WONG KAR SUE AND OTHERS v. SUN HUNG KAI PROPERTIES LTD AND ANOTHER

HCMP1326/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.1326 OF 2005

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REASONS  FOR  JUDGMENT

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1. This Originating Summons relates to the title to a property at Flat C on the 27^th floor of the Kam Tao Building in North Point.  The 1^st defendant is the registered owner.  The plaintiffs claim a possessory title by adverse possession.  The 1^st defendant indicated that it would not oppose the application, and it was agreed that there would be no order as to costs.  Substituted service on the 2^nd defendant has been executed but the 2^nd defendant has taken no part in the action.  I have given judgment in favour of the plaintiffs.  I now give reasons.

The legal title

2. As appears from the land search, Kay Chak Development Co.  Ltd became the registered owner of the property by two assignments, of one third and two third shares, dated 4 June 1971.  The company was wound up on 1 May 1975.  There was a confirmatory assignment of the one third share dated 6 November 1980 and on 31 December 1993 the Property was assigned to the 1^st defendant by an assignment with Memorial No.UB2526377, and registered on 26 January 1984.

The possessory title

3. By a sale and purchase agreement dated 7 December 1972, Kay Chak Development Co. Ltd agreed to sell the Property to one Ng Ngan Wor.  It appears that completion never took place but the effect of the agreement was to give beneficial ownership of the Property to Ng Ngan Wor.  She died in 1973, and in 1979 her son signed a Chinese “property transfer deed” to sell the Property to Ngo Sau Tak for $400,000.  The son had not taken out any Probate or Letters of Administration of his mother’s estate, so he could not pass on her beneficial interest by this deed. 

4. Ngo Sau Tak, who died in 1983, was the wife of Whang E Wun, and the mother of the plaintiffs, who are the latter’s executors.  After she bought the Property, she let it to Whang’s elder sister for a short period, and then to that lady’s son, Chan Hoi Shu, who remains in possession, paying rent of $5,500 per month. 

5. Whang E Wun died in September 2000.  There was, apparently, some dispute when Chan failed to pay rent, and later himself claimed adverse possession against the executors, but Chan later paid the outstanding rent and abandoned that claim. 

6. Ngo Sau Tak was a squatter, although she mistakenly believed that she was the owner of the Property.  Her belief does not affect her position.  In Hughes v. Cork, unreported,14 February 1994, CA (Civil Division), the English Court of Appeal held that a person can still acquire title by adverse possession even though he believes himself to be the true owner.  See also Wong Luen Chun v. Secretary for Justice[1998] 4 HKC 122 at page l29C-I.

7. Neither Ngo, nor after her Whang, nor the latter’s executors are or have been in possession of the Property, which has been leased to Chan.  This, however, presents no problem.  In Bruton v. London & Quadrant Housing Trust [2000] 1 AC 406 it was held that a lease or tenancy can be created between a landlord and a tenant even though the landlord has no proprietary interest or title in the property let.  In Cheung Yak Fuk v. Tang Tak Hong (2004) 7 HKCFAR 70 the Court of Final Appeal confirmed that a squatter can be in adverse possession of land through his tenant by the receipt of rent.  Further there is no difficulty in aggregating the period of possession between the purported landlords; see the passage in the judgment of Bokhary PJ in Cheung Yak Fuk at page 73F-H. 

8. I am satisfied therefore that adverse possession has been established from 1979 to date.

Limitation

9. The relevant limitation period under section 7(2) of the Limitation Ordinance is 20 years where the period begins to run before 1991.  By section 17 of the same Ordinance, the titles of the defendants to the Property are therefore extinguished. 

Result

10. It follows that the plaintiffs are entitled to judgment as applied for in the Originating Summons.