YIP YAN CHEUNG GARY v. CHOW TIN CHOI

CACV 123/2016

[2018] HKCA 70

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 123 OF 2016

(ON APPEAL FROM DCCJ NO 2645 OF 2012)

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REASONS FOR JUDGMENT AND
DECISION ON COSTS

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Hon Lam VP (giving the Reasons for Judgment and Decision on Costs of the Court):

1.  This is an appeal against the judgment of 23 July 2015 of Deputy District Judge J Wan in DCCJ 2645 of 2012. By that judgment, the judge dismissed the Plaintiff’s claim as registered owner of the land known as Lot No 105, R.P. of Lot 106 and R.P. of Lot 108, all in Demarcation District 360 (“the Land”) for possession of the Land. The judge also granted declarations in favour of the Defendant, barring the Plaintiff’s claim on the ground that it had been extinguished by virtue of Section 17 of the Limitation Ordinance Cap 347 and that the Defendant had acquired a possessory title by adverse possession. He also ordered the Plaintiff to pay the Defendant’s costs of the action.

2.  With leave granted by this Court (Lam VP and G Lam J) in HCMP 759 of 2016 on 20 May 2016, the Plaintiff appealed.

3.  After hearing counsel on 24 January 2018, we allowed the appeal, set aside the judgment of the judge and remitted the questions as to the dispossession of the Plaintiff since 1981 and the nature and extent of occupation of the Land by the Defendant from 1981 to 2002 to the court below for a re-trial on those issues and those issues only.

4.  We also granted leave to the Defendant to amend the Re-amended Defence and Counterclaim to add a paragraph 13A to plead the alternative case of adverse possession being acquired after the repossession of the Land by the Plaintiff in 1981.  Paragraph 13A is in these terms:

“ 13a Further or alternatively, if the possession by the Defendant and his family of the Land ceased physically or by operation of law by reason of termination of any licence in or about 1981, which is denied, the Defendant and his family continued or resumed physical, continuous and exclusive possession of the Lands amounting to adverse possession from 1981 or any time thereafter such that at the time of the issue of the writ herein 20 years and/or 12 years (if the said adverse possession commenced after July 1991) have expired such that the Plaintiff’s title to the Lands was extinguished and the Plaintiff’s claim for re-possession of the Lands is time-barred.”

5.  We now give reasons for our judgment.

6.  The following facts as found by the judge were not disturbed by us and would not be re-opened in the remitted trial:

(a)   The Land was previously occupied since 1964 by the parents of the Defendant under an oral lease granted by the aunt of the Plaintiff, Madam Cheng, in 1964;

(b)   Madam Cheng passed away in 1976.  Title on the Land passed to the Plaintiff by way of testamentary gift.  The Plaintiff continued to permit the parents of the Defendant to use the Land though no rent was charged.  The only condition was that they had to surrender the Land upon the Plaintiff’s request;

(c)   The licence granted by the Plaintiff to the parents of the Defendant was terminated in 1981 because there were road works in the vicinity and the Government resumed part of the land then owned by the Plaintiff and water supply to the Land was suspended.  As a result, the parents told the Plaintiff that they no longer needed to use the Land and the Plaintiff repossessed the Lands in 1981.

7.  On the above facts, there could not have been any adverse possession of the Land up to 1981.

8.  In the judgment, the judge found for the Defendant on the basis of adverse possession after 1981.  However, it is not clear from the judgment as to the circumstances in which the Defendant or his parents dispossessed the Plaintiff after possession of the Land was handed back to the Plaintiff.  One might ask rhetorically, if the parents of the Defendant intended to continue with cultivation on the Land despite the lack of water supply, why would they be bothered with surrendering the same to the Plaintiff in 1981? In a case where the occupier had possessed the land with the consent of the owner and surrendered the land back to the owner, the circumstances in which the occupier resumed possession again had to be investigated in some detail in order to determine if a case of dispossession of the owner can be made out and to ascertain the timing and the extent of dispossession. 

9.  At paragraph 36 of the judgment, the judge seemed to be of the view that the Defendant and his family “continued to” cultivate on the Land. But in the next paragraph, paragraph 37, the judge acknowledged difficulties in that regard due to the state of the aerial photos of the 1990s.  In the end, the judge was only able to say that there was a real possibility of the Land being possessed by the Defendant throughout the 1990s.

10.  On the face of the judgment, with respect, the findings on the human activities based on the judge’s interpretation of the aerial photos for the period between 1981 and 2002 were rather equivocal because the judge also accepted the Plaintiff’s evidence that he did not notice any occupation of the Land during his inspections of the Land since 1982.  The judge came up with his own suggestion that such mistake could be attributable to the size of the Land.  However, with respect, we do not think that suggestion was supported by evidence.

11.  In Powell v McFarlane (1977) 38 P&CR 452, at p.472, Slade J observed:

“ 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. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words 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.”

12.  And further at p.480:

“ In view of the drastic results of a change of possession, however, a person seeking to dispossess an owner must, in my judgment, at least make his intentions sufficiently clear so that the owner, if present at the land, would clearly appreciate that the claimant is not merely a persistent trespasser, but is actually seeking to dispossess him.”

13.  Fencing and gate barring outsiders from having access to the Land was only erected by the Defendant in 2002.  Prior to that, unnoticeable planting of fruit trees by the Defendant or his parents after the repossession of the Land by the Plaintiff may or may not be sufficient to support a finding on the requisite intent.  It must depend on the scale and frequency of such use and other measures in place to exclude the Plaintiff as owner from entering the Land.  There is at least some evidence from the Plaintiff that he was able to gain access to the Land before 2002 during his inspections.  In Gotland Enterprises Ltd v Kwok Chi Yau CACV 260 of 2014, 19 January 2016, this Court upheld the conclusion of the Court of First Instance that the use of land for fish farming and duck rearing by a squatter was, on the facts of that case, equivocal.

14.  Due to the way in which the defence case was pleaded and conducted, counsel did not explore these issues with sufficient details and the judge did not make sufficient findings in that regard.

15.  Prior to the addition of paragraph 13A to the Re-amended Defence and Counterclaim pursuant to leave granted by us, there was no plea in the pleadings nor in the evidence that the Defendant regained possession of the Land after repossession of the same by the Plaintiff in 1981.  The defence case on the pleadings and at the trial was that the Land had always been occupied by the parents of the Defendant by way of adverse possession and there had not been any oral lease or licence.  There was no alternative case that if there had been such non-adverse possession and repossession of the Land by the Plaintiff in 1981, the Defendant (or his parents) had later occupied the Land without the consent or permission of the Plaintiff for a period of time which is sufficient to extinguish the Plaintiff’s title under the Limitation Ordinance.

16.  Mr Shum referred us to paragraph 13 of the Re-amended Defence and Counterclaim which advanced an alternative case:

“ 13. As a result pursuant to Section 17 of the Limitation Ordinance,the title of the Plaintiff’s predecessor in title to the Plaintiff’s Lands was and should have been extinguished by the time the Plaintiff acquired the Lands from it on 16^th July 1976. Alternatively, even assuming the Plaintiffs predecessor's title to the Plaintiff’s Lands had not yet been extinguished by 16^th July 1976, the Plaintiff’s title thereto was and must have been extinguished before the commencement of these proceedings by writ on 3^rd August 2012, irrespective of whether the applicable limitation period is 20 years or 12 years.”

17.  The date of 16 July 1976 in that paragraph was the date of the instrument by which the Plaintiff became the owner of the Land: see paragraph 1A(d) of the Amended Reply and Defence to Counterclaim.  It is quite clear that the alternative plea in that paragraph is not a plea of the Defendant (or his parents) taking steps to occupy the Land to the exclusion of the Plaintiff after the Land had been surrendered by the parents back to the Plaintiff in 1981.

18.  Further, we do not accept Mr Shum’s submission that it was not necessary to plead the alternative case (as he now did by way of paragraph 13A) because the plea of lease and licence and the repossession of the Land in 1981 was only pleaded by the Plaintiff in the Reply and Defence to Counterclaim.  In a claim for possession by the owner of the Land, it is not for the Plaintiff to anticipate the defence of adverse possession in the Statement of Claim.  Hence, naturally these pleas were only raised in the Reply and Defence to Counterclaim after adverse possession was raised by the Defendant in his Defence and Counterclaim.  After these pleas had been raised as part of the Defence to Counterclaim, the Defendant should have responded to the same by a subsequent pleading, with the leave of the Court (if such leave is needed).

19.  As we have said, the failure to advance such an alternative case by the Defendant had led to the lack of focus on the issues relevant to such alternative case at the trial.  Further, we are of the view that the conduct of the case by the Plaintiff could well be different if the alternative case was properly advanced.  The cross-examination of the Defendant could have been different and the experts could have been asked to attend the trial to give evidence.

20.  The present case is different from the case Mr Shum relied upon, Yu Siu Cheuk v Realray Investments Ltd CACV 181 of 2009, 10 November 2009. In that case, there was no question of the owner repossessing the land. Further, the land had been fenced off by the squatter.  Further, in that case, the Court of Appeal also remitted the case for retrial.

21.  In the present case, since the Defendant had given evidence on the occupation of the Land for the period in question (viz between 1981 and 2002), we consider that the appropriate course is to have the issue properly identified on the pleadings (and this is now achieved by paragraph 13A, though Mr Pang SC may ask for particulars in respect of some of the allegations) and the matter should be remitted for a limited re-trial as indicated.

22.  Counsel could not agree on whether the re-trial should be conducted by the same judge.  As it had been said at the hearing, the usual course is for the case be remitted back to the same judge.  Mr Pang failed to persuade us why we should take a different course in the present case. Notwithstanding the judge had made findings on occupation since 1981 which were unfavorable to the Plaintiff, these findings have now been set aside by us.  We have further explained in this judgment on the inadequacy of investigation at the outset on issues which are relevant to the alternative case.  Parties can expect the judge, as a professional judge, would examine these issues without being prejudiced by the previous findings.  We would remit the case back to Deputy District Judge J Wan.

23.  It is agreed that the costs of the original trial should be at large and the trial judge could deal with the same in light of the result at the retrial.

24.  As regards the costs of the appeal, having considered the submissions of counsel, we are of the view that we should follow the usual course, viz the Defendant should pay the Plaintiff’s costs of this appeal with certificate for 2 counsel, including the costs in HCMP 759 of 2016 and such costs are to be taxed if not agreed.  The Plaintiff has to come to this Court to have the judgment set aside and the amendment put forward by the Defendant was only granted by us in the appeal.  

25.  We further direct the parties to apply to the District Court within 14 days from the handing down of this judgment to seek an appointment with the judge for further directions on the conduct of the trial of the remitted issues.  If the Plaintiff wishes to seek particulars (as indicated by Mr Pang), the requests should be made before the appointment.