of the Occupied Portion for the following reasons:

(i)     Since the Metal Railing is only on one side of the Footpath, it could not possibly  have “surrounded” the Occupied Portion or “enclosed” the Occupied Portion, nor could it exclude any one from entering the Occupied Portion or using the Footpath;

(ii)    Even on D2’s own evidence, he had agreed that the Footpath was used not only by him but also by all the passers-by and neighbours;

(iii)   D1’s evidence indicated that the Metal Railing had existed before the Building was constructed;

(iv)   As said earlier, in my view, it is more likely than not that the Metal Railing was erected to prevent accidental fall   rather than to exclude any person from  the Occupied Portion as alleged by D2.

Whether D2 can prove adverse possession of the Occupied Portion

91.  There was no dispute that at all material times Lot 150 was owned by P and/or his family members.  Up until 8 January 1980, P’s grandfather and father, Mr Yau, were registered owners of Lot 150 as tenants-in-common each holding one half share.  On 15 August 1980, Mr Yau had by deed of gift transferred his on half share to his father, namely P’s grandfather.  When P’s grandfather died, the legal title of Lot 150 was registered in the name of P’s mother, as executrix of the estate.  Then, on 14 November 2003, P’s mother assigned the entire Lot 150 to P.  P has remained the sole registered owner of Lot 150 up to the present.

92.  As mentioned earlier, D2’s case was that he had been in possession of the Occupied Portion since around 1992 and then P and/or his predecessors in title had been “dispossessed” of the Occupied Portion since about that time.

93.  As seen in the authorities cited earlier, the burden was on D2 to prove adverse possession.

94.  D2’s main case was that he had erected the Metal Railing to exclude people.  As I have found earlier, the Metal Railing was not erected by D2 but even if the Metal Railing had been erected by him, it would not support to his case of adverse possession.

95.  I would also add that there was nothing such as a gate door to prevent people from walking over or using the Footpath and both D2’s and D1’s evidence indicated that passers by had been freely using the Footpath for access to and from other houses in the vicinity.

96.  It was further clear even on the D2’s own evidence,  he had not been in possession or physical control of the entire Occupied Portion, nor had there been any exclusion of the “world at large”, in particular over the Footpath.

97.  D2 had produced 3 utilities bills and one demand for rates and Government rent in support his case[40].  3 of those were sent to D2 at another address No 6, Tai Wo Village in Ho Chung, Sai Kung.  These bills covered divers periods from end of October 2012 to about end of 2014.  The address of the user on the utilities bills, was either ground floor or 1^st floor, 14 Tin Liu Village.  “14, Tin Liu Village” is the address of the Building in Lot 845.  

98.  None of these bills, on the face of it, covered any of the Occupied Portion, Revised Occupied Portion, or indeed any portion of Lot 150.  When asked how these bills could help to support D2’s case, D2 had tried to explain that there was lighting outside the Building and water used to wash the Occupied Portion, namely the area outside the Building.

D2 admitted during the trial he was also the owner of No 6, Tai Wo Village which he said he had built, but then claimed that he only used that address as his correspondence address.   D2 had also admitted that he had rented out the ground floor and 1^st floor of the Building to various tenants, and he had produced two tenancy agreements dated 5 May 2009 and 16 June 2014 respectively[41].

99.  Further, when being asked about people using the Footpath, D2 was not quite sure whether the Footpath led to two other houses at the far end or one house, and he admitted that he had never lived in the Building and that the ground floor and 1^st floor had always been rented out.

100.  In any event, according to D2, the utilities bills were paid by tenants if there were tenants, and it seemed that they would only be paid by him, if untenanted or vacant.  So far as the rates demand was concerned, this clearly only related to ground floor of the Building or Lot 845.  D2 had said no rates were levied on Lot 150.   I do not find that the utilities bills and the rates demand note would help D2 in establishing any adverse possession of the Occupied Portion or Revised Occupied Portion.

101.  D2 had also produced aerial photographs from the Survey & Mapping Office of the Lands Department[42].  The aerial photos were dated respectively 14 May 1994, 23 October 1998, 15 August 2002 and 6 December 2006.  One cannot see or identify the land lots in question on the face of those aerial photographs, nor can one see the Metal Railing. All that the photographs appeared to show was that there was already a building with a red roof on Lot 845 in May 1994.  In fact, upon the query being raised by this court, D1 had filed a 4^th affirmation to state that when the Building was first erected, the roof had red tiles[43].  D1 was not really challenged on this, and there was no sufficient evidence to contradict what D1 said.   

102.  Having considered the aerial photographs and what was said by D1, I find that the Building was on a balance of probabilities erected by the latter half of 1993 but notwithstanding this, having considered all of the above, again I do not find the aerial photographs really assist D2 in his case.

Whether there was the alleged Verbal Agreement

103.  Although D2 was no longer relying on any oral contract or estoppel, Ds’ Counsel submitted that there was a credibility issues in that Mr Yau’s version regarding what happened at the Meeting was not believable.

104.  D2 had claimed that at the Meeting Mr Yau had said to D2 that if he wanted to fence off the Revised Occupied Portion, he could go ahead, namely that there was the Verbal Agreement pursuant to which Mr Yau had agreed to D2 to retain exclusive possess of the Revised Occupied Portion on condition that he delivered up the rest of the Occupied Portion.  

105.  Mr Yau denied that the alleged Verbal Agreement existed.  His evidence was that apart from him and D2, Mr Tsang and also Mr Yau’s wife Madam Tang Tim Fung were also present at the Meeting, and that when he told D2 that the Wire Mesh was on P’s Lot, D2 had explained that he thought the Occupied Portion was Government land and that he did not know it belonged to P.  D2 then asked Mr Yau to give him a few feet of the Occupied Portion so that he could build a wall there, but Mr Yau had told him that he/P could not accede to D2’s request.  D2 then became very angry and the Meeting ended in animosity.

106.  Although there was a dispute as to whether Mr Yau’s wife was present, there was no dispute that Mr Tsang was present.  Mr Tsang was cross examined about the Meeting, and although he did not recall all the details, he confirmed that D2 had proposed to give up part of the Occupied Portion and requested Mr Yau to allow him to retain a small area outside the “rainwater catchment” of about 4 feet from the main black glass door[44].  Mr Tsang said D2 did not mention about erecting the Brick Wall and he had also confirmed that notwithstanding D2’s proposal/request, there was no oral agreement at the end of the Meeting and the Meeting did not end in a friendly way, namely the parties 不歡而散. 

107.  Although Mr Yau did not call his wife to give evidence, it was clearly Mr Tsang’s evidence that there was no Verbal Agreement as alleged by D2.  Mr Tsang had also confirmed the presence of Mr Yau’s wife. D’s Counsel had invited the court to draw an adverse inference against P/Mr Yau not calling Madam Tang Tim Fung in that she might give evidence contradictory to that of Mr Yau.  In fact, Madam Tang was sitting in court throughout when Mr Yau was giving evidence and had interrupted Mr Yau’s evidence on a couple of occasions reminding him to take medications.  Since Mr Yau’s evidence was already supported by Mr Tsang, I do not see any necessity for Madam Tang to be called.  In any event, I do not find that any adverse inference can be drawn from her not being called.

108.  Ds’ Counsel submitted that Mr Yau’s version of the Meeting was inconsistent, in that he did not take any photographs of the Wire Mesh.  Mr Yau had explained that he did not know how to use a SMART mobile phone and it did not occur to him to use a camera to take photographs at the Meeting.  He further admitted that he did not seek help from the Lands Office or the police in relation to the Revised Occupied Portion, or the Wire Mesh nor did he take any steps to recover the Revised Occupied Portion until July 2014 when P’s solicitors sent the letter before action. 

109.  It was Mr Yau’s evidence that he was only told about the erection of the Brick Wall in mid 2013, and that he had asked Mr Tsang to arrange a further meeting with D2 on a day in November 2013, but D2 did not turn up saying he was busy.  Mr Tsang had confirmed this. 

110.  In my view, if indeed D2 and Mr Yau on behalf of P had reached the Verbal Agreement, and they did not part after the Meeting in an unfriendly way, there was no reason as to why D2 did not turn up for a further meeting in November 2013, and even if he was indeed busy, there was no evidence from him that he tried to propose another meeting.

111.  Although the 2014 Certificates of Exemption were only issued in January 2014, P was clearly obliged under the Building Licence and the 2012 Certificate of Exemption to build the Pedestrian Access.  In fact, it is stated in Condition 28(a) of the Building Licence that P has to construct the Pedestrian Access on the area coloured hatched red on the plan annexed to the Building Licence or at such other location or locations as may be approved by the Lands office[45]. Even though the Building Licence or the 2012 Certificate of Exemption did not include the retaining wall, this was classified as site formations works which have to be completed satisfactorily before building works are to be commenced[46] and the Layout Plans were prepared in November 2012.

112.  Mr Tsang had confirmed Mr Yau’s evidence that there was no Verbal Agreement.  I find Mr Tsang’s evidence in this respect reliable and accept his evidence.

113.  In any event, having considered all the above, it did not seem probable that Mr Yau on behalf of P would have made the Verbal Agreement with D2 knowing full well at that time that the Footpath had to be re-routed and replaced by the Pedestrian Access which P was obliged to construct  within the Revised Occupied Portion and further site formation works had to be carried out.    In any event, I am not satisfied on a balance of probabilities that the Verbal Agreement had existed.

Conclusion 

114.  D2 had also claimed that if P were to construct the Pedestrian Access and the retaining wall on the Revised Occupied Portion, this would block the entrance to the ground floor and 1^st floor of the Building and that if there is a fire, it may be dangerous and inconvenient for someone leaving the ground floor and the 1^st floor of the Building, and/or there were other security problems.

115.  It is true according to the Layout Plans, the house P is going to build will be quite close to the Building but the two houses will be separated by the Pedestrian Access.  Further, there is an area over which the balcony of the 1^st floor of the Building projects.  So far as the retaining wall is concerned, I understand that this is going to be by the slope[47].  In any event, I do not see any sufficient evidence of any blockage alleged by D2.  Furthermore, the Lands Office has approved the Layout Plans and would have carried out investigations before issuing the Building Licence, the 2012 Certificate of Exemption and the 2014 Certificates of Exemption.

116.  To conclude, in my view, D2 has not been able to satisfy this court that there has been a sufficient degree of factual possession in the sense of physical control over the Occupied Portion or that there was an intention on D2 to possess the Occupied Portion as his own and to exclude the world at large.  In short, D2 has not been able to discharge the burden on him to establish adverse possession of the Occupied Portion.

117.  As for the Revised Occupied Portion, it was D2’s case that there never was the Wire Mesh, and indeed, this court had earlier accepted this on a balance of probabilities.  Thus, even though D2 had established the intention to exclude the whole world by enclosing the Revised Occupied Portion with the Brick Wall, he had admitted that the Brick Wall was only erected sometime after the Meeting in November 2012, and thus s7(2) of the Ordinance does not apply.

Order

118.  Having considered all the above, I decline to grant the declarations sought by D2.  P is entitled to the order sought by him.  I therefore grant an order for P to recover possession of the area as shown coloured pink on the copy of the plan annexed to the originating summons.  I order D2 to deliver up possession of the relevant area within one month from the date hereof.

119.  As for costs, I see no reason why this should not follow the event.  I therefore make an order that Ds do pay P’s costs of this action, jointly and severally, and to be taxed if not agreed on party and party basis.  This is a costs order nisi, which shall be made final after 21 days.   

[1] C:2-3

[2] See para 5(i), B:93, C:131

[3] See para 5(ii), B:94,C:133

[4] Para 6, B:75

[5] At para 13, B:104

[6] See FMS-1, at C:115

[7] C:16

[8] See photograph at C:100, area marked “A” above the green lines

[9] C:18-36

[10] C:38-43

[11] FMS-2, at C:117

[12] C:47-51

[13] C:53

[14] A:4

[15] See paras 18 & 19, B105

[16] See para 9, B:95

[17] Paras 23-25, B:106-107

[18] At para 28

[19] See The Incorporated Owners of San Po Kong Mansion andShine Empire Ltd  FACV 6/2006, (2007) 10 HKCFAR 588

[20] At para7

[21] At para 48

[22] C:100, Metal Railing marked “B”

[23] C:133

[24] C:68-90

[25] C:78-88

[26] Para 10, B:102-103

[27] See para 5, B:65

[28] C:138

[29] Clause 4 (a)(i) of Special Conditions, C:78

[30] Clause 5, Special Conditions, C:79

[31] Clause 5(d), Special Conditions, C:80

[32] Clause 11 (a) of the general conditions, C:76

[33] Para 13, B:104

[34] See para 6, B:18

[35] Para 7, B:75

[36] Para 11, B:76

[37] See para 14, B:55

[38] Para 7, B:75 and para 19, B:105

[39] At C:99

[40] C:121-124

[41] Para 5(iii) , B:94

[42] Exhibit D1-D4

[43] See para 4, B115

[44] As seen in the photograph on C:99

[45] See C:35 or, pg 13 of  P2(a)

[46] See Schedule of Conditions attached to the 2012 Certificate of Exemption

[47] See C:54