TOP BILLION LTD v. YAU YUK TAI AND OTHERS

DCCJ 3139/2021

[2024] HKDC 1720

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3139 OF 2021

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JUDGMENT

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Introduction

1.  The present proceedings were commenced by the Plaintiff as the registered owner against the Defendants as occupiers to recover vacant possession of certain pieces of land in Ying Poon Village (the “Village”), Chiu Keng, Sheung Shui, the New Territories.

2.  By way of an Assignment dated 31 October 2018 (the “Assignment”), the Plaintiff was assigned ownership of Lot No 1657 (“Lot 1657”) in Demarcation District 100 from the previous registered owner, Alberto Yu Solis (游育坤) (“Alberto”).

3.  Prior to Alberto, Lot 1657 was owned by 3 brothers, 游釗(“Yau Chiu”), 游典 (“Yau Tin”), and 游高 (“Yau Ko”) (collectively the “Yau Brothers”). Alberto is Yau Ko’s adopted son (養子), whereas the 1^st Defendant is Yau Chiu’s adopted daughter (養女). The Yau Brothers have passed away for quite some time.

4.  After the Assignment, Lot 1657 was divided into four portions. By way of a Deed Poll dated 29 August 2019, Lot 1657 was divided into Lot No 1657A (“Lot 1657A”) and Lot No 1657RP. Later, by a Deed Poll dated 2 July 2020, Lot No 1657RP was divided into three portions, ie Lot No 1657RP (“Lot 1657 RP”), Lot No 1657B (“Lot 1657B”) and Lot No 1657C (“Lot 1657C”).

5.  Thus, the Plaintiff is now the registered owner of Lots 1657A, 1657B, 1657C and 1657 RP.

6.  The Defendants are occupiers of Lot 1657A. They also used to occupy Lots 1657B and 1657C (see further below). These 3 pieces of land are collectively called the “Property” in the Statement of Claim.

7.  The 1^st Defendant is a cousin of Alberto, and she is the mother of the 2^nd Defendant. The 3^rd Defendant is the husband of the 2^nd Defendant.

8.  Alberto is an indigenous villager of the Village. When he was about 5 or 6 years old, he moved to Panama to join his adoptive father, Yau Ko, who had established a supermarket business there. He returns to the Village occasionally to visit his relatives.

Plaintiff’s pleaded case

9.  It is the Plaintiff’s pleaded case that prior to the Assignment, Alberto informed the Plaintiff that portions of Lot 1657 were illegally occupied by the Defendants. He explained the background as follows:

(1)  The 1^st Defendant previously occupied the Property as a licensee with the consent of Alberto and his predecessors-in-title (the “1^st Licence”);

(2)  The 1^st Defendant gave up possession of the Property in 1997 after she obtained accommodation in Ma On Shan and the 1^st Licence was terminated;

(3)  In or about March 2016, the 2^nd and 3^rd Defendants went to Panama to visit Alberto in his residence. During their visit, the 2^nd and 3^rd Defendants requested Alberto to allow them to use the Property. They further informed Alberto that they wanted to repair the agricultural structure located in the Property, which was in a bad condition[1];

(4)  Alberto then told the 2^nd and 3^rd Defendants that he would permit them to stay at the Property on condition that they must deliver to him vacant possession of the Property immediately upon his demand;

(5)  He also told them that he was going to sell the entire Lot 1657 and therefore they should not spend too much money to repair the agricultural structure and that they should not construct and/or erect any new structures on the Property;

(6)  Upon the 2^nd and 3^rd Defendant’s agreement to the terms stated in subparagraphs (4) and (5) above, Alberto then granted them a bare licence to use the Property (the “2^nd Licence”);

(7)  However, in early April 2016, when Alberto returned to Hong Kong for ancestral worship, he discovered that the 2^nd and 3^rd Defendants had demolished the old agricultural structure on the Property and in place of it there were two new structures which were almost complete. He complained to the 1^st and 2^nd Defendants about the new structures as it was done without his consent and contrary to the terms of the 2^nd Licence;

(8)  From April 2016 to December 2017, Alberto returned to Hong Kong several times to discuss with the 2^nd and 3^rd Defendants about the delivery of vacant possession of the Property. Meanwhile, it was discovered that the Defendants had fenced off the Property;

(9)  By a letter from Alberto’s solicitors dated 2 May 2018, he terminated the 2^nd Licence and demanded the 2^nd and 3^rd Defendants to deliver vacant possession of the Property on or before 9 May 2018;

(10)  On 9 May 2018, the Defendants solicitors replied and stated that the Defendants refused to deliver vacant possession as the 1^st Defendant had acquired the right to stay in the Property in or about 1984.

10.  By a letter dated 6 June 2019, the Plaintiff through its solicitors gave notice to all occupiers of Lot 1657 (as it then was) that they had wrongfully occupied the Property and they were required to vacate within 7 days.

11.  On 12 June 2019, the Defendants through their solicitors stated that they were residing at the Property and claimed to be in adverse possession of the Property.

12.  The Plaintiff claims that it had never given any tenancy, licence or consent to the Defendants or any other persons to enter into and remain on the Property, and therefore the Defendants’ act amounts to trespass.

13.  Although the Plaintiff’s Statement of Claim includes damages to be assessed in its prayer for relief, the Plaintiff has through its counsel, Mr Vincent Lam (leading Mr Kurt Ng), confirmed that it does not pursue any claim for mesne profits.

Defendants’ pleaded case

14.  On 24 March 1984, the 1^st Defendant came to Hong Kong with the 2^nd Defendant and her other daughter, Chung Hing Fong (“Hing Fong”). It is the Defendants’ case that since no later than 1 June 1984, the 1^st Defendant has been in adverse possession of Lot 1657A under the following circumstances:

(1)  In May 1984, with the help of Yau Tin (an uncle of both the 1^st Defendant and Alberto), who was the head of the Village at the time, the 1^st Defendant paid a sum of HK$6,000 to a purported seller to acquire Lot 1657A, which was already fenced off by fences with bricks and metallic barbed wire and there was an agricultural structure (the “House”) built on it. For the transaction, the 1^st Defendant signed a written note (字條) with Yau Tin as the witness (the “Note”), but it was lost during a flood;

(2)  Believing that she had become the rightful owner of Lot 1657A, the 1^st Defendant then started her exclusive use, possession and control of the land by using the same as the residence for her and/or her family members including the 2^nd and 3^rd Defendants, except during 1998 to 2003 when the House was rented out under various oral tenancies to various tenants;

(3)  Fences and gates had been erected around Lot 1657A. In or about 2016, an extra gate (making a total of two) was installed for easier access to and egress from the land;

(4)  Renovations and decorations were done and/or caused by the 1^st Defendant to the House and Lot 1657A, including maintenance of the House, reinforcement of the slope on the land, construction of a toilet (the “Toilet”) on the land separate from the House.

(5)  In about 2016, the 1^st Defendant caused the fences around Lot 1657A to be improved by replacing its material from bricks and metallic barbed wire to concrete. She also caused the gate to the land to be replaced and/or refurbished;

(6)  At all material times since May 1984, the 1^st Defendant has been responsible for paying the utilities of Lot 1657A and her exclusive enjoyment, possession and control of Lot 1657A had never been disturbed until Alberto’s solicitors issued their letter of 2 May 2018.

15.  The Defendants therefore deny the existence of any licence. While they accept that the 2^nd and 3^rd Defendants had met with Alberto in Panama in 2016, their version of event is different. According to the Defendants, they met with Alberto in Panama on 8 February 2016 (as opposed to March 2016) as part of their trip to visit their relatives in the United States and Panama. During their visit, Alberto learned of the 1^st Defendant’s then on-going improvement on Lot 1657A, and he asked the 2^nd and 3^rd Defendants if the Defendants could improve and/or renovate the chicken shed and a small house (both of which were located outside but near Lot 1657A) for him free of charge. Such a request was rejected by the 2^nd and 3^rd Defendants.

16.  The 1^st Defendant counterclaims for adverse possession of Lot 1657A against the Plaintiff under sections 7(2) and/or 38A(1) and 17 of the Limitation Ordinance, Cap 347 (the “LO”), and that the title of the Plaintiff in the land is time-barred and/or extinguished before the commencement of this action.

17.  In respect of Lots 1657B and 1657C, the 2^nd and 3^rd Defendants had put up barriers along the boundaries between Lot 1657B and a brook and between Lot 1657C and the brook from end of 2017 to mid 2021, but no later than the date of service of the writ of this action. They had also placed miscellaneous items on Lot 1657B intermittently from end of 2017 to mid 2021, but no later than the date of service of the writ of this action.

18.  Since then, the Plaintiff has recovered possession of Lots 1657B and 1657C. It remains for the present trial to deal with the Plaintiff’s claim for vacant possession and the 1^st Defendant’s counterclaim for adverse possession of Lot 1657A only.

The LO

19.  Section 7(2) of the LO provides:-

“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…”

20.  By virtue of section 38A(1) of the LO, the time for bringing an action to recover any land which accrued before 1 July 1991 shall, if it has not then already expired, expire at the time when it would have expired apart from the provisions of the Limitation (Amendment) Ordinance 1991. The relevant limitation period was 20 years under section 7(2) of the Limitation Ordinance as enacted in 1965 (“LO 1965”).

21.  Section 17 of the LO provides:-

“Subject to the provisions 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.”

22.  The current form of section 7(2) of the LO came into existence after an amendment to the LO in 1991. The Defendants accept that since their primary case is that the 1^st Defendant’s adverse possession began in or about 1984, the applicable requisite period of possession is 20 years under LO 1965. However, if the court finds that her adverse possession began after 1 July 1991, then the relevant limitation period is 12 years only. This is also the position adopted by the Plaintiff (see paragraph 42 of its closing submissions).

Adverse possession

23.  There is no dispute between the parties as to the principles that are applicable to adverse possession, which are well-established.

24.  In the recent decision of Wong Yuk Lin v Chan Tim Yiu Raymond, unreported, DCCJ 1146/2021, 30 October 2023, DDJ Queenie Lau helpfully summarised the law on adverse possession:

“23. In order for a person to establish adverse possession, that person must be shown to have both factual possession and the requisite intention to possess. See Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd (2007) 10 HKCFAR 588, §7(2).

C.1 Factual possession

24. Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, and an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. In other words, the alleged possessor must exercise exclusive physical control. The question of what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, but the alleged possessor needs to show that he has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no one else has done so. See Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd, §7(3).

25. Not every use or occupation of land can satisfy the requirement of factual possession for the purposes of adverse possession. For example, using the land without excluding others from entering the land is insufficient. However, setting up physical barriers to exclude others from entering the land is a classic way of establishing exclusive occupation. See Gotland Enterprises Ltd v Kwok Chi Yau & Ors, CACV 260/2014, 19 January 2016, §§36-37. Even if there is no locked gate or door, the control of access to the disputed land is generally an unambiguous assertion of control. See Jourdan, Adverse Possession, 2^nd ed, §13-29. In other words, whether other persons have free or unrestricted access to the property can be relevant to the question of whether a person can succeed in establishing adverse possession. See Wu Yim Chung v Lo Wai Ching [2022] HKCA 100, §39.

26. As summarised by Barma JA in Poon Chi Hang v Lai Ho Sun [2019] HKCA 734, §6, ‘The necessary factual possession must be single and conclusive, and it must be exclusive, continuous, open, visible and notorious. It must not be equivocal, occasional, or for a special or temporary purpose.’

27. By way of example, maintaining the relevant property, paying utilities and rates and government rent, and paying insurance cover, are examples of acts which a court may consider to be consistent with someone who had regarded the property as his or her own. See The Incorporated Owners of Kam Luk Building v 吳靜燕 [2020] HKDC 196, §§72-75.

28. On the other hand, the storage of materials at a property in itself would be given little weight when considering the question of whether a person has factual possession of the property. See Jourdan, §13-73. Similarly, whether the person asserting adverse possession has slept in the property in question or not is neither here nor there. The key question remains whether that person has physical control over the property. See Wong Shing Chau v To Kwok Keung, CACV 20/2008, 12 June 2008, §19.

C.2 Discontinuance of the alleged possessor’s factual possession

29. 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 is why the slightest acts done by or on behalf of an owner with the right to possession will be found to negative discontinuance of possession. See Kan Yau Shan & Or v Mo Yiu Mut & Or, §§4.6-4.7. Having said that, mere entry by the paper owner will not suffice to prevent a squatter who is in effective control of the land from being in possession unless the owner takes back actual possession. See Jourdan, §§7-65 to 7-84.

30. By way of example, where a squatter’s possession had only been taken by a fence, when it was pulled down by the owner, nothing remained to make the possession that of the squatter. See Worssam v Vandenbrande (1868) 17 WR 53, 53-54.

31. The alleged possessor’s possession will be discontinued when he is physically excluded from the land, even by his own actions. Further, a squatter who vacates the property and leaves it empty cannot claim nonetheless to be in possession. See Generay Ltd v The Containerised Storage Co Ltd [2005] 2 EGLR 7, §§49, 54.

C.3 Intention to possess

32. Animus possidendi involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the process of the law will allow. See Powell v McFarlane, p 471-472; Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd, §7(4); Gotland Enterprises Ltd v Kwok Chi Yau & Ors, §45.

33. In considering the question of whether a squatter has acquired possession, the courts will require clear and affirmative evidence that the squatter not only had the requisite intention to possess, but also made such intention clear to the world. If the 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 as possible, the courts will treat the squatter as not having had the requisite animus possidendi and consequently as not having dispossessed the owner. See Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd, §7(4).

34. The rationale for requiring a person seeking to dispossess an owner to make his intentions sufficiently clear is because of the drastic results of a change of possession. Thus, there must be sufficient clarity so that an owner, if present at the land, would clearly appreciate that the squatter is not merely a persistent trespasser, but is actually seeking to dispossess him. See Powell v McFarlane (1977) 38 P & CR 452, 480, Gotland Enterprises Ltd v Kwok Chi Yau & Ors, §45.

35. The required intention must be determined objectively. Evidence of the squatter’s past or present declarations as to his or her intention is regarded as self-serving. See Yeung, Abraham v Sun King Kai [2022] HKCFI 1239, §55.”

25.  There can be no question that the person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention. Although the normal civil standard of proof applies, ie on the balance of probabilities, the evidence of exclusive possession and intention must be compelling in order to be commensurate with the serious consequences of finding that the holder of the paper title has been disposed. It cannot be lightly assumed that the paper title holder has foregone his or her interest in land. There is no presumption, whether legal or evidential, of continued possession in favour of a squatter even if adverse possession is established to have commenced: Wong Yuk Lin at §36-37.

26.  Moreover, there can be no adverse possession by a licencee: Cheung Chung Yan v Chan Man Kwong & Ors, unreported, CACV 268/2003, 12 February 2004, per Ma CJHC (as he then was) at §17:

“17. As a matter of law, where a person occupies land as a licensee or otherwise with the permission of the true owner, he is not in adverse possession, for he enjoys his occupation under lawful title…”

27.  However, in order to establish a licence, there must be communication, in writing, by spoken words, or by overt and unequivocal conduct, that was intended to be understood, and was understood, as a permission to do something that would otherwise be an act of trespass: Tsang Woon Ming v Tsan Hing Tat Heidi [2024] 1 HKLRD 316 at §26.

28.  A bare licence can be revoked at any time and after the revocation, the former licencee becomes a trespasser: see §11 of Westlands Estates Limited & Anor v Swilynn (HK) Limited, unreported, HCA 8748 of 1984, 14 February 1985, per DHCJ Barnett:

“But it may well be that because of the 1^st plaintiff's failure to take action immediately the installations appeared, the defendant is acting under the authority of a bare or gratuitous licence. Such a licence may, of course, be revoked at any time and after revocation the licencee, in this case the defendant, becomes a trespasser although he must be allowed a reasonable time in which to leave and to remove his property.”

Credibility and Assessment of Witnesses

29.  In assessing the credibility of a party’s case on a particular issue, the court will take into consideration the following:

(1)  whether a party’s case is inherently plausible or implausible;

(2)  whether a party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;

(3)  where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests;

(4)  the demeanour of the witnesses.

See: Lee Fu Wing v Yan Paul Po Ting [2009] 5 HKLRD 513 per DHCJ Au (as he then was) at §53.

30.  However, it should be borne in mind that oral testimony and demeanour may not be the most reliable guides to credibility. Inherent probability and contemporaneous documents remain as the most reliable indicators of credibility: Gao Haiyan v Keeneye Holdings Ltd, unreported, HCA 1315/2009, 11 August 2016 per To J at §64.

31.  Furthermore, faulty memory and problems in recollection do not necessarily demonstrate that a witness is untruthful; the appropriate approach is to assess the parties’ evidence in terms of inherent probabilities and its consistency with contemporaneous documents when viewed against the surrounding circumstances: Lam Rogerio Sou Fung v Tan Soon Gin George, unreported, HCA 2576/2005, 5 May 2011 per Chu J (as she then was) at §§34-41. I will adopt the above guidelines in accessing the credibility of the parties’ witnesses and their respective case.

Plaintiff’s witnesses

32.  The Plaintiff called 4 witnesses at trial.

Tang Sun Chi

33.  The first was Tang Sun Chi (“Ms Tang”), who was previously the manageress and is now a director of the Plaintiff. Her evidence mainly concerned how the Plaintiff purchased Lot 1657 and what Alberto had told her prior to the transaction. On cross-examination, her evidence was consistent with contemporaneous records and what she had stated in her witness statement. She was forthcoming as a witness, and I accept her evidence as credible.

Lam Chi Keung

34.  The second witness was Lam Chi Keung (林志強) (“Mr CK Lam”), who has been the head of the Village since 1994. Mr CK Lam was the one who introduced a property agent to Alberto for the sale of Lot 1657 in around 2017. I consider Mr CK Lam an independent witness, as apart from the commission which he frankly admitted to have already received for the sale of Lot 1657, he appears to have no interest in the outcome of the trial. In relation to topics of which he had personal knowledge, he gave credible and logical evidence which was also consistent with what he said in the witness statement.

Alberto

35.  The third witness was Alberto, who gave evidence through a Spanish – English interpreter. According to Ms Tang, the Plaintiff’s transaction with Alberto in relation to Lot 1657 had been completed and it had paid the full purchase price to Alberto. Regardless of the outcome of the trial, the Plaintiff would not claim any payment or costs from Alberto. In other words, there appears to be no financial incentive for Alberto to give evidence in favour of the Plaintiff.

36.  Throughout the course of the cross-examination, which lasted more than a day, Alberto stood firm on his evidence. He outright denied questions put to him which were inconsistent with his case. For example, when it was put to him that he had asked the 2^nd and 3^rd Defendants improve or renovate the chicken shed and a small house for free, he firmly denied.

37.  Further, as pointed out by the Plaintiff’s counsel, Alberto also gave logical and credible answers. For example, when he was asked why he did not see fit to reduce the 2^nd Licence into writing whilst he engaged solicitors to draft an agreement for the recovery of Lot 1657A in 2017, he answered that he did not see the need in 2016 for the 2^nd Licence because it was a “family thing”; but it was necessary to draft a written agreement in 2017 because the 2^nd and 3^rd Defendants had breached the 2^nd Licence by building new structures on Lot 1657A and refusing to return vacant possession on demand. I find his explanation credible and reasonable.

38.  I note that Alberto gave some answers in court which were either unclear or inconsistent with a previous answer that he had given. The Defendants’ counsel sought to discredit his evidence during her cross-examination of the witness. However, I observed that the ambiguity or inconsistencies were largely caused by the lengthy questions put to the witness and the difficulty in translating such questions from English to Spanish. Moreover, Alberto explained in the witness box that he was diagnosed with colon cancer last year. He had undergone surgery and sessions of chemotherapy for 3 to 4 months shortly before attending the trial. It is understandable that the cross-examination was exhausting and he was unable to maintain focus after a while, in particular when he was asked to recall matters that occurred many years ago. Overall, I find Alberto an honest witness. Save and except for one matter discussed under Issue 1(3) below, I accept his evidence as credible.

Ho Tsui Man

39.  The fourth witness was Ho Tsui Man (“Ms Ho”). She was the property agent who handled the sale and purchase of Lot 1657 between Alberto and the Plaintiff. Although no substantial issue turns on Ms Ho’s evidence, I accept her as a credible witness.

Defendants’ witnesses

40.  Each of the Defendants gave evidence at trial. There is no question that they are all interested in the outcome of the case.

1^st Defendant

41.  The 1^st Defendant was born in 1945, ie 78 years old at the time of the trial. Despite her age, the 1^st Defendant appeared to be alert and energetic when she was cross-examined.

42.  Central to the 1^st Defendant’s defence and counterclaim is her allegation that she paid $6,000 in 1984 to acquire Lot 1657A and, since then, she has had exclusive possession of the land with a genuine belief that she was the rightful owner of the land. Thus, it was not surprising that the Plaintiff’s counsel spent considerable time questioning the 1^st Defendant on the circumstances under which she allegedly bought the land as well as those under which the Note (being the only alleged evidence of her alleged purchase) was lost in a flood.

43.  In relation to how the Note was lost, the 1^st Defendant’s testimony was, to say the least, confusing, inconsistent and illogical. At first, she could not remember when the incident occurred, but later she said that it was 1984 and refused to accept that her answer changed (我冇講話唔知…頭先未聽清楚). She then told the court that the Note was placed inside a broken drawer and the contents of which (including the Note and some other clothing items) were washed out during the flood. She was then asked whether she saw the Note in the water when the House was flooded. At first, she said she did. Then she was asked why she did not pick it up before she opened the door to let the water out, knowing that it would also flush out the Note, which she accepted as an important document to her. She said she was in a hurry because she had not experienced such serious flooding before and the water level was up to her mid-calves. Subsequently, however, she changed her evidence and said that the water level was only about 3 inches high when she opened the door, and she could not see the Note in the water. She was then questioned why she did not try to search for the Note before she opened the door, knowing that it would be washed away. She said she was getting more and more afraid, despite her evidence that the water was subsiding to only 3 inches high. The Plaintiff submits that her evidence was illogical and convoluted, and it defied common sense. I agree.

44.  The Plaintiff’s counsel further refer to the 1^st Defendant’s evidence that she changed the water meter at Lot 1657A to be registered under her name on 11 May 2018, ie shortly after the Defendants received the demand letter from Alberto’s solicitors dated 2 May 2018 for vacant possession to be delivered on 9 May 2018. The 1^st Defendant did not provide any reason as to why she had to make the change at that particular time. It is suggested that the only plausible reason is that it was calculated to create evidence in support of her case. In the closing submissions, the Plaintiff’s counsel refer to a couple more examples (which are not repeated here) in which the 1^st Defendant changed her evidence on re-examination or after a factual error in her answer was pointed out to her. It was submitted that the 1^st Defendant was tailoring her answers in the witness box to suit her case.

45.  The Defendants’ counsel, Ms Van Ma (“Ms Ma”), submits that cross-examination is not a memory test and the court should take into account the 1^st Defendant’s advanced age and lack of education. I accept that cross-examination is not a memory test and witnesses (especially elderly ones) are not to be criticised when they are unable to recall details of events that took place a long time ago. If a witness cannot remember certain detail, they should frankly say so and that is acceptable. However, it is quite another matter when a witness puts forward a convoluted or inconsistent story, or repeatedly changes his/her answer when an error or illogicality in the answer is pointed out. If that happens not just once, but a few times during a witness’s testimony, as in the case of the 1^st Defendant here, it does give a general impression that the witness is evasive, defensive and his/her evidence is unreliable. Therefore, while I will not go so far as considering the 1^st Defendant a dishonest witness or rejecting her evidence, I will treat her evidence with great caution.

2^nd and 3^rd Defendants

46.  The 2^nd Defendant was mainly asked about her visit in Panama and the use of Lots 1657B and 1657C. There are certain inconsistencies in her oral evidence and some of her answers were different from what was stated in the Amended Defence and Counterclaim.

47.  As for the 3^rd Defendant, he frankly admitted that he was not involved in the subject matter of this case before 2016 and his evidence was also mainly concerned with the visit in Panama and the use of Lots 1657B and 1657C.

48.  Having considered the inherent probability of the matter, I prefer Alberto’s version of event over that of the 2^nd and 3^rd Defendants in relation to the discussion in Panama and I will explain further below.

Discussion

49.  The parties have filed an Agreed List of Issues. At the end of the trial, I raised a number of questions relating to the 1^st Licence and directed the parties to address the court on those questions in their closing submissions. My analysis below will follow the order of the Agreed List of Issues, together with discussions on my additional questions where appropriate.

Issue 1:  Whether the 1^st Defendant was in adverse possession of Lot 1657A for 20 years (before 1 July 1991) or 12 years (after 1 July 1991) prior to the commencement of the present proceedings?

(1)  Whether, since a date no later than 1 June 1984, the 1^st Defendant has been in continuous, exclusive, and uninterrupted possession and control of Lot 1657A, acting as though she were the sole owner, without the consent of any other party?

(2)  Whether the 1^st Defendant occupied Lot 1657A pursuant to the 1^st Licence?

50.  On these two sub-issues, there is no dispute that while the Defendants carry the legal burden of proving sufficient factual possession and intention to possess, the Plaintiff bears the evidential burden of showing the existence of any licence: Tsang Woon Ming (supra) at §25.

1984 – 1992

51.  The Plaintiff’s position is that the 1^st Defendant neither had factual exclusive possession nor the intention to possess whether the requisite period is 20 or 12 years. She occupied Lot 1657A pursuant to the 1^st Licence granted by the Yau Brothers from 1984 to 1992 and subsequently by Alberto from 1992 (when he became the registered owner) until 1997, when the 1^st Defendant allegedly gave up her occupation. The Plaintiff argues that given the 1^st Defendant occupied the land pursuant to a licence, there can be no claim for adverse possession, citing Cheung Chung Yan (supra).

52.  The Defendants deny the existence of any licence. The 1^st Defendant’s evidence is that she had never been informed by anyone, including Yau Tin, that her possession of Lot 1657A in 1984 was under any licence from the registered owners. She further asserts that she was not informed that Yau Tin was a registered owner of the land.

53.  According to the 1^st Defendant, she came to Hong Kong in March 1984 with the 2^nd Defendant and Hing Fong. The three of them first stayed with Yau Chiu, the 1^st Defendant’s adoptive father, but his second wife did not want them to live there and treated them poorly. The 1^st Defendant had a hard time every day and wanted to move out. She was then introduced by Yau Tin to a seller who intended to sell a house. Yau Tin then showed her the location of the house, ie Lot 1657A, which was fenced off with barbed wires, and informed her that the selling price was $6,000. At the end of May 1984, through Yau Tin’s arrangements, the 1^st Defendant met with the seller in the presence of Yau Tin and paid $6,000 to the seller, who then confirmed receipt on a piece of paper, ie the Note. Both the seller and the 1^st Defendant signed the Note. The 1^st Defendant said that there were 3 keys related to Lot 1657A, one each for the metal gate to Lot 1657A, the door of the House, and the kitchen. She replaced the locks and only the 1^st Defendant, the 2^nd Defendant and Hing Fong possessed the new keys.

54.  The Plaintiff urges the court to reject the 1^st Defendant’s evidence concerning the alleged transaction and the Note. Mr Vincent Lam criticises the 1^st Defendant for failing to take immediate action to retrieve the Note during the flood or ask Yau Tin to help her obtain another one from the seller. Ms Ma submits that such criticism is overly harsh and influenced by hindsight. She explains that since the transaction was introduced and witnessed by the village head, whom the 1^st Defendant trusted as her uncle, it was not unreasonable that she did not anticipate any potential problems resulting from the loss of the Note. Furthermore, given the 1^st Defendant’s lack of education, she would not have foreseen legal proceedings taking place years later in which the relevance of the Note would come into play.

55.  As discussed above, I have found the 1^st Defendant’s evidence concerning her alleged loss of the Note convoluted and illogical. I reject her evidence on how she allegedly lost the Note.

56.  However, there is evidence before me suggesting that some form of arrangement concerning the House did take place in around May 1984, and the nature and effect of this arrangement has a significant bearing on the issues in this case.

57.  Such evidence mainly comes from Mr CK Lam, who in 2009 agreed with the 1^st Defendant to “purchase”[2] the House for his wife’s use. According to Mr CK Lam, the 1^st Defendant had abandoned the House for about 13 years. But instead of approaching Alberto (whom he knew to be the registered owner of Lot 1657A at the time), he approached the 1^st Defendant for the purchase “because the transaction only concerned the House, not the land of Lot 1657A”. Below is the relevant part of his evidence in the witness statement:

“8. 在2009年，我太太由中國來到香港。我當時打算購買該農舍[the House]給太太居住，因為我知道該農舍由大約1996年開始被棄用。在我記憶中，當時該農舍十分破舊，該農舍內沒有傢俬，門亦是破爛的，沒有被上鎖，我能夠自由進出該農舍，該農舍需要重新裝修才能居住。我們皆知道該農舍建在游育坤的私人土地上，所以是次交易只涉及該農舍。

9. 我把所需款項港幣$55,000支付給第一被告人，不久後，我得知游育坤計劃出售他的土地。若然地段有新業主，我需要交還該農舍，所以買入該農舍並進行裝修工程便會變得沒有意義，更要承擔金錢損失。再者，我收到第一被告人的來電，她跟我說她害怕游育坤會反對她出售該農舍，因為會令游育坤難以出售他的土地，她更說她不知道如何向游育坤交代她已把該鄰舍出售。因此，我們雙方同意取消交易，她退回全數現金給我，我把雙方已簽署的交易字條交還給她，是次交易猶如從來未有發生。”

58.  During cross-examination, Mr CK Lam gave similar evidence:

“問：…咁如果游育坤要收番笪地，你就知道你買呢間農舍就冇法律效力㗎嘞喎，因為游育坤--即係你就要放棄間屋㗎嘞，個農舍㗎嘞，你知㗎嘛？

答：係。

問：唔，咁又係嘞，如果游育--游--游育坤佢想賣咗佢呢一笪地畀其他嘅新買家，你亦都知道--你亦都唔能夠--即使畀咗55,000鈫游育娣，你都唔能夠管有--繼續管有個農舍，你知㗎？

答：係。

…

問：好，而你當時喺09年就想買呢個農舍，你冇問過游育坤㗎嘛？

答：冇。

問：唔，係咪因為你都認為「買農舍啫」，同游育坤都冇關係，所以你唔認為你需要問佢呀？

答：可以咁講。

問：唔。

答：因為上蓋係娣姐㗎嘛。

問：「娣姐」即係游育娣，係咪？

答：（沒有可聽到的回答）

問：嗱，你亦都喺呢一個第9段，啱啱提及嘅，你就話呢，最終呢去到09年，你哋--即係指你哋收咗錢，你收咗錢，亦都簽咗嗰張字條喇，結果呢都係取消交易嘅，係咪？

答：係。

問：唔，你第9段就有講嗰個原因喇，就話--第一，就因為知道--你自己得知呢游育坤就計劃賣嗰個地喇，如果有新地主--新業主呢，你就要交還農舍喇，就唔想嘥錢去裝修，係咪？覺得好似浪費咗金錢呀。

答：唔。

問：另外你又再話，因為游育娣打電話畀你，就同你講話驚游育坤會反對佢賣個農舍，因為咁會令到游育坤難出售地，咁就佢唔知點樣向游育坤交代，呢個係你嘅講法，所以呢當時兩個人就同意「算嘞，唔交易嘞」，係咪？

答：我嘅講法。

問：你喺證人供詞你嘅講法係咁寫。

答：係佢通知我㗎。

問： 我意思係話呢個係你描述個事件呀，喺你嘅證人供詞。

答：係。”

59.  Thus, even on the Plaintiff’s evidence, the 1^st Defendant must have obtained certain right or benefit over the House such that Mr CK Lam thought it necessary to approach the 1^st Defendant (instead of Alberto) and pay her a sum of money to “purchase” the House for the use of his wife. The question then is: what kind of right or benefit did the 1^st Defendant obtain in 1984?

60.  This intended but later aborted transaction in 2009 is also mentioned in the 1^st Defendant’s witness statement. Her evidence is that she had initially agreed to sell “涉案土地”, ie Lot 1657A (not just the House) to Mr CK Lam for a sum of $55,000. However, she later changed her mind because Lot 1657A was her first property in Hong Kong and it meant a lot of sentimental value to her. She wanted to keep the property for the rest of her life. As a result, she asked Mr CK Lam to cancel the transaction, to which he agreed, and she gave him a full refund.

61.  On behalf of the Defendants, Ms Ma submits that Mr CK Lam’s actions and belief in 2009, together with the 1^st Defendant’s evidence and her long-standing uninterrupted occupation, clearly indicate that the 1^st Defendant’s transaction to purchase the House in 1984 was “aimed at establishing her ownership, exclusive possession, and control over both the [H]ouse and the portion of land it occupies, namely Lot 1657A” (see paragraph 27 of the Defendants’ closing submissions).

62.  I have difficulty understanding this submission. In particular, I do not quite see how the alleged purchase of the House could be aimed at establishing her ownership over the House and Lot 1657A. In any event, I gathered from the 1^st Defendant’s written evidence and oral testimony that her case seems to be that she had purchased not just the House, but also the land now known as Lot 1657A from the purported seller in 1984.

63.  The Plaintiff strongly denies the existence of such a transaction. Its position is that the 1^st Defendant had only obtained from the Yau Brothers the 1^st Licence to occupy Lot 1675A and no transfer of ownership (whether in respect of the House or the land) was involved. The Plaintiff’s fallback position is that even if there was an alleged transaction in 1984, the 1^st Defendant had at most purchased the House and not Lot 1657A.

64.  To start off with, it is common ground that no assignment in respect of Lot 1657 (or any part thereof) is recorded with the Land Registry in 1984. The Yau Brothers remained as registered owners until they assigned the ownership of Lot 1657 to Alberto in 1992. Secondly, the 1^st Defendant’s alleged existence of the Note is only a bare assertion, and there is no documentary evidence of any payment or transfer of ownership in 1984.

65.  The Defendants’ case is essentially that notwithstanding the lack of any documentary record, the 1^st Defendant purchased the House and Lot 1657A from the purported seller and, as such, she has had exclusive possession of the land with a genuine belief that she was the rightful owner of the land.

66.  In my view, the Defendants’ case that she had purchased the House and Lot 1657A is inherently improbable. First, it is the 1^st Defendant’s written evidence that Yau Tin told her that someone would like to sell a house.[3] She gave no explanation as to how the sale of the House would escalate to the sale of Lot 1657A.

67.  Secondly, it is asserted by the 1^st Defendant that after the alleged transaction, Yau Tin confirmed that the entire fenced-off area and the House belonged to her.[4] Yau Tin was one of the registered owners of Lot 1657 at the time. As the village head, he was also aware of which piece of land belonged to which villager.[5] To accept the 1^st Defendant’s evidence would mean that Yau Tin as the village head and a registered owner of the very land had engaged an unnamed and unknown person (bearing in mind that none of the registered owners was a stranger to the 1^st Defendant) to purportedly sell part of his land and he acknowledged the same. This is absurd and wholly unbelievable.

68.  Thirdly, if the Yau Brothers did sell a portion of Lot 1657 to the 1^st Defendant in 1984, why had they not registered the same with the Land Registry while they saw fit to do so for the assignment to Alberto in 1992? No explanation has been proffered by the Defendants. For these reasons, I reject the Defendants’ case that the 1^st Defendant had purchased the House and Lot 1657A in 1984.

69.  Ms Ma argues that Mr CK Lam’s evidence supports the Defendants’ case that the 1^st Defendant at least owned the House. She submits that although Mr CK Lam claims that the 1^st Defendant had abandoned Lot 1657A in 1996, he still believed that the House belonged to the 1^st Defendant and approached her to purchase it. Mr CK Lam did not consult or inquire with Alberto about the proposed purchase because, according to him, it was unrelated to Alberto, though he was well aware that the House was located on Alberto’s land. Moreover, during cross-examination, Mr CK Lam told the court that back in the 1980s, the Village already had a customary practice where houses were dealt with by signing notes between the “buyers” and the “sellers”.[6] It is argued that his evidence is consistent with the Defendants’ case concerning the ownership of the House.

70.  In my view, Mr CK Lam’s evidence must be considered as a whole, and his decision to withdraw from the purchase is particularly telling. In paragraph 9 of his witness statement (see above), he said that shortly after he paid the sum of $55,000 to the 1^st Defendant, he discovered that Alberto had planned to sell the land. If he purchased the House, he would have to deliver possession (交還) of the House when there was a new owner and it would be a waste of money. Mr CK Lam was cross-examined on this issue (see above) and confirmed his evidence. In other words, although Mr CK Lam used the term “purchase” (購買), the proposed transaction was not the type of sale and purchase that we commonly understand. The so-called owner of the House has no ownership in the normal legal sense that it excludes the world at large from possession of the House. Instead, he/she is subject to the demand of the landowner to deliver possession as and when he/she is required to do so. It appears that in practical terms, the position of the so-called owner is not materially different from that of a licensee or tenant having obtained permission from the landowner to occupy the property. Therefore, contrary to Ms Ma’s submission, it seems to me that Mr CK Lam’s evidence in fact supports the Plaintiff’s case that the 1^st Defendant’s occupation of Lot 1657A was subject to a licence.

71.  Based on the above discussion, I reject that Defendants’ case that the 1^st Defendant had purchased Lot 1657A or the House in 1984.

72.  Instead, I find it more likely than not that what the 1^st Defendant had obtained in 1984 was consent or permission from the registered owners, ie the Yau Brothers, to occupy Lot 1657A (possibly together with Lots 1657B and 1657C, which are small strips of land along a brook leading to Lot 1657A). To state the obvious, it is the 1^st Defendant’s evidence that the alleged transaction was arranged by Yau Tin. It was also Yau Tin who gave her the set of keys to Lot 1657A and took her to the Squatter Control Unit to register her and her two daughters as occupiers (more on this below). By these actions, Yau Tin must have knowledge and consent of the 1^st Defendant and her daughters’ occupation of the property. Further, Yau Chiu’s residence was within about 5 minutes of walking distance from Lot 1657A. It is inconceivable that Yau Chiu, with whom the 1^st Defendant stayed before she moved to Lot 1657A, would not have known and agreed to the 1^st Defendant’s occupation of the land.

73.  There is also considerable evidence showing that the 1^st Defendant could not have believed that she was the owner of Lot 1657A or the House. In contrast, she has been aware of her position as only an occupier all along. My finding is based on the following evidence from the 1^st Defendant:

(1)  It is the 1^st Defendant’s written evidence that shortly after she moved into Lot 1657A, Yau Tin told her that it was necessary to register the 1^st Defendant and her two daughters as occupiers (佔用人) at the Squatter Control Unit of the Lands Department. Yau Tin then took her to the office of Squatter Control Unit in Sheung Shui for the registration.[7];

(2)  The 1^st Defendant admitted under cross-examination that when she applied for government-subsidised housing under the Home Ownership Scheme (“HOS”) in 1993, she did not declare any ownership of Lot 1657A or the House. She explained that Lot 1657A was not a flat, and since she did not own a flat (“我無樓”), she did not have to declare any property ownership. Such an excuse is clearly absurd and unreasonable, and ought to be rejected. In the absence of any suggestion that she made any false declaration in the application, her decision not to declare any ownership clearly indicates that she did not consider herself the owner of the House or Lot 1657A;

(3)  After the 1^st Defendant purchased the HOS property in Ma On Shan in 1993, she learned from her solicitors that it was necessary to register the sale and purchase agreement with the Land Registry. But she never thought of asking Yau Tin (when he was still alive) about the lack of any registration for her alleged purchase of Lot 1657A;

(4)  Significantly, in the letter dated 9 May 2018 (“9 May Letter”) issued by the Defendants’ solicitors in reply to a demand letter issued by Alberto’s then solicitors, it was stated that the Defendants would not deliver possession because the 1^st Defendant had acquired “the right to stay” in the area in or about 1984. This letter was referred to in a subsequent letter issued by the Defendants’ solicitors on 12 June 2019 in reply to a demand letter issued by the Plaintiff’s solicitors. In the context of a dispute over land, there is significant difference between ownership and a right to stay, and any reasonable solicitor would be careful with the choice of words when describing the basis of his client’s occupation. If the 1^st Defendant believed that she was the owner of Lot 1657A all along, one would expect her to have given the same instruction to her solicitors and the 9 May Letter would have reflected such a belief. However, the letter did not mention any purchase or ownership of the House or the land. When asked about the discrepancy between what was stated in the 9 May Letter and her alleged belief that she was the owner of Lot 1657A, the 1^st Defendant simply said she could not explain (“唔識解釋”). One can reasonably infer that when she instructed her solicitors in 2018 and later 2019, her case was not that she purchased Lot 1657A from an unnamed buyer as she now alleges, and that her alleged purchase is a recent fabrication to support her counterclaim of adverse possession.

74.  As discussed above, the proposition that the 1^st Defendant had only obtained permission to occupy (as opposed to ownership of) Lot 1657A is also consistent with Mr CK Lam’s evidence that if he had proceeded with the purchase in 2009, he would have to relinquish possession of the House if Alberto succeeded in selling his land. Meanwhile, for the sake of completion, the 1^st Defendant’s assertion that Yau Tin lent her $3,000 and gave her the set of keys for Lot 1657A is not inconsistent with a grant of permission to occupy.

75.  The evidence mentioned in paragraph 73 above is also significant in two other aspects. The first aspect relates to the 1^st Defendant’s intention to possess, which will be discussed under Issue 1(7) below.

76.  The second aspect is that such evidence suggests that the consent to occupy Lot 1657A must have been expressly communicated to the 1^st Defendant by someone, and that person was very likely Yau Tin. In other words, the 1^st Defendant’s evidence supports the existence of an express licence given by Yau Tin as a representative of the Yau Brothers.

(1)  It is the 1^st Defendant’s evidence that it was Yau Tin who told her the necessity to register herself and her two daughters as occupiers and he took her to make the registration;

(2)  The fact that she has all along understood her position as an occupier is clearly demonstrated by her lack of any property disclosure when she applied for government-subsidised housing in 1993, and her instruction to state “the right to stay” (instead of ownership) in the 9 May Letter;

(3)  In all the circumstances it is highly unlikely that the 1^st Defendant would have acted in the way she did if no one has ever told her that she was only an occupier.

77.  In considering this issue, I also take note of the background circumstances. Yau Tin was the village head at the time and, according to the 1^st Defendant, he was responsible for handling property transactions for villagers. Given that the 1^st Defendant had just moved to Hong Kong in 1984 and she was not familiar with the village matters at the time,[8] in all probabilities Yau Tin would have explained to her the details of the arrangement, including who the owners were and what conditions (if any) were attached to the occupation, when he allowed the 1^st Defendant to occupy Lot 1657A.

78.  The existence of an express licence is further corroborated by Alberto’s written evidence that he was told by his adoptive father, Yau Ko, that the Yau Brothers gave consent to the 1^st Defendant to take over the occupation of the House from the then tenant.[9] On cross-examination, he gave further detail that such a licence was given on condition that the 1^st Defendant took care of Lot 1657A and collected money from tenants on other parcels of land to be paid to his grandmother and, after his grandmother passed away, to the community for worshipping ancestors. Although the 1^st Defendant denies the existence of such conditions, I have found Alberto a credible and forthcoming witness and I prefer his evidence. I agree with the Plaintiff’s submission that there must have been some express communication between the Yau Brothers and the 1^st Defendant in relation to the 1^st Defendant’s responsibility under the licence.

79.  In view of the above discussion, I find on the balance of probabilities that the Yau Brothers had granted a licence to the 1^st Defendant to occupy Lot 1657A and such a licence was communicated by words and overt conduct which was intended to be understood, and was understood by the 1^st Defendant, as permission to occupy the land. The “right to stay” that is said to have been acquired by the 1^st Defendant in 1984 is the licence granted by the Yau Brothers to the 1^st Defendant.

1992 – 1997

80.  As regards the situation since 1992, when Alberto became the registered owner of Lot 1657, his written evidence is that he granted permission to the 1^st Defendant to continue to occupy the House on a rent-free basis on condition that she would keep watch and safeguard Lot 1657 for him.[10] On cross-examination, Alberto accepted that he did not inform the 1^st Defendant in writing or verbally that he would continue to allow her to stay on Lot 1657A on the same conditions as his father and uncles had given her. He said in court, “I did not have to say this, this is a continuation of event.”

81.  The Plaintiff relies on the case Tsang Woon Ming (supra) for the argument that in the absence of any express communication, an implied licence can still be found or inferred if the facts and circumstances are capable of giving rise to such a finding or inference.

82.  The facts of Tsang Woon Ming are quite similar to those in the present case as it was also concerned with a family property in the New Territories that went through transfers of ownership. The subject land was first owned by Tsan Yung but was later transferred to a family company (“Yung Hing”). Yung Hing later assigned the land to one Madam Luk, who was the daughter-in-law of Tsan Yung and she simultaneously declared a trust to hold the property for her three children, ie the defendants in that case. The plaintiff who claimed adverse possession in that case was the son of Tsang Tung, a brother of Tsan Yung. The trial judge rejected the plaintiff’s claim and held that their occupation of the land was pursuant to an implied licence granted by Tsan Yung which was continued throughout the years.

83.  The plaintiff appealed and one of the grounds of appeal was that there was no legal basis for implying a licence as there must be overt acts on the part of the registered owners to give rise to an implication by conduct, which was absent in that case. It was argued that a revocable licence would be terminated by law on the conveyancing of the land or death of the licensor, and hence any licence given by Tsan Yung would have been terminated when the land was transferred to Yung Hing and subsequently Madam Luk.

84.  The Court of Appeal dismissed the appeal and rejected the plaintiff’s argument about the lack of legal basis to imply a licence. At §§34-36, Cheung JA held that in the light of the contextual background and the interactions between various individuals over the years, the trial judge was entitled to infer a new licence being granted upon the transfer of title:

“34. Regarding the argument that a revocable licence may be terminated by law on the conveyancing of the land or death of the licensor, in my view, the whole of the circumstances must be looked at. I do not regard the change in 1969 when Tsan Yung sold the Lot together with other properties in Lantau to Yung Hing would in any way affect the permission granted to the plaintiff’s family. Tsan Yung was a director and a shareholder of Yung Hing. The other two directors were his sons Tsan To Wah and Tsan To Piu. The other shareholders consisted of the children of Tsan Yung, his wife, the wife of his son (Madam Luk the wife of Tsan To Wah) and one Tsan Cheung Wing Tao who shared the same address as Tsan Yung’s other son Tsan To Piu. In other words, Yung Hing is a family company of the Tsan Yung clan. In the context of a Chinese family with a history of the eldest brother looking after his younger siblings, it would be most odd that the permission given to the plaintiff’s family would not have continued by Yung Hing. In other words, the inference is that a new licence was granted by Yung Hing to the plaintiff’s family. Likewise, in my view, the assignment by Yung Hing in 1981 of the Lot to Madam Luk would not have affected the permission given to the plaintiff’s family to stay at the Lot. One must again consider the contextual background and the interaction between Madam Luk, who became owner of the Lot in 1981, and the plaintiff’s mother and the plaintiff himself, which the Judge had analysed at [93] of his judgment. Again the inference is that Madam Luk had granted a new licence to the plaintiff’s family. I disagree with any suggestion that Madam Luk would need to tell the plaintiff’s mother and the plaintiff words to the effect that their occupation was with her permission, having considered the history of the matter and the relationship of the parties. This is not a case of a stranger occupying another person’s land. I further disagree with the suggestion that Madam Luk might not even know that she owned the Lot. In my view, she must have knowledge of the Lot bearing in mind the Lot together with other properties were transferred to her and the subsequent resumption and litigation concerning some of these properties. In my view, time did not run in favour of the plaintiff during Madam Luk’s lifetime. At most it began to run after her death in 2014 which is insufficient for the plaintiff to acquire title.

35. Although the Judge did not expressly refer to the above events to be the overt acts or demonstrable circumstances to infer the implied licence granted by Tsan Yung or Yung Hing or Madam Luk as the licensors, considering the tenor of the judgment this must be what he had intended.

36. Further, one could infer from the whole of the circumstances that the communication was by these overt acts which was intended to be understood and was indeed understood by the plaintiff and his parents that their occupation was by way of permission and not otherwise. Further, in so far as may be necessary, a reasonable person would have appreciated that the plaintiff and his family’s occupation of the Lots was with the permission of the land owner beginning with Tsan Yung.” (emphasis added)

85.  G Lam JA agreed that the appeal should be dismissed but he took a slightly different approach to the issue of implied licence. In his Lordship’s view, it was unnecessary to consider whether it was correct to hold that a further licence was given, expressly or implicitly, by Yung Hing to the occupants between 1969 and 1981, for the plaintiff did not begin the occupation that he relied on until 1984, when Madam Luk was the registered owner. The crucial question was whether Madam Luk gave any implied licence to the plaintiff’s family to occupy the lot. On this question, his Lordship held that based on the uncontroversial facts or findings made by the trial judge, there was sufficient basis for the court to find an implied licence granted by Madam Luk to the plaintiff and his mother:

“47. On this question the following uncontroversial facts or findings made by the Judge seem to me to be important. First, the Judge found that Madam Luk was aware of the Lot which she owned (Judgment, [92] and [94]). At the hearing Mr Chain sought to suggest that Madam Luk was ignorant of her ownership of the Lot, but this was not open to him because not only was the point not raised in the grounds of appeal for which leave was given, it was also directly contrary to the plaintiff’s own case (see the plaintiff’s witness statement, at [35]). Indeed, Madam Luk had been engaged (with professional advisers) in negotiations with the Government since around 1997, and in litigation (LDMR 3/2005) since 2005, concerning compensation for land resumed in June 1997 in certain other lots in the same Demarcation District (DD 313) which she held by virtue of the same conveyance in 1981 as that relating to the Lot. Secondly, Madam Luk had not abandoned the Lot (Judgment, [94]). Thirdly, Madam Luk probably knew that the plaintiff’s family had been allowed in the past by her father‑in‑law, Tsan Yung, to live at the Lot (see the 1^st defendant’s witness statement, at [15]). Fourthly, after she became the registered owner, Madam Luk was aware of the occupation of the Lot by the plaintiff’s mother and later the plaintiff. Specifically, she knew that in the 1980s the plaintiff moved back to the Lot to live with his mother (see the plaintiff’s witness statement, at [34]). Fifthly, Madam Luk enjoyed a good relationship with the plaintiff’s mother and also, it appears, with the plaintiff. She had maintained contact through mutual telephone calls in which the plaintiff’s mother would tell her about their life in the Lot and Tai O (Judgment, [93] and [94]). Sixthly, in around 1986 or 1987, Madam Luk herself telephoned the plaintiff at the Lot, knowing that he lived there, and sought his assistance in removing a tree on another lot in Tai O that she owned (Judgment, [93]).

48. By these contacts with the plaintiff and his mother, it seems to me Madam Luk was acknowledging their lawful presence and residence at the Lot, knowing that she owned it. In the circumstances of this case, any suggestion by Madam Luk that she could have, at any time before 2004 without first terminating her permission, brought an action against the plaintiff for mesne profits on the basis he had been trespassing on the Lot, would be quite unmeritorious. I take the view that there is evidence based on which the Judge could find an implied licence granted by Madam Luk to the plaintiff and his mother. There is insufficient basis for this Court to interfere with this finding.”

86.  The Plaintiff in the present case submits that the position of Alberto is similar to that of Madam Luk and it invites this court to follow the approach in Tsang Woon Ming to infer an implied licence from the facts and circumstances of this case.

87.  In response, Ms Ma for the Defendants argues that the Plaintiff is not allowed to pursue a case of implied licence because it is not pleaded in any of its pleadings. To support this argument, she cites Siu Shu Ching & Others v Siu Kwok Cheung & Another [2022] HKCFI 594 at §72, where Recorder William Wong SC stated that an implied licence or consent is not merely a legal consequence, but a material fact that must be specifically pleaded. Ms Ma further points out that the Plaintiff cannot rely on Tsang Woon Ming, where an implied licence was expressly pleaded[11] and it was the central issue of dispute between the parties, whereas implied licence was never part of the Plaintiff’s case before trial and the Defendants have been taken by surprise.

88.  At the end of the closing submissions, I directed the parties to file supplemental submissions to address the question of whether “implied licence” must be specifically pleaded in order for the Plaintiff to rely on it. I have considered the submissions and I have come to the view that the Plaintiff is not debarred from pursuing a case of implied licence in respect of the position between Alberto and the 1^st Defendant. My reasons are as follows.

89.  First, it seems to me that Ms Ma’s reliance on the case of Siu Shu Ching is misplaced. In that case, the court was not dealing with the issue of whether the word “implied” has to be pleaded. As one can see from §§4-5 of the judgment, the crux of the plaintiffs’ case was that they and their predecessors-in-title had granted a gratuitous licence to the 1^st defendant’s late father and stepmother, and it was common ground that the plaintiffs did not grant any licence to the defendants. In other words, no licence has been pleaded as between the plaintiffs and defendants. Therefore, when counsel for the plaintiffs sought to rely on an implied licence vis-à-vis the defendants at trial, the court did not allow him to do so. It was under these circumstances that the learned Recorder stated in §72 of the judgment that implied licence was a material fact that had to be specifically pleaded. As I see it, the case cannot be interpreted as authority for the proposition that the word “implied” must be pleaded before a party, who has already pleaded a licence, can pursue a case of implied licence.

90.  The situation in the present case is different. A licence has been pleaded as between Alberto and his predecessors-in-title vis-à-vis the 1^st Defendant:

“3(b)(ba) The 1^st Defendant previously occupied portions of Lot No. 1657 (ie the Property) as a licensee with the consent of Alberto and his predecessors-in-title (“1^st Licence”). The 1^st Defendant gave up possession of the said portions of Lot No 1657 (ie the Property) in 1997 after she had been granted accommodation in a public housing estate in Hong Kong and the 1^st Licence was terminated.”

91.  One may fairly say that the pleading has much room for improvement. For example, it could have contained more detail concerning when, how and under what the circumstances the 1^st Licence was created. However, it was up to the Defendants to request for further and better particulars, and they did not. In any event, from the use of a singular “1^st Licence” to denote the licence granted by Alberto and his predecessors-in-title, it appears that the Plaintiff’s case is that the consent given was a single licence in fact (since only material facts, not law, have to be pleaded).

92.  Alberto’s Witness Statement provides more clarity. In §18, he states that he as the new registered owner “granted permission for my cousin, the 1^st Defendant, to continue occupy the Agricultural Structure on the portion now known as Lot No 1657A rent-free on condition that she keeps watch and safeguards Lot No 1657 for me (“1^st Licence”)”. It is reasonably clear that the permission granted by Alberto was continuous from the one granted by his predecessors-in-title. This is consistent with Alberto’s oral testimony in court and the case run by the Plaintiff at trial. I am unable to see how the Defendants are taken by surprise. This is certainly not the case where no licence has been pleaded between the parties (as in Siu Shu Ching) or a whole new different licence is said to have been created.

93.  Having considered the family history, contextual background and particular circumstances of this case, I think there is sufficient evidential basis for the court to find an implied licence on the part of Alberto in the form of a continuation of the licence granted by the Yau Brothers.

(1)  There is no dispute that at all material times since the assignment in 1992, Alberto knew that he was the registered owner of Lot 1657, and he knew that the 1^st Defendant’s family was in occupation of Lot 1657A;

(2)  It is also Alberto’s unchallenged evidence that he was told by his father that the Yau Brothers gave consent to the 1^st Defendant to take over the occupation of the House from the then tenant;

(3)  Alberto did not abandon the land. Although he resides in Panama, he returns to Hong Kong from time to time and he would visit his relatives at the Village and check his lands (including Lot 1657 and the House) every time. In this regard, Alberto has shown photos taken with Yau Ko and Yau Chiu at the House sometime in 1996, when the 1^st Defendant was still residing there. There are also photos dated 18 June 1996 taken of the vacant agricultural land (now Lot 1657RP) in front of the House during his visit to the Property when he was visiting the 1^st Defendant in Hong Kong. He explained that he took these photos because he wanted to keep a record of the condition of the Property;

(4)  Although the Defendants try to paint a picture that they never had a close relationship with Alberto and his family, the evidence before the court suggests otherwise.

a.  It is the 1^st Defendant’s evidence that at the suggestion and with the assistance of Yau Ko, her eldest daughter successfully emigrated to Panama to work for Yau Ko’s supermarket business there. Later, her second and fourth daughters also moved to Panama and worked there;

b.  In addition to the photo taken in the House mentioned above, there are photos showing (i) Alberto and his family with the 1^st Defendant and Yau Chiu visiting the family house of the Yau’s clan in Guangzhou; (ii) the 1^st Defendant with Alberto’s mother during the 1^st Defendant’s 60^th birthday celebration in Panama, which Alberto also attended; (iii) the 1^st Defendant’s granddaughter, her eldest daughter and second daughter with Alberto’s wife at the wedding of the 1^st Defendant’s granddaughter in Panama, which Alberto also attended;

c.  Alberto describes his relationship with the 1^st Defendant as “good” up until 2016. During the period from 1992 to 2016, he returned to Hong Kong from time to time and had dim sum and dinners with his relatives including the 1^st Defendant[12];

d.  It is common ground that the 2^nd and 3^rd Defendants visited Alberto’s residence during their trip to Panama in around February 2016.

(5)  What can be revealed from these interactions is that the parties were not as distant as the Defendants say. Instead, they met with each other every now and then and they had maintained an amicable relationship throughout the years;

(6)  Moreover, one can reasonably say that by these contacts with the 1^st Defendant and her family, Alberto was acknowledging their lawful occupation of Lot 1657A, while knowing that he was the registered owner.

94.  It is thus demonstrably clear that Alberto had continued the same licence granted by the Yau Brothers. Adopting the approach in Tsang Woon Ming, an implied licence can be inferred from Alberto’s overt acts, the contextual background, and the interactions between the parties. His overt acts were intended to be understood and was indeed understood by the 1^st Defendant and her family that their occupation was by way of permission and not otherwise. Such an understanding is clearly demonstrated by the 1^st Defendant’s conduct as discussed in paragraph 73(2) – (4) above.

95.  I find, therefore, that since about June 1984, the 1^st Defendant occupied Lot 1657A pursuant to the 1^st Licence granted by the Yau Brothers. Despite the transfer of ownership to Alberto on 16 December 1992, the 1^st Licence was continued as a matter of fact by way of an implied licence granted by Alberto.

(3)  Whether the 1^st Defendant gave up the 1^st Licence and possession of Lot 1657A in 1997?

96.  The Plaintiff’s case is that the 1^st Defendant abandoned Lot 1657A in 1997 and the 1^st Licence was terminated. Alberto testified in court that the 1^st Defendant had called him in 1997 at his land line in Panama and told him that she would abandon the land because she had another apartment.

97.  The Defendants deny. Whilst the 1^st Defendant agrees that she moved out of Lot 1657A in 1997, it is her case that she continued her possession and control of the land by renting out the same to various tenants from 1997 to 2003. It is argued that the telephone call mentioned by Alberto was a fabrication as it was not mentioned in his witness statement at all.

98.  There is no dispute that if a squatter gives up possession before the expiry of limitation period, time will stop running against the landowner: Jourdan, Adverse Possession, 2^nd ed, §20-53. On the other hand, when a squatter grants a tenancy and receives rent, he is acting inconsistently with the title of the paper owner, and that puts the squatter in adverse possession of the land through his tenant: Tang Tak Hong v Cheung Yat Fuk (2004) 7 HKCFAR 70 at §19.

99.  On the Plaintiff’s side, in addition to the telephone call between Alberto and the 1^st Defendant mentioned above, Alberto also told the court that as far as he understood, the entire area Lot 1657A was “empty” (or vacant) during the period from 1997 to 2016. Such an understanding is based on his visits to the Village during this period as well as information supplied by his relatives. When he was asked if he knew that the 1^st Defendant had rented the property to various persons, Alberto said he did not know.

100.  Meanwhile, Mr CK Lam gave the evidence that the 1^st Defendant ceased to live in the House since around 1996. Under cross-examination, he said that he did not know whether the House was rented out between 1997 and 2003, whether someone had been residing in the House after 1997 or whether the 1^st Defendant and Hing Fong would visit the House two to three times per month (and occasionally staying overnight) after 2003.

101.  The 1^st Defendant says that during the period from 1997 to 2003, she had three tenants. The first was a Mrs Tse, who was a friend of her daughter. They entered into a written tenancy agreement for a term of two years, but the agreement had been lost. The second was a middle-aged woman introduced by the 1^st Defendant’s uncle (姨丈) who only rented the property for a few months. The third tenant was a middle-aged man introduced by the 1^st Defendant’s colleague and they entered into a tenancy agreement orally with a term of one to two years. The monthly rental was $2,000 per month for the three tenancies. The Defendants neither called any of the tenants to give evidence, nor did they produce any documentary evidence for the receipt of rental payments.

102.  The Defendants have filed a survey report dated 7 October 2022 (“Survey Report”), which was prepared by Mr CK Lau of CK Lau Surveyors Limited on the location and boundaries of Lot 1657A and the period of existence of the physical structures allegedly erected by the Defendants on the land since 1984 up to the present with aerial photos. Pursuant to the Order of DDJ Alan Ng on 6 March 2024, the Survey Report is admissible as evidence without calling the expert to testify at trial.

103.  For the period in 1997 to 2002, Mr CK Lau made the following finding:

“Vegetation again grew on the southern boundary of the Lot, so the features underneath could not be seen. Some subjects were captured at the eastern tip of the Lot in the 1998 and 2000 photos. The [House] remained similar in this period, except the blue covering found in 1994 and 1996 was again imaged in the 1997 and 1999 photos. Other areas remained similar to the previous period.”

104.  If one studies the relevant aerial photos in this period, one can see that in October 1997, the vegetation on the lower portion of the lot was so dense that it covered the courtyard between the House and the Toilet. The vegetation in May 1998 was reduced and one could again see the courtyard and the top of the Toilet. In August 2000, there appears to be a similar reduction in vegetation on the lot compared to what it was in February 1999. However, it is impossible to tell from these photos who was responsible for clearing the vegetation at the time. It is also unclear if the vegetation was part of the trees overgrown from the adjacent government land on the south-western side of the lot and they were trimmed from time to time by the government. Moreover, according to Alberto, at the time his cousin (Yau Keng Seng) and subsequently his cousin’s wife helped him manage his land in the Village and Lot 1657A had been under the care of Alberto’s relatives after 1997 when the 1^st Defendant allegedly left the place. Therefore, the reductions in vegetation could have been caused by people other than the Defendants.

105.  The electricity bills and water bills issued to the 1^st Defendant for the supply address at 70 Ying Pun Village (presumably the address of Lot 1657A) seem to shed more light on this issue. In particular, the electricity bill issued for the period 14 August 2003 to 15 October 2003 contains a bar chart showing consistent electricity consumption from October 2001 to August 2003. Likewise, the water bills issued to the 1^st Defendant show water consumption in September 1999, May 2000, September 2000, January 2001, and June 2001 to January 2003. In view of these contemporaneous records, it seems to me that the Defendants’ case is more credible and it is more probable than not that the 1^st Defendant did not abandon Lot 1657A between 1997 and 2003.

106.  However, whether this would render her a squatter in adverse possession of the land depends on whether the 1^st Licence had been terminated, for as long as the 1^st Licence was still subsisting, the 1^st Defendant was a licensee and her tenants were sub-licensees only, and there would be no exclusive control or possession on the part of the 1^st Defendant. Since I have found, on a balance of probabilities, that the 1^st Defendant did not abandon Lot 1657A, it seems to me inherently unlikely that she had called Alberto and informed him that she would abandon the place. This is also consistent with the Defendants’ case that she had never called Alberto for that matter. In these circumstances, what can be reasonably deduced is that the 1^st Licence was not terminated in 1997. The 1^st Defendant’s occupation of the lot through her tenants continued to be under the 1^st Licence and time did not start to run against Alberto.

(4)  Whether the 1^st Defendant had exclusive possession of Lot 1657A from 2003 to 2016?

107.  The Plaintiff’s case is that the 1^st Defendant continued to abandon Lot 1657A during this period. Mr CK Lam recalls that when he visited the House prior to his intended purchase in 2009, it was very dilapidated at the time. There was no furniture inside, the door was broken and unlocked, and he was able to freely enter the House.[13] In re-examination, he gave more detail that when he went inside the House, it was unoccupied and messy, and the wooden boards were so old that they already curled up. The door to the House was closed but anyone could open it. Coincidentally, this is consistent with the Defendants’ own evidence by around 2009, the House had become dilapidated with broken electricity wires and water pipes.[14]

108.  The Defendants’ case is that the 1^st Defendant was unable to find any tenants since around 2003 when Hong Kong was hit by the SARS pandemic. Although she did not reside at Lot 1657A, she had continuous and exclusive possession of the keys, and she kept the doors and gate of Lot 1657A locked. During this period between 2003 to 2016, she visited Lot 1657A two to three times each month as her holiday, occasionally staying overnight. During her stays, she would clean the place, perform pest control, remove weeds, and apply sulphur to prevent snakes. Hing Fong had accompanied her from time to time.[15] In court, the 1^st Defendant explained that it was necessary to clear the weeds from time to time, or the place would be infested with snakes which would be very dangerous. It is argued that through such activities, the 1^st Defendant continued to have physical control and intention to possess the land: Chan Chi Ming v Brilliant Rise Container Depot Ltd, unreported, HCA 1110/2003, 7 May 2007 at §§42-43.

109.  The Defendants further rely on the Expert Report, electricity bills as well as water bills / letters from the Water Supplies Department (“WSD”) to support their case.

110.  The Expert Report has the following description for 2003 – 2008:

“Vegetation on the eastern and southern edges were reduced, so the linear features and [the House] captured in the 1996 photo could be observed. With the linear features along the eastern and southern edges of the Lot, the [House] and the courtyard were enclosed. The [House] in the Lot remained similar to the previous period.”

111.  The aerial photos taken during this period show that there was reduction in vegetation along the eastern and southern edges of Lot 1657A on a couple of occasions. However, it appears that the relevant vegetation could be trees growing from the adjacent government land and Lot 1657RP, which had nothing to do with the Defendants. The suggestion that Lot 1657A remained enclosed is neither here nor there, as there is no dispute that the gate and barbed wires were present at all material times.

112.  For the period from 2009 to 2015, the following finding is recorded in the Expert Report:

“Vegetation again covered the southern boundary of the Lot, so the features underneath could not be seen. The courtyard had also been covered with vegetation since 2012. The [House] in the Lot remained similar to the previous period.”

113.  The aerial photos taken in this period not only show that the vegetation from the southern edge had grown to cover the boundary of Lot 1657A, but they also show that substantial vegetation was covering the courtyard between the House and the Toilet, suggesting that no one was living at the House.

114.  As regards the electricity bills, they show that from mid-August 2003 to at least April 2009, there was no electricity consumption at Lot 1657A. As for the period from 2010 to 2015, the 1^st Defendant admitted in court that there was no electricity usage and hence no bill was received. The next electricity bill that the Defendants produced was in 2016.

115.  The Defendants have produced a water bill dated 6 October 2004 which contains a bar chart purporting to show that water was consumed from September 2002 to September 2004. However, it is clear from the chart that the three readings for January, May and September 2004 were estimates only. The subsequent water bill dated 19 November 2004 shows that no water was in fact consumed after September 2003 up to the date of the bill and a sum of $224 was credited to the account as overpayment. No other water bill has been produced for this period.

116.  The above electricity and water consumption records are inconsistent with the 1^st Defendant’s testimony that she would stay at the House overnight from time to time, and that she would use small electric appliances such as lamps and fans during her stays at the House. In contrast, the records are in line with Mr CK Lam’s opinion that no one was living at the House when he visited the property in 2009.

117.  Ms Ma submits that, in view of the 1^st Defendant’s age, it is reasonable for her to visit the property during the day when fewer or no electrical appliances were needed. However, this was only a speculation not supported by any evidence, and it does not explain why no water appears to have been consumed from September 2003 onwards.

118.  The Defendants also rely on two letters from WSD informing the 1^st Defendant that its staff were unable to take readings of the water meter for Lot 1657A on various days in 2007, the reason being that “the passageway was locked” (通道上鎖). They submit that these letters show that Lot 1657A was still enclosed and locked in 2007. However, as pointed out by the Plaintiff’s counsel, there is no evidence on the location of the metre or the passageway. It is also unclear who was responsible for locking the passageway. Therefore, I do not think the letters assist the Defendants’ case.

119.  During cross-examination, Mr CK Lam gave certain answers which the Defendants seek to interpret as accepting that the 1^st Defendant had continued to occupy the House in 2009 and that was why he had to approach the 1^st Defendant for the intended purchase. However, he clarified in re-examination that the 1^st Defendant only occupied the House from 1980s to around 1996 and since the 1^st Defendant used to live there, he thought he should approach her for the transaction. Therefore, I do not take his evidence as admitting that the 1^st Defendant’s occupation continued all the way till 2009.

120.  Moreover, for the sake of completeness, I do not think that in accepting the sum of $55,000 from Mr CK Lam, the 1^st Defendant was acting as if she was the exclusive owner of the land trying to sell her property. If one must categorise the intended transaction in 2009, it seems to me that it was more akin to an assignment of a licence with no effect on ownership, as it is Mr CK Lam’s evidence that he would have to deliver possession of the House if Alberto succeeded in selling the land. This is also compatible with his emphasis in cross-examination that the intended transaction was more accurately a “頂讓”, which is commonly understood in the property context as a transfer of a lease or a business which usually does not affect the underlying ownership of a property.

121.  In considering the present issue, I have borne in mind the principle that evidence of exclusive possession (if any) must be compelling and there is no presumption, whether legal or evidential, of continued possession in favour of a squatter even if adverse possession is established to have commenced: Wong Yuk Lin (supra) at §36-37. Having considered all the relevant evidence before me, I do not think the Defendants have discharged their burden of proof that the 1^st Defendant had exclusive possession of Lot 1657A from 2003 to 2016. Instead, I find it more likely than not that during this period, the 1^st Defendant ceased to occupy the House.

122.  In any event, if I am wrong in the above finding and the 1^st Defendant had continued to occupy Lot 1657A during this period, her occupation would have been under the 1^st Licence, as there is nothing to suggest any change in the status quo as between Alberto and the 1^st Defendant in relation to the 1^st Licence.

(5)  Whether the 2^nd and 3^rd Defendants occupied Lot 1657A pursuant to the 2^nd Licence or licence granted by the 1^st Defendant?

123.  The Plaintiff accepts that the 2^nd and 3^rd Defendants have been in occupation of the land since about 2016 but its case is that it was pursuant to the 2^nd Licence granted by Alberto until it was terminated in May 2018.

124.  The Defendants deny the existence of the 2^nd Licence. Their case is that the 3^rd Defendant had a stroke on or about 2 March 2010 and at that time he and the 2^nd Defendant were living on the second floor in a village house in Tai Po, which was very inconvenient to the 3^rd Defendant. It was decided that it would be more beneficial to the 3^rd Defendant’s health if they moved to Lot 1657A as the air would be fresher and there were no stairs at the House. As for the meeting in Panama, their position is that it did not involve any granting of licence by Alberto. Instead, Alberto asked them to help renovate the chicken shed on the adjacent land and if they agreed, he would let them raise chickens there. The 2^nd and 3^rd Defendants refused and they occupied Lot 1657A under a licence granted by the 1^st Defendant.

125.  The current issue therefore largely turns on the factual determination on what happened at the meeting in Panama. In my view, Alberto’s evidence is more credible and inherently plausible compared to that of the Defendants. There is no challenge to the Plaintiff’s evidence (from Mr CK Lam and Alberto) that Alberto had been planning to sell his lands in the Village for some years before 2016. As it turned out he successfully sold his lands to the Plaintiff in 2018. What Alberto said in respect of the existence of the 2^nd Licence and the conditions thereof is entirely reasonable, logical and consistent with factual background and the course of events that took place afterwards. By comparison, the Defendants’ version that Alberto had requested them to renovate the chicken shed is incredible and illogical. There is no plausible reason why Alberto would wish to renovate the structure and let them raise chickens there when he was already trying to sell the land.[16]

126.  The Defendants argue that the 2^nd and 3^rd Defendants’ occupation was not subject to the 2^nd Licence because they already engaged contractors to build the new structures a few months before they met with Alberto. In my view, it is neither here nor there. Moreover, if the Defendants’ case is correct in that the 2^nd and 3^rd Defendants’ occupation of Lot 1657A was to benefit the 3^rd Defendant’s health, one would expect them to have moved into the property in or shortly after mid-March 2010, when he already made a full recovery from the stroke (save for his left fingers) as stated in the medical records. The 1^st Defendant was unable to explain why they had to wait 5 to 6 years to carry out the renovation.

127.  In conclusion, I find that the Plaintiff’s case in respect of this issue is more believable, and the 2^nd and 3^rd Defendants occupied Lot 1657A pursuant to the 2^nd Licence granted by Alberto.

(6)  Whether the 1^st Defendant maintained continuous and exclusive factual possession of Lot 1657A, or any part thereof, for 20 years (before 1 July 1991) or for 12 years (after 1 July 1991) prior to the commencement of the present proceedings?

128.  In the light of the discussion above, the Defendants have failed to discharge the burden of proving that the 1^st Defendant had maintained continuous and exclusive factual possession of Lot 1657A or any part thereof whether for a period of 20 years or 12 years prior to the commencement of these proceedings. I find that at all material times, the 1^st Defendant’s occupation of the land was subject to the 1^st Licence granted by the Yau Brothers which was continued by Alberto, and the 2^nd and 3^rd Defendant’s occupation of the land was subject to the 2^nd Licence granted by Alberto until it was terminated in May 2018.

(7)  Further to Issue 1(6), whether the 1^st Defendant possessed the requisite animus possidendi for Lot 1657A, or any part thereof, for 20 years (before 1 July 1991) or for 12 years (after 1 July 1997) prior to the commencement of the present proceedings?

129.  In assessing an occupier’s statements as to his intention, the general approach of the court is to treat self-serving ones with skepticism but accord considerable weight to those made against one’s interest: Wong Tak Yue v Kung Kwok Wai David & Another (No 2) 1 HKCFAR 55 at 69A-C per Li CJ. Out of court statements to third parties have been used to determine that the squatter had no intention to possess: Jin Yu Chia v The Personal Representative of Lee Ah Hsin, Deceased, unreported, CACV 111/2017, 13 December 2018, per Cheung JA at §§4.4-4.6.

130.  The requisite intention and adverse possession can be established by someone who mistakenly believed himself to be the true owner: Adverse Possession (supra) §9-38. The 1^st Defendant maintains that she all along believed that she was the owner of Lot 1657A until she received the letter from Alberto’s solicitors dated 2 May 2018.

131.  Thus, if the 1^st Defendant genuinely believed that she was the rightful owner of Lot 1657A, her case with respect to the requisite intention would not be defeated if she had continuous possession of the property on the basis of such belief. However, her self-serving statements must be treated with skepticism and the circumstances under which they were made should be scrutinised. Having critically reviewed her evidence concerning the transaction that took place in 1984, I have rejected her case that she had purchased Lot 1657A or the House from an unknown seller (see paragraphs 64 to 71 above).

132.  Furthermore, by reason of the matters mentioned in paragraph 73 above, I have also found that the 1^st Defendant could not have believed that she was the owner of Lot 1657A or the House. Instead, they show that the 1^st Defendant has understood her position as a licensed occupier all along. Those statements made by the 1^st Defendant were against her interest and considerable weight should be accorded to them.

133.  The Defendants argue that the Plaintiff’s reliance on “the right to stay” statement in the 9 May Letter is illogical. It is said that the 1^st Defendant was unable to read or understand English, and it was unlikely that she was aware of the true meaning of “right to stay”. It is also said that she only became aware that Alberto was the registered owner of Lot 1657A when his legal representative explicitly stated so in their letter, and it was not unreasonable to assume that in responding to Alberto’s demand letter, more neutral terminology such as “right to stay” was chosen to be used.

134.  I am unable to accept these arguments. First, they are pure speculations and not supported by any evidence. In fact, the 1^st Defendant was specifically asked about this phrase in cross-examination and she was unable to provide any explanation. Second, absent any allegation of professional negligence, it is a solicitor’s normal practice to obtain his client’s instructions and confirmation before a letter is sent out. There is currently no room to suggest that the choice of using the phrase was anything other than a considered one based on the Defendants’ instructions. Third, I am unable to see the logic of using more neutral terminology when it was allegedly discovered that Alberto was the registered owner. If the 1^st Defendant truly believed that she was the rightful owner, she would have immediately protested and announced her ownership of the land when the registered owner was demanding vacant possession of the property via an open letter. Therefore, I must reject the Defendants’ arguments. In my view, the 9 May Letter was the first formal response from the Defendants, acting on legal advice, in respect of their occupation of the land. The phrase is no doubt contrary to the 1^st Defendant’s position as the alleged adverse possessor and due weight must be given to it. It is reasonable to say that since 1984 when “the right to stay” was allegedly acquired up the date of the letter in 2018, the 1^st Defendant did not have the requisite intention to possess of Lot 1657A.

135.  In addition to the 9 May Letter, the Plaintiff has relied on the evidence of Mr CK Lam in relation to the 1^st Defendant’s reason for aborting the transaction in 2009, ie she was afraid that Alberto would object to the sale of the House as it would make his sale of Lot 1657 more difficult and she would not know how to explain to Alberto.[17] The Plaintiff argues that the 1^st Defendant clearly acknowledged Alberto’s title to the property, which is inconsistent with any intention to possess to the exclusion of the whole world including Alberto. The Plaintiff also refers to the 1^st Defendant’s admission in court that she would have paid rent for Lot 1657A if Yau Tin had asked her to do so. It has been held that willingness to pay rent and offer to pay rent would negate any animus possidendi: Wong Tak Yue (supra) at 68E-69G. The Plaintiff argues that 1^st Defendant’s answer means that she did not intend to exclude the owners but she was treating herself as enjoying possession under a lawful title from the owners.

136.  In response to these arguments, the Defendants urge the court to prefer the 1^st Defendant’s version of her reason for aborting the transaction in 2009. It is also argued that the 1^st Defendant’s answer in respect of her willingness to pay rent was given out of her trust and respect of Yau Tin and it should not negate her intention to possess.

137.  In my view, the 1^st Defendant’s answer on her willingness to pay rent could be subject to different interpretations. While the one advanced by the Defendants is possible on the particular facts of this case, the Plaintiff’s interpretation is in line with the authorities. As between the evidence of Mr CK Lam versus that of the 1^st Defendant on the latter’s reason to abort the 2009 transaction, I prefer that of Mr CK Lam as he is a more reliable witness and his evidence is more compatible with the factual background and the other findings I have made above (eg that Alberto had been trying to sell his lands in the Village and the 1^st Defendant’s occupation had been subject to a licence). Although these matters are not, on their own, determinative of the present issue, I have found them supportive of and consistent with an overall finding that the 1^st Defendant did not have the requisite intention to possess Lot 1657A, and so I find. On this basis alone, the 1^st Defendant’s case for adverse possession must fail.

Issue 2:  Whether the 1^st, 2^nd and/or 3^rd Defendants were and/or are in trespass of Lot 1657A or any part thereof?

138.  The Defendants have been in trespass of Lot 1657A since 2 May 2018, when the 2^nd Licence was terminated by Alberto.

Issue 3:  What is the appropriate relief?

139.  The appropriate relief is that the Defendants shall forthwith deliver vacant possession of Lot 1657A to the Plaintiff.

Conclusion and disposition

140.  I conclude that the Defendants have failed to prove, on the balance of probabilities, that the 1^st Defendant has had factual possession of Lot 1657A with a sufficient degree of exclusive physical control whether for a period of 12 years or 20 years prior to the commencement of these proceedings. I also find that the 1^st Defendant did not have the requisite intention to possess Lot 1657A to the exclusion of the world at large whether for a period of 12 years or 20 years.

141.  The Defendants’ counterclaim for adverse possession is therefore dismissed. The Plaintiff is entitled to recover vacant possession of Lot 1657A forthwith.

142.  There be an order nisi that the Defendants should pay the Plaintiff’s costs of these proceedings, with certificate for one counsel, to be taxed if not agreed. This order nisi shall become absolute unless an application to vary is made within 14 days from the date of this judgment.

143.  It remains for me to thank counsel for their helpful assistance rendered to the court.