LI WONG FAT v. CHAN KAM HEI by TO PO YU, her Guardian ad litem AND ANOTHER

DCMP 1350/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1350 OF 2012

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JUDGMENT

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INTRODUCTION

1. This is the plaintiff’s claim for possession of land against the defendants.

2. The plaintiff is the registered owner of a piece of land known as Lot No 582 in Demarcation District No 98, Yuen Long, New Territories (“the Land”).

3. The central issue in this case is whether the plaintiff has been dispossessed of the Land by the 1^st defendant in about October 1994 and whether the 1^st defendant was and still is in continuous and exclusive possession of the Land. 

BACKGROUND

Procedural history

4. This action started by way of an originating summons dated 9 June 2012 when the plaintiff applied for an order for possession under Order 113, rule 2 of the Rules of the District Court.  It was originally a claim against every person in occupation of the Land.

5. On 9 August 2012, Registrar Lui allowed Madam Chan Kam Hei (陳金喜) to join as the 1^st defendant in this case (“the 1^st defendant”) and the original defendant, ie “every person in occupation of the land”, was ordered to be amended as the 2^nd defendant.

6. On 16 October 2012, Registrar Lui further ordered that these proceedings be continued as if the same had been begun by Writ, with directions as to filing of pleadings, list of documents and witness statements by the parties.

7. Since nobody appeared as “person in occupation of the land” in the proceedings other than the 1^st defendant, judgment was applied for and entered against the 2^nd defendant at the beginning of the trial.

Factual Background

8. The plaintiff Li Wong Fat’s late father, Li Yau Leung (李有亮) (“Li Senior”) acquired the Land on 11 September 1941.  He became the registered owner of the Land since that date.

9. Li Senior passed away on 28 January 1974.

10. His estate, including the Land, was succeeded by the plaintiff pursuant to the provision of section 17 of the New Territories Ordinance, Cap 97 (“NTO”) and section 12 of the New Territories Land (Exemption) Ordinance, Cap 452 (“NTL(E)O”).

11. The plaintiff’s application for succession of Li Senior’s estate, effective from the date of his death, was approved by the District Lands Officer of Yuen Long on 23 January 2009.

12. The plaintiff’s title to the Land was duly registered on 12 February 2009.

13. There is no dispute in this case that:-

(1) Li Senior or his representative duly paid the Government Rent (or Crown Rent before the handover) for the Land on various dates from 1958 until 1997; and

(2) Pursuant to section 4 of the Government Rent (Assessment and Collection) Ordinance, Cap 515, the plaintiff applied for and was granted an exemption from liability to pay government rent for the Land calculated at 3% of the rateable value on 26 May 2010.  He was allowed to continue to pay the old rent of HK$0.15 per annum from 28 June 1997 onwards.

14. The 1^st defendant’s case is that the plaintiff was dispossessed of the Land by her in or about October 1994.  She claims that she was and is in continuous and exclusive possession of the Land since then.

15. The plaintiff denies that his title to the Land has been extinguished by the 1^st defendant’s alleged adverse possession.

The plaintiff’s case

16. According to the plaintiff, in around the early 1960s, an oral agreement was made between Li Senior and one Mr Yip Hing Lok (葉興樂) (“Yip”), who was the father of a classmate of the plaintiff’s son, that the Land would be leased by Li Senior to Yip at the rental of HK$150 per annum.

17. In or around 1983, Yip paid a sum of HK$3,000, which represented rental payment for 20 years, to Madam Lee Yeung Chau Yung (“Madam Yeung”), who is the plaintiff’s wife and the daughter-in-law of Li Senior.  The rental payment was allegedly received by Madam Yeung for and on behalf of the estate of Li Senior.  As such, according to the plaintiff, Yip, his sub-tenants or licensees were allowed to occupy the Land until 2002 under the lease.

18. By a written agreement dated 27 June 1992 between Yip and one Madam Lee Siu (李笑) (“Madam Lee”), Yip sold the temporary structures which were built on the Land to Madam Lee (“the 1992 Agreement”).  It has been expressly stated in the 1992 Agreement that all rental payments from that date onwards to the landowner would be shouldered by Madam Lee.

19. A Mr Wong Siu Wing (黃少榮) (“Wong”), alias Wong Wing (黃榮), who was a neighbour of Yip in the village, witnessed the signing of the 1992 Agreement.

20. At the time of signing the 1992 Agreement, Yip allegedly had told Madam Lee, in the presence of Wong, that:-

(1) Since the owner of the Land resided in the United Kingdom, Yip had already paid the owner 20 years of rental in advance in a total sum of HK$3,000 in 1983;

(2) Madam Lee shall be responsible for the rental of the Land thereafter; and

(3) Should the owner of the Land decide to repossess the Land, Madam Lee shall return the Land to the owner.

21. On or about 5 October 1994, Madam Lee agreed to sell the temporary structures to one Mr Tou Kou Hoi (杜高開) (“To Senior”) and Mr Chan Kau (陳玖) (“Chan”).  To Senior was the 1^st defendant’s late husband while Chan was the 1^st defendant’s younger brother.  The 1994 agreement was evidenced in a receipt signed by Madam Lee and witnessed by Wong (“the 1994 Receipt”).

22. According to the plaintiff, at the time of signing the 1994 Receipt, Madam Lee had expressly told To Senior and Chan, in the presence of Wong, that:-

(1) The Land was subjected to a lease;

(2) The landowner resided in the United Kingdom;

(3) The rental of the Land had been paid until 2002; and

(4) When the landlord returns one day, they have to continue to pay rent for the Land.

23. In or around late February 2006, the plaintiff visited the Land with his son Lee Wan Cheung (李運祥) (“WC Lee”) and a family friend by the name of Chan Kai Sang (陳繼生) (“KS Chan”).  While at the Land, they met To Senior and the 1^st defendant.  To Senior allegedly had told them that he had moved into the temporary structures on the Land not long before that.

24. Thereafter, in about April 2006, WC Lee and his wife visited the Land again where they met To Senior when the later had allegedly told them the following:-

(1) He and his family had moved into the temporary structures not long ago;

(2) He was told by the previous owner of the temporary structures that he has to pay rent for the Land when the landowner returns to Hong Kong from the UK;

(3) He agreed to continue to pay rent for the Land; and

(4) He would ask his son to negotiate the terms of the lease with WC Lee.

25. In around May 2006, WC Lee and his wife visited the Land again.  During this visit, To Senior had allegedly reiterated that he would continue to pay rent for the Land and he asked WC Lee to liaise with his son on the matter because he was illiterate.

26. In or about late 2006, WC Lee paid yet another visit to the Land where he met with To Senior’s two sons and one Mr To Kai Wing (杜啟榮) also known as Ron To (“Ron To”), the grandson of To Senior.  WC Lee was asked to discuss the terms of the lease with one of To Senior’s sons, later known as Mr To Po Yu (杜寶余) (“Father To”) who is the father of Ron To.  WC Lee was later asked to negotiate the terms directly with Ron To.

27. Ron To allegedly asked WC Lee to prepare a draft lease for his consideration. He allegedly gave the mobile numbers of both himself and his wife to WC Lee for contact purposes.

28. The plaintiff claims there is no question that Ron To was acting for and on behalf of To Senior when he liaised and negotiated with WC Lee in regard to the terms of the lease.

29. The plaintiff claims that any dispute in respect of the authority of Ron To only arose for the first time in the present proceedings.

30. In about early 2007, WC Lee produced a draft lease to Ron To, in the presence of the latter’s wife, one Madam To Ka Yan (杜嘉欣), outside the temporary structures of the Land.  Thereafter, WC Lee and Ron To exchanged the following rounds of e-mail to further discuss the terms of the lease:-

(1)   On 17 March 2007, Ron To sent an e-mail under the subject heading of “租地條款＂（“Terms of Land Leasing”）to WC Lee attaching a revised draft lease for the Land with a term of 10 years;

(2)   On 2 April 2007, WC Lee replied to Ron To by e-mail that his revisions were acceptable save that the proposed term of 10 years was considered to be too long.  WC Lee counter proposed the term to be reduced to 2 or 3 years; and

(3)   Having received no response from Ron To, WC Lee wrote to him again on 13 April 2007 in which he reiterated that the term of the lease should be reduced to 2 or 3 years.

31. Having received no response from Ron To, WC Lee went to visit To Senior again at the Land in mid 2007 where one Mr To Po Tung (杜寶東) (“PT To”), another son of To Senior, had allegedly told him that To Senior would not occupy the Land without their permission.

32. WC Lee paid yet another visit to the To family at the Land in late 2007 or early 2008 where he allegedly had met Father To.  Father To allegedly demanded a sum of HK$130,000 as compensation to be paid to the To family should the plaintiff decide to terminate the lease.  The sum was meant to be compensation for the temporary structures and trees planted by the family on the Land.  WC Lee made it clear to the To family that they would not pay any of such compensation. Thereafter, WC Lee has not been in touch with the Tos.

33. On 18 July 2009, the plaintiff instructed his then solicitors to issue a letter demanding all the occupiers of the Land to deliver vacant possession within 14 days.  WC Lee also forwarded a copy of the demand letter by e-mail to Ron To on 20 July 2009.

34. Despite of the demand letter, the 1^st defendant refused to deliver vacant possession of the Land to the plaintiff.

35. On or around 23 June 2010, in a last attempt to resolve the matter amicably, WC Lee called Ron To on his mobile phone and asked to arrange a meeting between the two families.  However, Ron To refused to engage in any further negotiations with the Lis.  A follow-up e-mail was sent to Ron To recording the conversation.  No reply was ever received by WC Lee.

36. Having failed to resolve this matter amicably with the Tos, the plaintiff instructed his present solicitors to issue the originating summons on 9 June 2012.

The 1^st defendant’s case

37. The 1^st defendant’s defence is said to be a straightforward case of adverse possession.

38. After entering the agreement with Madam Lee in October 1994, the 1^st defendant and To Senior, as well as her younger brother Chan, entered into possession of the Land and resided there since that date.

39. Since October 1994, the 1^st defendant, together with her family members, alleged to have carried out the following improvements to the Land:-

(1)   Enclosing the Land by erecting barbed wires surrounding the area so that the Land could only become accessible by means of two keys which are kept by the 1^st defendant’s family;

(2)   Improving the use of the Land by repairing and furnishing the temporary structures;

(3)   Resurfacing the ground and paving a concrete floor as well as cultivating the Land;

(4)   Connecting electricity to the Land; and

(5)   Applied for the installation and connection of water meter in around early 2001.

40. The 1^st defendant’s case is that such acts are sufficient to demonstrate a continuous and exclusive possession of the Land.

41. Based on the above factual scenarios, the 1^st defendant asked the court to draw an inference of animus possidendi.

42. The 1^st defendant denies that To Senior had expressed any willingness to pay rent to the plaintiff as alleged or at all.  The 1^st defendant further denies that both Father To and Ron To had any authority to express any alleged willingness on her behalf.

43. It is the 1^st defendant’s case that in October 2006, the plaintiff’s title to the Land has been extinguished by way of the 1^st defendant’s adverse possession.  Therefore, the 1^st defendant claims that the plaintiff is not entitled to the possession of the Land.  Instead, the 1^st defendant is entitled to the possessory title.

DISCUSSION

Issues in Dispute

44. Despite the 17 different issues / sub-issues identified by the parties under the Revised Agreed Statement of Issues in Dispute, I agree with the plaintiff’s counsel that there are effectively only 2 main issues for this court to decide.  They are:-

(1)   Whether the Land was subjected to a tenancy granted to Yip until at least around 2002 (“the Dispossession of Tenant Issue”); and

(2)   Whether the 1^st defendant has demonstrated the necessary animus possidendi ie the requisite intention to possess the Land (“the Requisite Intention Issue”).

45. I further agree with the plaintiff’s counsel that, in relation to the Dispossession of Tenant Issue, the plaintiff would succeed if the court finds that the Land was indeed subjected to a tenancy granted by the plaintiff or his predecessor to Yip until at least about 2002 as the 1^st defendant’s adverse possession, if any, would only be adversed against Yip, not the plaintiff or his predecessor.

46. In relation to the Requisite Intention Issue, I also agree with the plaintiff’s counsel that, the plaintiff would succeed, if having regard to all the circumstances of the case, the court finds, inter alia, that the 1^st defendant was willing to pay rent if the owner of Land had requested payment for it.

47. It follows that, if the court rules in favor of the plaintiff on any of the above two main issues, the plaintiff’s claim for possession would succeed and the 1^st defendant’s counterclaim for adverse possession would fail.

Relevant Legal Principles Involved

48. The applicable legal principles in this case are not in dispute.  They have been helpfully summarized by the plaintiff’s counsel, Mr Jeffery Chau, in his opening submission.  I can do no better than to produce part of his summary on the relevant legal principles involved in this case here.

(1)   Limitation Ordinance and Adverse Possession

49. The starting position to examine whether a piece of land has been adversely possessed in Hong Kong is by looking at the provisions under the Limitation Ordinance, Cap 347 (“the Ordinance”).

50. Section 17 of the Ordinance provides that:-

“Extinction of title after expiration of period

17.  Subject to the provision of section 10, at the expiration of the period prescribed by this 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.”

51. Section 7(2) of the Ordinance provides for a limitation period of 12 years in an action to recover land.  The transitional provision, section 38A, providing for a limitation period of 20 years in respect of a cause of action which accrued before 1 July 1991, does not apply in the present case.

52. Section 13 of the Ordinance states 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 (thereafter 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.”

53. The leading cases in this area of law are Powell v McFarlane (1979) 38 P & CR 452 and Buckinghamshire Country Council v Moran [1990] 1 Ch 623.  The principles enshrined in those 2 cases have been affirmed and applied by the Hong Kong Court of Final Appeal in the leading case of Wong Tak Yue v Kung Kwok Wai David (No 2) (1997-1998) 1 HKCFAR 55.

54. In Wong Tak Yue, the Court of Final Appeal held that:-

“The principles for the application of these provisions are well established. A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess…” (per Li CJ at p 68E)

55. As pointed out by the CFA in Wong Tak Yue, supra, the rationale behind having a limitation statue is that it is in the interest of society to have finality to litigations:-

“Limitation Statutes are a common feature of many legal systems. A limitation statute has been aptly called ‘a statute of repose’ and ‘an act of peace’… As Lord Simon of Glaisdale pointed out, it is in the interest of society that there should be some end to litigation and this fundamental principle finds expression in many forms, with limitation statutes being one of them.” (per Li CJ at p 67D-E)

56. Thus, when a person claims himself to be in adverse possession in order to defeat the title of the paper owner he does so by invoking the provisions of the Ordinance.  Generally, the Ordinance provides that unless claims are enforced within specified time limits then such claims will be statute-barred.

(2)  Exclusive factual possession

57. Time will begin to run against the paper owner who is entitled in possession when he has been dispossessed or ousted or he has discontinued his possession and adverse possession of the land has been taken by some other person.

58. Slade J in Powell v McFarlane [1979] 38 P & CR 452 at 468 stated that:-

“…dispossession refers to a person coming in and putting another out of possession, while discontinuance refers to the case where the person in possession abandons possession and another then takes it. The authorities however show that merely very slight acts by an owner in a relation to the land are sufficient to negative discontinuance.”

[Emphasis added].

59. In other words, “dispossessed” of “ouster” means driven out of possession by another.  “Discontinued”, on the other hand, means that the owner has abandoned possession, despite that mere non-user may not be abandonment, though non-user over a sustained period of time may lead a court to infer abandonment.

60. Slade J went on to explain the difference between the word “possession” and “dispossession” in this context:-

“In Powell v McFarlane (above), the court held that:-

Neither the word “possession” nor the word “dispossession” is defined in the 1939 Act… I would for my own part have regarded the word “possession” in the 1939 Act as bearing the traditional sense of that degree of occupation or physical control, coupled with the requisite intention commonly referred to as animus possidendi, that would entitle a person to maintain an action of trespass in relation to the relevant land; likewise I would have regarded the word “dispossession” in the Act as denoting simply the taking of possession in such sense from another without the other’s licence or consent; likewise I would have regarded a person who has “dispossessed” another in the sense just stated as being in “adverse possession” for the purpose of the Act.” (per Lord Slade J at p 469)

(3)  Animus Possidendi

61. For animus possidendi, it is the intention to posses, objectively manifested and made clear to the world (See Wong Tak Yue, supra; JA Pye (Oxford) Ltd v Graham [2002] 3 WLR 221; Buckinghamshire County Council v Moran, supra).

62. Slade J in Powell v McFarlane, said on p 472 that:-

“An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment, is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession… If [a squatter’s] acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.”

63. The above principles were applied in a number of local cases.  The Court of Final Appeal in Wong Tak Yue, supra, held that:-

“As Nourse LJ pointed out in Buckinghamshire County Council v Moran [1990] Ch 623 at p 644, adverse possession can be described as ‘possession as of wrong’ and with limitation it is the intention of the squatter that is essential.

…As Slade J observed in Powell v McFarlane (1979) 38 P & CR 452 at pp 471-472, the intention to possess requisite for adverse possession:

…involves the intention, in one’s own name and on one’ own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the process of the law will allow.

The question of intention posses, as with any other question of intention, is one of fact. Whether it can be established depends on an assessment of all the circumstances in a particular case.” (at 68H-69A)

64. In Wong Tak Yue, supra, Li CJ held (at 69C-F) that a squatter’s intention to pay rent is plainly and completely inconsistent with the intention to possess which is requisite for establishing adverse possession, and thus constitutes conclusive evidence that the requisite animus possidendi does not exist:-

“…his affirmation and that of his daughter established as a matter of fact that since the expiry of the seven-year tenancy in April 1964, his intention had been that he was willing to pay rent to the owners if they had requested payment and that he was ready and able to do so. The statements on affirmation were against interest and the Court would give them considerable weight. In my judgment, such an intention is plainly and completely inconsistent with the intention to posses which is requisite for establishing adverse possession and the fourteenth defendant has therefore failed to show an arguable case on this essential ingredient. That being so, he has no arguable case on limitation.

The fourteenth defendant’s intention to pay rent if the owners had requested payment demonstrated that he was not intending to exclude the owner with the paper title but showed that he was treating himself as enjoying possession under a lawful title from the owners.  His intention to possess was not “as of wrong” but was “as of right”.  Such intention is similar to the occupier’s offer to pay rent in R v Secretary of State for the Environment, ex p Davies (1990) 61 P & CR 487, which was held to be inconsistent with the intention to claim possession for the purposes of adverse possession.”  [Emphasis added]

65. Litton PJ concurred and observed in the same Judgment (at 70F-G) as follows:-

“He unequivocally declared that at all times he was ready willing and able to pay rent to the owners, and did not do so only because no one came along on behalf of the landlords to collect rent. Whether his acts and declarations in the course of the 1980 court proceedings amounted to an acknowledgment of the owners’ title in terms of s 23(1), or fell short of that, the fact remains that he had no intention to exclude the owners.”

(4)  Burden and Standard of Proof

66. The onus of proof is on the squatter which is repeatedly observed to be a heavy one, albeit still on a civil standard.  The squatter has to adduce “objective and compelling evidence” that he had the physical possession and the requisite intention to possess (See Powell v McFarlane, supra, at p 476).  The benefit of any doubt should be given to the owner.

67. It has been said that 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 court should approach them with skepticism.  The intention must, in practice, be determined objectively, because “self-serving evidence is hardly ever likely to be of assistance” (See Bolton Metropolitan BC v Musa (1999) 77 P & CR D36 at D37).

68. The court would scrutinize the circumstances in which they were made and would give them such weight, if any, as they may deserve.  On the contrary, where the occupier has made statements as to what was his intention and such statements are against his interest, the court would usually accord to them considerable weight.  (See Wong Tak Yue, supra, at 69B-C).

69. Accordingly, the burden is on the 1^st defendant in the present case, who pleads and asserts the claim of adverse possession, to prove each and every element thereof, including:-

(1) the history of possession;

(2) the possession was continuous and exclusive to all, including the owners, for the whole limitation period; and

(3) that the plaintiff had the necessary animus possidendi throughout the period.

(5)  Adverse Possession where Land is subject to a Lease

70. Where a piece of Land was subject to a lease granted by a landowner ie the landlord to a tenant who was in possession before the current occupant and rent was duly paid by the previous tenant, it is necessary to consider whether the landlords’ claim of adverse possession was effective against the previous tenant (in this case Yip who was the sitting tenant of the Land until 2002 under the 1983 rent collected by Madam Yeung on behalf of Li Senior) or the landlord.  In other words, the crucial question is: who did the current occupier dispossess – the tenant or the landlord?

71. In Chung Ping Kwan and Others v Lam Island Development Co Ltd [1997] AC 38 (PC, appeal from HKCA) at 46-47, the Privy Council stated the following:-

“Time begins to run against a lessee when he is dispossessed by a trespasser. … If continued for the prescribed period of 20 years, this adverse possession would have barred the right of Mak Yung to recover possession. It would similarly have barred those claiming under him.

However, dispossession of a lessee by a squatter does not set time running against the lessee’s landlord. The landlord’s right to recover possession from the squatter on the determination of the lease is not barred by a squatter’s adverse possession against the lessee, however long this continues. In the ordinary course the landlord’s right of action accrues when, but only when, the lease ends and the landlord’s reversionary interest falls into possession: section 9(1). Only then does time start running against the landlord.

The rationale of this provision is that so long as the legal estate created by the lease remains in existence, the landlord has no right to obtain possession of the land from a squatter. The squatter dispossessed the lessee, not his landlord. … These established principles are conveniently displayed in Megarry & Wade, The Law of Real Property, 5^th ed (1984), pp 103-109, 1037.

On the determination of the lease, therefore, the landlord is entitled to oust the squatter however long he may have been on the land. … So if the landlord grants a new lease, the lessee of the new lease may eject the squatter.

In principle the position cannot be different if the lessee under the new lease is the same person as the lessee under the original lease.  There seems to be no sensible reason why the landlord’s ability to confer on a new lessee a title as good as his own should be subject to an exception when the new lessee is the original lessee.” 

[Emphasis added]

72. Similarly, in the House of Lords decision of Fairweather v St Marylebone Property Co Ltd [1963] AC 510, Lord Radcliffe held (at 535) that “where the possession had been against a tenant, its only operation was to bar his right to claim against the man in possession”.  Lord Denning, in agreement with Lord Radcliffe, explained (at 545) that although the title of the leaseholder may be extinguished as against the squatter, the leaseholder’s title remained as against the landlord of the premises.  See also Chan Tin Shi v Li Tin Sung and Others, CACV 71 of 2003 (19 November 2004) at §§12-14 (decision in this regard was not disturbed by the Court of Final Appeal in (2006) 9 HKCFAR 29).

73. The principles set out in Fairweather area summarised in Megarry & Wade, the Law of Real Property 8^th ed (2012) para 35-059 at p 1489, by way of an illustrative example (applied by DHCJ Marlene Ng in Lee Bing Cheung v Secretary for Justice, HCA 1092 of 2010 (21 February 2013) at §161) as follows:-

“… Interesting questions can arise where a squatter bars a leasehold tenant. If L [the landlord] leases land to T [the tenant] for 99 years and S [the squatter] occupies the land adversely to T for 12 years, S has extinguished T’s title. But this has no effect of L’s title. L has disposed of his right of possession for the term of the lease, and nothing done by third parties in the meantime will give it back to him. L cannot therefore eject S, since apart from any right of forfeiture, no right of action to recover the land will accrue to L until the expiry of the term of T’s lease; and S being in possession, has the best immediate title.” [Emphasis added]

74. The same principles were applied by DHCJ L Chan (as he then was) in Wai Ha Kan v Ho Tze Leung and Others, HCMP 1203 of 2006 (11 May 2009) at §6 as follows:-

“So even if Ng Mun Tong was an adverse occupier of the land since 1960, he was until 30 April 1976 only occupying the same against the interests of Unilight [the tenant], but not that of the registered owners. The reason being that it was Unilight as the tenant that was entitled to possession of the land before 1 May 1976 (see Fairweather v St Marylebone Property Company Limited [1963] AC 510).”

General comments on credibility

75. The principles in relation to assessment of credibility of witnesses have been helpfully summed up by Recorder Eugene Fung SCin the recent case of Hui Cheung Fai and another v Daiwa Development Limited HCA 1735/2009 (unrep, 8 April 2014) at §§76-83.  I shall bear those principles in mind when assessing the credibility of the witnesses in this case.

76. During the trial, the parties have called a total of 5 witnesses on each side. 

77. On the plaintiff’s side, they have called Madam Yeung (PW1); the plaintiff (PW2); KS Chan (PW3) who is the family friend who had accompanied Madam Yeung and her husband to the Land during the first visit in 2006; WC Lee (PW4) who is the son of the plaintiff and the person who was principally involved in the negotiation of the terms of the proposed new lease with the To family from 2006 to 2008; and Wong (PW5), the neighbour who had witnessed the signing of both the 1992 Agreement and the 1994 Receipt.

78. On the 1^st defendant’s side, they have called Father To (DW1); To Kam Mui (杜金妹) (DW2) who is the daughter of the 1^st defendant and sister of Father To; PT To (DW3) who is the 1st defendant’s son and the brother of Father To; Ron To (DW4) who is the grandson of the 1^st defendant and the son of Father To; and KL To (DW5) who is the other son of Father To and another grandson of the 1^st defendant.

79. Generally speaking, I am impressed with the evidence given by the plaintiff’s witnesses.  Some of those witnesses like Madam Yeung, the plaintiff and Wong, even though they had received very little education, were able to give their evidence in a clear, cogent and straightforward manner.  Not only their evidence was consistent with the contemporaneous documents produced by the parties in this case, they are also consistent with some of the undisputed or indisputable facts.  Further, they are internally consistent with the witnesses’ own evidence and compatible with the objective facts and overall circumstances.  I am particularly impressed by WC Lee as a witness in that not only his evidence is consistent with the existing documents (like the e-mail exchanges between him and Ron To) and the overall circumstances in the case, it is also consistent with the evidence given by the other plaintiff’s witnesses and the documents which had come into existence before the adverse possession was ever raised by the 1^st defendant.  KS Chan’s evidence also supports the evidence of the other plaintiff’s witnesses.  But the most reliable evidence in this case in my view comes from Wong, who, not only was a totally independent witness, his honesty and high moral sense in telling the truth has left a strong impression in my mind. 

80. I am afraid that I cannot say the same regarding the 1^st defendant’s witnesses.  I do not find the evidence of Father To, Madam KM To, PW To and KL To particularly convincing.  Not only their evidence goes against the evidence of the independent witness Wong who had witnessed the signing of both the 1992 Agreement and the 1994 Receipt, some of them are just inherently improbable and internally inconsistent with each others’ evidence.  They also contradict some of the objective facts and documents and do not fit in with the overall circumstances.  In any event, most of the evidence given by Madam To and PW To are peripheral in nature and do not touch on the core issues of the case.  I find Ron To’s evidence particularly incredible.  Not only it goes against the contemporaneous documents (like the e-mails and draft lease exchanged between him and WC Lee), some of the matters he stated in evidence simply flies in the face of common sense and goes against the overall probabilities.  I also bear in mind the strong motives for the 1^st defendant’s witnesses in either lying or at least not telling the court the whole truth in order to claim possessory title to the Land.

81. Therefore, where there are discrepancies between the evidence given by the parties’ witnesses, I have no hesitation in accepting the evidence given by the plaintiff’s witnesses and reject those given by the defendant’s witnesses.

Findings on the 2 Main Issues

(I)      Dispossession of Tenant Issue

82. On the Dispossession of Tenant Issue, it is important to bear in mind that the following matters are not disputed by the parties:-

(1)   In the 1992 Agreement where Yip sold the temporary structures on the Land to Madam Lee, it has been specifically stated in the agreement that “all rental payments thereafter would be shouldered by the Purchaser” (「以後田租由承讓方負責」);

(2)   When Madam Lee entered into the agreement with To Senior and Chan for the purchase of the temporary structures on 5 October 1994, the agreement was evidenced by the 1994 Receipt signed by Madam Lee; and

(3)   Wong witnessed the signing of both the 1992 Agreement and the 1994 Receipt by putting his signature on both documents.

83. Judging from the above, I agree with the plaintiff’s counsel and find that:

(1)   Madam Lee knew that the Land was owned by someone other than Yip and she was expected to pay rent to the landowner in future when required;

(2)   As Wong was asked to witness the signing of both the 1992 Agreement and the 1994 Receipt, it is extremely unlikely that there would be material change on the arrangement on the sale of the temporary structures on those occasions. Otherwise, one would expect Wong would have raised them with the parties involved and might have even refused to put his signature on the documents; and

(3)   It will only make sense for Madam Lee to point out to the 1^st defendant, her late husband and her younger brother Chan that:

(a) rental had already been made for at least a certain period of time;

(b) more importantly, to make it clear that she would not be personally responsible for any future rental payment.

84. I agree with Mr Chau that very convincing evidence will have to be produced by the 1^st defendant to cast doubt on the above reasonable and logical deduction.  However, unfortunately, To Senior has passed away in March 2009 and the 1^st defendant I was told is now in her late 90s and is confined to a nursing home.  She was not able to assist the court by giving evidence in this case.

85. I further agree with Mr Chau that the above inference is relevant to the court’s assessment on the credibility of the witnesses on the following matters:

(1)   Whether Yip had made rental payment of 20 years to Madam Yeung in 1983; and

(2)   Whether To Senior or the 1^st defendant had knowledge that the true owner of the Land would be back in some future date to collect the rent from them.

86. On these matters, I accept the evidence of Madam Yeung.  Although she had received very little education and could hardly read or write, she was able to recall the past events in a clear and vivid manner.

87. Madam Yeung told the court that Li Senior had granted a lease to Yip in 1963.  She knew that because she was in Hong Kong at the time and the matter was recorded in a small booklet (薄仔). After Li Senior had passed away, the rental payment was made by Yip to Madam Yeung by cash.

88. Madam Yeung further told the court that she had personally received the rental payment from Yip in 1983.  The total payment was at HK$3,000, being the rental payment for 20 years at HK$150 per year.  The reason she could remember the year of receiving the rental so clearly is because she had returned to Hong Kong during that year to purchase a flat for the family.  She also told the court that originally Yip was thinking of buying the Land from the family but ultimately agreed to make rental payment for 20 years in advance knowing that the landowner’s family would usually stayed in the UK and not return to Hong Kong often.  She told the court about she herself and Yip had recorded the payment in 2 different booklets.  I accept her explanation that her own booklet was kept by her great uncle (叔公) who was living next door while she was away from Hong Kong.  I further accept that her great uncle’s possession, including the booklet, had been burnt by others after he passed away.

89. In my judgment, the explanations given by Madam Yeung above are entirely reasonable and make perfect sense in the circumstances of this case.  As she told the court, Yip had seen her returning to the village in 1983.  She told him that she was in the process of purchasing a flat but was running a little bit short of cash, therefore, she asked him to pay the 20 years rent in advance to her.  I also accept the reason why she would not sell the Land to Yip eventhough Yip had wanted to purchase it from her is because the Land was not in her own name but in the name of her husband.  Since her husband was not in Hong Kong with her on that occasion, she had no authority to sell the Land to Yip.  In my view, there is no question that Madam Yeung had the authority to collect the rent from Yip either on behalf of Li Senior’s estate or her husband.  Madam Yeung’s authority had never been doubted or challenged by Yip who had been paying rent to her ever since Li Senior’s death in 1974.  Thus, I am of the view that it is not open for the 1^st defendant to challenge her authority to receive the rental from Yip back in 1983.  

90. Further, in my opinion, Madam Yeung’s evidence is consistent with what she was told during the visit she made with her son (WC Lee) and her husband (Father Li) together with the family friend KS Chan to the Land in early 2006.  On that occasion, she recalled that they saw an old couple on the Land.  I believe her when she says that the old lady, who most likely was the 1^st defendant, had mentioned to them that “They would like to pay rent, but could not find the landowner.  They were told that the landowner had immigrated aboard and therefore they could not pay rent” (「我哋都想交租，但係搵唔到嗰個業主，嗰個業主都話，聽人講話去咗外國，話移民去咗外國，所以我哋無交租。」).  To my mind, this is an unequivocal admission that the 1^st defendant knew and accepted that the Land was subjected to a lease and they had intended to pay rent to the landowner under the lease.  In my judgment, such an intention is plainly and completely inconsistent with the intention to possess which is requisite for establishing adverse possession: see Wong Tak Yue, surpa, per Li CJ at 69C-F. 

91. Madam Yeung’s account is totally consistent and supported by the evidence of Wong.  As said, Wong is an independent witness who has no personal interest in the outcome of this case and has no motive to lie.  Eventhough he gave evidence as one of the plaintiff’s witnesses, it transpired during the trial that the 1^st defendant’s side had at one stage wanted him to act as their witness and had in fact asked him to sign a written confirmation note dated 27 May 2013 (“the Confirmation Note”) which purportedly supports the 1^st defendant’s case.  Wong knew the 1^st defendant’s family since 1995.  They have been neighbours in the same village.  Even according to the 1^st defendant, they have always been on good terms as neighbours, even up to now.

92. According to Wong, after realizing that the To family intended to claim possession of the Land for themselves, he decided to act as the plaintiff’s witness instead.  I was most impressed when he says that he has always lived by the principle that one has to live a life of integrity and honesty.  He saw that as his duty as a human being to speak the truth (「做人本份」).

93. It is not in dispute that Wong had witnessed both the signing of the 1992 Agreement and the 1994 Receipt.  In his evidence, Wong vividly recorded that, at the time of signing of the 1992 Agreement, Yip had told Madam Lee that:-

(1) The owner of the land lived in the UK and she ie Yip had already paid rental for “10 odd to 20 years” (「已交十幾二十年租」); and

(2) Madam Lee would be responsible for the payment of the rent thereafter. 

Under cross-examination, Wong frankly admitted that Yip did not say exactly when the “10 odd to 20 years” of the rent was paid. However, he was adamant that Yip had already paid rent to the landowner and Madam Lee has to pay them rent when the landowner returns.  While Yip might not have mentioned the year of 1983, Wong was absolutely sure that Yip had told Madam Lee when signing the 1992 Agreement that he had already paid rent for “10 odd to 20 years”.  The reason being that Yip was afraid that Madam Lee “would not recognize this when the landowner returns”.  Therefore, Yip had specifically mentioned this to them.

94. In respect of the 1994 Receipt, Wong witnessed the paying of the deposit of HK$10,000 from To Senior and Chan to Madam Lee.   According to him, the transaction then became a reality (「交易成為事實」).  He agreed that the total amount for transferring the temporary structures on the Land was at HK$80,000 and the deposit was at HK$10,000.  He saw it with his own eyes of the exchange of money between the parties.  On that occasion, Madam Lee did mention to the new buyers, ie To Senior and Chan that the landowner was residing in the UK and they have to pay rent to the landowner when they return in future.  Wong said the reason was Madam Lee wanted the new owners of the temporary structures “to live in peace” and that she would not like to do anything to hurt herself and others (「累己累人」).  Wong says that Madam Lee was only being honest and truthful and he was absolutely sure that she did say that to To Senior and Chan during the transaction.

95. I have no reason to doubt any of the above matters related by Wong is anything other than the truth.  I find them to be exactly what happened during those 2 transactions and was an accurate account of what took place at the time.  Based on Wong’s evidence, I find that the 1^st defendant was fully aware that her occupation of the Land was subjected to a lease entered into between her predecessor and the landowner.  Any alleged dispossession by her against the previous lessee does not set time running against the landowner: see for example Chung Ping Kwan and Others v Lam Island Development Co Ltd, supra.

96. On the signing of a Confirmation Note prepared by the 1^st defendant’s family, I accept Wong’s evidence that he did not read nor was the content of the document ever explained to him before he signed the document.  I accept that he was merely told by Father To that it was for the confirmation of his late father (ie To Senior) in purchasing the temporary structures on the Land only.  When he signed the document, he was only shown page 2 of the document where he needed to put his signature.  He did not realize until much later that the Tos had stated on page 1 of the Confirmation Note that when Madam Lee sold the temporary structures to To Senior and Chan, it was allegedly “without any attaching conditions” (「並沒有附帶任何條件」).  He disagrees with that as it was not true.  He says he was only willing to sign the Confirmation Note “out of sympathy” to the Tos as he was told by Father To and his son that the landlord had unreasonably refused to make any compensation to them.

97. In the aforesaid premises, I have scant doubt that when the 1^st defendant and her husband To Senior, together with Chan, purchased the temporary structures in 1994, they were fully aware that the Land was subjected to a lease and rent for “10 odd to 20 years” had already been paid by the previous tenant and that they have to pay rent to the landowner when he returns.  This in my view is entirely consistent with what To Senior and the rest of the To family had told the plaintiff and his family during their first few visits to the Land in 2006 to 2007.  As such, even if the 1^st defendant was an adverse occupier of the Land since 1994, she was only occupying the same against the interests of the tenant, but not that of the registered owner: (see for example Chung Ping Kwan and Others v Lam Island Development Co Ltd, supra; Fairweather v St Marlebone Property Co Ltd, supra, and Wai Ha Kan v Ho Tsz Leung and Others, supra).  

98. On Issue (I), Mr Ng Man Kin, the solicitor representing the 1^st defendant, has raised 2 separate sub-issues by way of defence which I am going to deal with now.  They are:-

(1) The ten-year lease expired in 1972 and therefore no new lease would be created in 1983; and

(2) Madam Yeung had no authority to create the lease on behalf of the estate of the late Li Senior.

(1)   The ten year lease expired in 1972

99. The 1^st defendant alleges that while the plaintiff does not say it was a fixed-term lease which was created in 1963, it is Madam Yeung’s unequivocal evidence that the lease was a 10-year fixed term lease which had expired in 1972.  The 1^st defendant says that the plaintiff is bound by his own evidence.  Hence, the 1^st defendant says that the plaintiff’s case must be that in 1963 there was only a 10 year fixed term lease which would expire in 1972. 

100. As a matter of law, the 1^st defendant says that a fixed term lease is terminated by expiration of this term.  A lease granted for a fixed term expires by effluxion of time when the term comes to the end.  It does so automatically and without notice: see §17/2002 Woodfall’s Laws of Landlord and Tenant, Vol. 1, Sweet and Maxwell.  Therefore, the 1^st defendant submission is that the fixed term lease coming from 1963 and expired in 1972. 

101. The 1^st defendant goes on to say that there was no evidence to show that the lease was extended or renewed by the parties when it expired in 1972.  Therefore, no new lease was created by the parties at that time.  The 1^st defendant claims therefore that Yip had simply “held over” and remained in possession of the Land until 1983 when Yip eventually paid HK$3,000 rent to Madam Yeung.  By relying on Madam Yeung’s evidence that in 1983 no new tenancy was “created” and she had only intended to “continue” with the existing tenancy (in the same terms as the alleged 10 year lease), this “mistaken lease” somehow “negates any intention of creating a new tenancy”.

102. I agree with the plaintiff’s submission that the 1^st defendant’s argument on this whole matter is (1) basically linguistic in nature and relies heavily on the words used by Madam Yeung when she gave evidence (who of course is a lay person with very little education and certainly possesses no legal knowledge); and (2) since no issue of whether there was a new lease in 1972 was ever raised (even in the agreed list of issues), naturally no evidence was adduced in this regard. 

103. I reject the 1^st defendant’s argument on this issue for several reasons.

104. First, I agree with Mr Chau, counsel for the plaintiff, that, as matter of law, it is not clear whether the evidence of Madam Yeung’s subjective intention regarding the lease is admissible at all.  As in a contract, a court is only concerned with the objective, as opposite to the subjective, intention of the parties.  Thus, what Madam Yeung understood to be the situation might not be what actually happened in the case: see Pumfrey J in London Baggage Co (Charing Cross) Ltd v Railtrack Plc [2000] L&TR 439. 

105. Second, I agree with Mr Chau that even if evidence of subjective intent is admissible (which I do not think it is), Madam Yeung’s evidence clearly supports the creation of a lease rather than negate it.  Based on Madam Yeung’s evidence, it cannot be disputed that:-

(1) both the plaintiff and Yip desired to have the lease;

(2) the lease would be in the same terms as the old lease; and

(3) Yip paid 20 years rental accordingly and remained in possession of the Land.

106. Third, I consider that the evidence of Madam Yeung is clear and of which I accept.  There was in existence a lease between Yip and Li Senior at the time when Yip paid the 20 years rent in advance in 1983.  Under the lease, Yip was required to pay HK$150 rent per annum to the landowner.  The evidence is that Madam Yeung had been receiving such rent on behalf of the estate ever since the death of Li Senior in 1974.  There is no evidence to suggest that those rent were paid on a fixed 10 year basis.  The reason why 20 years of rental was paid in advance in 1983 has been clearly explained by Madam Yeung in her evidence of which I accept.  In the circumstances, I find there was no 10-year fixed term lease but an annual renewable lease of which 20 years of rent had been paid by the previous tenant in 1983.  

107. Therefore, in my judgment, there is no question of there existed a vacuum between 1972 and 1983 when there was no tenancy subsisting in the Land as alleged by the 1^st defendant at all.

(2)   Madam Yeung’s authority to receive rent

108. The 1^st defendant claims that Madam Yeung had no authority to receive the rental for and on behalf of Li Senior or his estate.  The 1^st defendant claims that the originally pleaded case of the plaintiff is that Madam Yeung acted for and on behalf of Li Senior.  However, as any actual authority of an agent is determined by the death of either the principal or agent (see §§10-015 to 10-016 of Bowstead and Reynolds on Agency 19 ed., Sweet & Maxwell), the 1^st defendant claims that Madam Yeung could not have acted on behalf of the deceased.  The 1^st defendant says that when the plaintiff’s counsel opened his case, this was changed to Madam Yeung was acting for and on behalf of the estate of Li Senior.  Further, the 1^st defendant relies on the fact that in her evidence, Madam Yeung stated that she was acting for and on behalf of her husband, ie the plaintiff in this case. 

109. Since the plaintiff did not own the Land in 1983 (as his succession of title to the Land was only approved by the authorities in 2009), the 1^st defendant claims that the plaintiff could only be treated as the owner of the Land from that date and not before.  As such, the 1^st defendant claims that Madam Yeung could not have represented the estate or her husband in 1983, without the application and granting of any letters of administration in his name.  In this respect, the 1^st defendant relies on §§425.427-428 of Halsbury’s Laws of Hong Kong, vol. 51, 2^nd ed., LexisNexis and the local cases of Ho Cheng Shi v Ho Sau Lam (1920) 15 HKLR 35, per Gompertz ACJ at 39; Re the Estate of Chak Chiu Hang (1925) 20 HKLR 1; HSBC Private Trust (Hong Kong) Ltd v Au Yeung Chung (for herself and the estate of Lau Hak, deceased, unreported, HCA 1662/2001 and Wu Koon Tai & Another v Wu Yau Loi [1997] AC 179 at 187 per Lord Brown Wilkinson.

110. I have no hesitation to dismiss the 1^st defendant’s submissions based on the lack of authority argument for the following reasons.

111. First, the alleged lack of authority on the part of Madam Yeung has never been pleaded in the defence as part of the 1^st defendant’s case.  This matter was only brought up for the first time during cross-examination.  If this was one of the major grounds of defence going to be relied on by the 1^st defendant, I would expect that this matter would have been properly pleaded and canvassed at the opening stage of the defence’s case.  But that was not done, whether in the defence or by way of a rejoinder.  It therefore seems to me that this is more like an afterthought when the 1^st defendant was only able to stumble across some technical legal points during cross-examination of Madam Yeung. 

112. Second, it is quite apparent that when the District Officer of Yuen Long wrote to the solicitors of the plaintiff on 23 January 2009 informing them that the plaintiff’s application to succeed to the estate of Li Senior in accordance with the provisions of NTO and NTL(E)O had been approved, the effective date was from 28 January 1974 onwards, ie the date of death of Li Senior.  In my view, the letter puts it beyond any shadow of doubt that all the interests in the Land of Li Senior had been vested with the plaintiff from that date onwards and not from the date of the application or approval.  In other words, from 28 January 1974, the plaintiff or his authorised agent could deal with the Land in whatever manner he saw fit, whether it is on behalf of Li Senior or himself: See for example Wing Tung Yick v AG [1997] 4 HKC 432 at 436B-I where the court recognized the “retrospective” effect of section 17 of the NTO and held that the land in question were vested in the successors as of the date of deaths of their fathers.  It is important to note that, like in the present case, no grant of probate or administration of the estates of the fathers was made within 3 months of their respective deaths in that case. 

113. Third, I agree with Mr Chau that Madam Yeung, being the plaintiff’s wife, obviously would be clothed with all the necessary authority to receive rent from the tenant, be it actual, implied or apparent authority.  Even if Madam Yeung had no authority at the time, the plaintiff could always ratify her acts at any time.  It would not be necessary for Madam Yeung to ask for express authority from her husband prior to asking for the rental from Yip in 1983.  In this case, it is important to bear in mind that Yip had never questioned her authority to accept rent on behalf of the plaintiff or the estate.  Afterall, she had collected rent from Yip after Li Senior died and before she moved to the UK.  Since it was never put to Madam Yeung that she had never been given such an authority (either by Li Senior or the plaintiff), nor it was put to the plaintiff that he had not ratified Madam Yeung’s conduct, in my view, the 1^st defendant has no legal or factual basis to raise this issue.

114. Fourth, I consider that the facts of this case can be easily distinguished from the case of Wu Koon Tai & Another v Wu Yau Loi, supra which Mr Ng heavily relies on purportedly to make good the point that even if Madam Yeung was acting on behalf of the plaintiff, the plaintiff himself had no authority to create a lease on behalf of the estate of the late Li Senior as the title of the Land was never vested in the plaintiff at the time. 

115. In Wu Koon Tai, the Privy Council held that the transfer of title to land in the New Territories by inter vivos transactions or on death was regulated not by Chinese customary law but by the general law of Hong Kong and the system of registration established by statute.  Since the son had never been registered under section 17 of the NTO as the father’s successor, the land had never been vested in the son so he could not validly have transferred title to that land to the purchaser by the document executed in 1934.  However, by virtue of section 17, the title had vested directly in the grandson on his registration as the father’s successor in 1951, where he was registered as successor to the father.  Hence, the title was successfully vested in the successor to the grandson: (See pp 187G-188A of Wu Koon Tai, supra.)

116. I agree with Mr Chau that the 1^st defendant has misread the case.  It is true that the title of the land was never vested in the son in Wu Koon Tai due to the fact that he had never registered under s 17 of the NTO as successor to the father.  However, in my view, the plaintiff’s position is not the same as the son in that case but more like the grandson who had registered under s 17.  The Privy Council found that the grandson had succeeded in obtaining the title to the land through the registration and was able to pass the title of the land to the defendant in that case who registered under s 17 as the grandson’s successor.  I consider that it would create an extremely odd if not unfair situation if there could be a lacuna or “vacuum period” where no one could validly do anything over the Land.  In my judgment, this was what the Privy Council was trying to avoid in Wu Koon Tai when it held that the son could still contract to sell as a devisee of the land even without the s 17 application.  I further consider that, as a matter of public policy, the court should be very slow in accepting an argument that would have the effect of nullifying a successor’s dealing with a third party during the “vacuum period” prior to the registration.   

117. In the premises, I am of the view that the 1^st defendant’s 2 arguments on the Dispossession of Tenant Issue must fail.

Conclusion on the Dispossession of Tenant Issue

118. For the aforesaid reasons, on a balance of probabilities, I consider that the plaintiff has succeeded in proving that the Land was subjected to a tenancy at all time and rent had been paid at least up to 2002 by the previous tenant when the 1^st defendant and her late husband entered into possession of the Land in 1994/1995.  As such, her occupation would be adversed only to the leasee at the time but not the landowner.

(II)    The Requisite Intention Issue

119. On this issue, there is no doubt in my mind that the 1^st defendant and her late husband To Senior at all material time were willing to pay rent to the owner of the Land when requested.  As such, she has not demonstrated the requisite intention to possess the Land in exclusion of all others, including the owner with the paper title: See for example Powell v McFarlane, supra and Wong Tak Yue, supra.   

120. In this case, the evidence to show that the 1^st defendant did not have the necessary intention to possess is overwhelming.  They can be seen from the following events.

(1)    When the 1^st defendant and To Senior entered the Land in October 1994;

(2)    During the Li family’s few first visits to the To family at the Land in 2006 and 2007; and

(3)    The negotiations of the new lease which took place between WC Lee and Ron To in 2007/2008.

121. I have already discussed some of the facts and evidence in relation to the 1^st defendant and her late husband’s purchase of the temporary structures and subsequent entering into possession of the Land in October 1994 above (see §§82 to 97 above).  I do not need to repeat them here.  In my view, those evidence overwhelmingly point to the fact that the 1^st defendant and her late husband were fully aware that their occupation of the Land was subjected to the terms of a lease and they had accepted the fact that they would have to pay rent one day when the landowner returns from the UK. 

122. Mr Ng very fairly accepts that Wong is a careful and honest witness.  He further accepts Wong’s evidence that he would not sign on the 1994 Receipt if he did not witness the payment of HK$10,000 deposit.  He also accepts Wong’s evidence that Madam Lee did inform To Senior and Chan that the Land was subjected to a lease. 

123. However, Mr Ng tries to make a very technical distinction in saying that Wong in his evidence did not testify the response or reaction of To Senior or Chan after they had heard what Madam Lee said to them about the lease. Therefore, even taking the plaintiff’s case at its highest, the 1^st defendant says that all can be shown was that To Senior and Chan knew that the Land was subject to a lease but there is no evidence to say that they had ever agreed to continue to pay the rent when the landowner returns.

124. I have no difficulty in rejecting this thoroughly bad argument.  In my view, it is absurd to suggest that the alleged silence on the part of To Senior and Chan during the occasion when the 1994 Receipt was signed equals to the fact that they had not agreed to pay rent in future.  I am sure that they would have immediately raised their objection when Madam Lee mentioned the matter to them had it been their intention not to pay rent for the Land in future.  Bearing in mind that the burden of proof is on the 1^st defendant, I find that she has failed miserably in proving this matter.

125. More importantly perhaps is the fact that when Madam Yeung, WC Lee, his wife and KS Chan visited the Land for the first time in February 2006, the old couple they had met there (believed to be To Senior  and the 1^st defendant which is a fact not disputed by the 1^st defendant) acknowledged that they were told that the landowner was living abroad and they have to pay rent to the owner when they return.  During WC Lee and his wife’s second visit in April 2006, the old couple (believed to be To Senior and the 1^st defendant) reiterated their willingness to pay rent.  On another visit around May 2006, the 1^st defendant told WC Lee that the rental of $100 to $200 per annum suggested by him was reasonable.  Further, To Senior assured WC Lee that he would be willing to pay rent and asked him to talk to his son as he was illiterate.  On another visit to the Land towards the end of 2006, WC Lee was told by a person believed to be Father To to negotiate the terms of the lease with his son Ron To.  It was on that occasion that Ron To asked WC Lee to prepare the draft terms of the new lease for their consideration.    

126. I accept the plaintiff’s witnesses’ evidence on the above as I consider them to be truthful and honest.  While there may be some discrepancies between their evidence, eg like who might have said what on the different occasions during their many visits to the Land, they are in my view not material.  I also accept that there may be some discrepancies between the evidence they gave in court and the contents of their witness statement or affirmation.  However, they are only on peripheral matters and not on the central issues of the case. In any event, I accept the explanations given by WC Lee of the difference between his affirmation and witness statement.  The more important consideration is that I accept the evidence they gave under oath in the witness box.  

127. Looking at those events as a whole, there is no doubt in my mind that both To Senior and the 1^st defendant were fully aware that their occupation of the Land was subjected to a lease and that they had agreed to pay rent both in 1994 when they first entered into the Land and in 2006/2007 when the plaintiff’s family members visited them. 

128. The above events are consistent with the fact why Ron To was subsequently instructed by the family to act as the person to negotiate the terms of the new lease with WC Lee on behalf of the To family.   

129. As said, both To Senior and the 1^st defendant, due to their death and old age respectively, did not give evidence in this case.  Father To in his evidence tried to convince the court that there was no lease to the Land at all.  For the first time in these proceedings and during cross-examination only, Father To suggested that To Senior, in the presence of his mother, had actually told him that he had bought “the Land and the temporary structures” as contrast to “the temporary structures on the Land” only.  Therefore, the suggestion is that his father and Chan had bought the Land together with the temporary structures at the same time and that there was no lease at all.

130. In my view, his evidence on this at best is ambiguous if not confusing. I am sure it was not true.  In my judgment, this is a very poor last minute attempt on the part of the 1^st defendant to try to deny the existence of the lease.  Not only Father To’s account of the event is contrary to (1) the 1^st defendant’s defence of which he has signed the statement of truth on behalf of his mother; (2) the contents of his own witness statement; and (3) the Confirmation Note of which he directed his son KL Lun’s wife to write, it completely goes against other contemporaneous documents like the 1992 Agreement, the 1994 Receipt and the subsequent draft terms of the new proposed lease.  This is also in direct contradiction with the evidence of his son KL To who insisted that To Senior had told him that he had only bought the temporary structures on the Land and not the Land itself.  According to KL To, that was the reason why the same was reproduced in the Confirmation Note.   

131. I also do not believe him when he says that he had never met WC Lee during his various visits to the Land during 2007 to 2009.  I simply cannot imagine WC Lee would make up such meetings had Father To was not present in any of them.

132. I also do not believe that he has never instructed Ron To to negotiate the proposed new lease with WC Lee.  Had he or To Senior (while he was still alive) not done so, I cannot imagine why Ron To, who had never lived on the Land, would take on himself the job of negotiating the terms of the proposed new lease on behalf of the family.

133. Ron To is a particularly poor witness.  In my opinion, his evidence is simply not worth believing for the following reasons:-

(1)   The chance meeting in the path outside his grandparents’ place he referred to in his witness statement as the first occasion when WC Lee had mistaken him as the occupant of the Land was simply not credible;

(2)   While he said he had no authority to negotiate on behalf of his grandparents, he nonetheless took it on himself to communicate with WC Lee by multi rounds of emails to conduct the negotiations on the draft terms of the new lease;

(3)   There is no reason why he could not have consulted at least Father To before replying to WC Lee’s email on 17 March 2007 if he was dealing with a complete “stranger” in the person of WC Lee whom he had never met before;

(4)   If he or his family thought that his grandparents had actually  “owned” the Land (as contrast to the temporary structures on the Land only), why did he even bother to enter into negotiations with WC Lee on the new lease at all;

(5)   The multiple rounds of emails and very detailed amendments to the terms of the draft lease made by him suggest that he had consulted his family members before responding to WC Lee;

(6)   His assertion that WC Lee was trying to claim back the rent for the past several decades simply was not consistent with the documentary evidence and the overall circumstances of the case; and

(7)   His claim that he went into negotiations of the new lease without the consent from his grandparents and without telling them or his father as he did not want to disturb them due to their old age simply does not make sense.

134. I am quite certain that Ron To was lying when he claims that he was acting on his own and without the authority of his grandparents when he negotiated the terms of the lease with WC Lee. I reject his evidence completely as they are inherently improbable.  I find that he met WC Lee in the circumstances as related by the plaintiff’s witnesses and I further find that he had entered into negotiations with WC Lee with the full authority of the 1^st defendant and the late To Senior. 

Conclusion on the Requisite Intention Issue

135. In the aforesaid circumstances, I find that the 1^st defendant has failed to establish that she had or has the requisite intention to possess the Land.

CONCLUSION

136. In conclusion, I find in favour of the plaintiff in the 2 main issues in this case.

137. Therefore, I order that judgment be entered in favour of the plaintiff against the 1^st defendant for the following:-

(1)   A declaration that the plaintiff is entitled to the possession of the Land and that all persons in occupation, including the 1^st defendant, her sub-tenants or licensees, are in occupation without licence or consent; and

(2)   An order that the plaintiff is entitled to recover possession of the Land.

138. I would also dismiss the counterclaim made by the 1^st defendant.

139. Costs should follow the event.  I make an order nisi that the 1^st defendant do pay the plaintiff’s costs of the action, such costs to be taxed if not agreed with certificate for counsel.  The 1^st defendant’s own costs, insofar as they are related to the time before the legal aid certificate was discharged, be taxed in accordance with the legal aid regulations.  The order nisi will become absolute 14 days after the date of this judgment unless the parties apply to vary the same.

140. Lastly, I wish to thank counsel for the plaintiff and the solicitor representing the 1^st defendant for their very helpful assistance in this case.