FUNG YUK LUEN v. WONG FUNG LAN

DCCJ 447/2017

[2021] HKDC 487

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 447 OF 2017

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BETWEEN

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JUDGMENT

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1.  This is an adverse possession claim.

2.  The parties are relatives living in Shui Hau Village in Lantau Island. The plaintiff is the registered owner of Lot No. 372 (“Lot 372”) in Demarcation District 326 (“DD 326”). The plaintiff is claiming adverse possession of two lots of land on either side of Lot No. 372, namely the Remaining Portion of Lot 365 (“Lot 365RP”) and Lot No. 371 (“Lot 371”) of DD 326. The defendants are registered owners as tenants in common of Lot 365RP and Lot 371.

The plaintiff’s case

3.  The plaintiff claims that he built a house on Lot 372 around 1980 and has put up a fence (with gates) around an area which encompassed Lot 372, Lot 365RP and Lot 371 and has been occupying these lots since without ever obtaining permission or license from the defendants or their predecessors-in-title.

The defendants’ case

4.  The defendants’ case is that in 1994, their predecessor-in-title, Fung Wing Fuk (“Fuk”, the deceased husband of the 1^st defendant and father of 2^nd, 3^rd and 4^th defendants) gave an oral permission for the plaintiff to borrow and use Lot 365RP and Lot 371 on the condition that the plaintiff should return the lots on request.

5.  There has been on-going negotiation conducted with the plaintiff and later via the plaintiff’s children (acting on behalf of the plaintiff) since around 2012 for payment of rent and later, for sale or land swap. A survey of the land was conducted around March 2016 but the negotiation failed. The license was revoked but the plaintiff has failed to return the lots.

Legal principles

6.  The legal principles are well settled: the trespasser has the onus of proof and to adduce evidence, which must be compelling and sufficient, on a balance of probabilities, to establish that he had both factual possession and the requisite intention to possess (animus possidendi) for over 20 years prior to commencement of the proceedings.

7.  Of course, the defendant would have an evidential burden to establish their positive case (e.g. regarding the alleged oral agreement in 1994 etc.) but the plaintiff would still nevertheless carry the legal burden to satisfy the above 2 criteria irrespective of the defendant’s positive case.

Factual possession

8.  Firstly, although the plaintiff stated in the Amended Writ and the Statement of Claim that he was seeking a declaration of having in adverse possession of Lot 365RP and Lot 371, it was clear from the single joint expert report that a small area of Lot 365RP and another of Lot 371 were outside the plaintiff’s fence (page 115 of the Trial bundle). The plaintiff has clarified his position that he was not seeking adverse possession of these areas which were outside the fence and the court has allowed his application to amend the pleadings accordingly.

9.  The single joint expert surveyor found that the Survey Sheet dated November 1983 (being the closest date after the alleged occupation of the land by the plaintiff in 1980) showed that all three lots were “fully enclosed by fences” and that “the fenced-off area was slightly bigger than the Occupied Land at the northeast” (page 99 of the Trial Bundle).

10.  The fence (and gates) were recorded in a similar way in the Survey Sheets up to the last year in the report (19 November 2018) with the exception of some realignment of fence and gate in Lot 371 in May 2007.

11.  From various aerial photographs over the years, the expert also saw “linear features forming the shape of the fenced-off area” in various areas. The expert confirmed in the supplementary report that when reporting on aerial photographs, he would only state that it was a fence only when he could see features to confirm this, otherwise he would use a neutral term “linear feature”.

12.  Nevertheless, as such “linear features” corresponded to the fences on the Survey Sheets, the court would accept, on balance of probability, that these “linear features” also support the existence of such a fence.

13.  I also note that the expert stated that the “whole” of these lots were enclosed and did not mention the small areas outside the fence (mentioned in paragraph 8 above). But it is obvious from the survey map in the joint expert report (page 115 of the Trial Bundle) that these are small and rather insignificant areas.

14.  Such would serve as strong evidence to show that the plaintiff did have factual possession of the lots since around 1980 as alleged.  

Animus possidendi

15.  The plaintiff, in paragraph 22 of his witness statement (page 42 of the Trial Bundle), claimed that (as I translate):

“In fact, from the time I moved into the house at Lot 372 and started to use the lots until now, I all along considered the land to belong to me. I have never asked nor required to ask anyone’s consent to use those lands. No one has ever question whatever I did on those land, and I have never paid any rent to anyone.”

16.  In court, the plaintiff gave evidence that after he became the owner of Lot 372 in 1978, he had applied to the Lands Department for permission to build the house. That was when he was aware that he was not the owner of Lot 365RP and Lot 371. This, of course, explained why the plaintiff’s house sat right within the boundary of Lot 372.

17.  As such, the plaintiff’s case is that he was fully aware that Lot 365RP and Lot 372 did not belong to him even before he built his house, but when he moved in to the house around 1980, he started to occupy those lots and had considered those as belonging to him since then.

The 1994 oral agreement

18.  As to the 1994 oral agreement as alleged by the defendants, there is no documentary evidence so this is a pure “he says she says” scenario.

19.  The evidence came from the 1^st defendant. She stated in paragraphs 12 to 17 of her witness statement (page 51-52 of the Trial Bundle) that :

a. She was working together with the plaintiff in 1994 when the plaintiff proposed to her to “borrow” Lot 372;

b. The plaintiff told her that such a request had already been refused by Fuk;

c. The plaintiff explained that he needed to borrow the land because he wanted to put a container on it for his children to sleep in;

d. The plaintiff also made the promise that “if you need, I will return it to you.”;

e. She discussed with Fuk after work but he still refused and she told the plaintiff such; and

f. For the next 1 – 2 month, the plaintiff and his wife persisted in requesting her to persuade Fuk, and every time they raised this, they made the promise to return the land on request.

g. Out of her goodwill, she persuaded Fuk and he finally agreed on the condition that they have to return the land on request.

20.  I have serious doubt about such evidence.

21.  Firstly, given the objective evidence that the plaintiff had fenced off the relevant lots since the 80s and no doubt been using them, there is no evidence before the court that Fuk had ever interfere with this.

22.  There seemed to be no logical reason why, after more than 10 years of use of the lots without interference, the plaintiff would be so concerned to seek permission from Fuk to place a container there. Why would the plaintiff bother draw so much attention to his use of the relevant lots after all this time?

23.  Secondly, her evidence was clearly inconsistent. When under cross-examination, it was put to her that this request would only affect Lot 372, the 1^st defendant quickly added that the plaintiff also asked to use Lot 365RP for cooking barbecues. This was entirely new evidence.

24.  Further, the 1^st defendant was unable to produce any convincing explanation as to why she remembered that this occurred exactly in the year 1994 given that she told the court that she and the plaintiff worked together from around 1992 to 1998 or 1999.

25.  Also, given that Fuk had repeated refused the request, the 1^st defendant also could not provide any explanation as to what caused him to change his mind given that the plaintiff had kept proposing exactly the same “return on request” condition.

26.  The 1^st defendant was also unclear and inconsistent as to who and when first proposed the “return on request” condition.

27.  I would conclude that I find the evidence of 1^st defendant regarding this alleged 1994 oral agreement not credible.

The plaintiff’s legal burden

28.  However, as stated above, the plaintiff’s claim does not turn on whether the defendants could establish this alleged 1994 oral agreement. Despite my findings against the existence of this, the plaintiff still carries the legal burden to show animus possidendi.

29.  The defendants’ witness, Fung Chun Wah (“Wah”), is the brother of Fuk but has no interest in the lots in question.

30.  He gave evidence that it had always been common practice in the village to “borrow land” and to return the land on request as an oral agreement. He gave an example that he had personally lend a piece of land to his cousin for 10 years without rent and that the cousin returned the land. He also confirmed that there had never been the problem of a claim in adverse possession in the village.

31.  This evidence was not challenged and given the circumstances that this was a small village on Lantau Island and that the villagers were relatives within the same family, there was no reason for the court to doubt that this practice existed all along.

32.  Wah also gave a detailed background of how he became aware of the dispute between the plaintiff and the defendants during a wedding ceremony hosted by the plaintiff for his son’s wedding in the café on Lot 371.

33.  More importantly, Wah stated in paragraphs 21-22 of his witness statement (page 71 of the Trial Bundle) of negotiations concerning selling or swapping the lots with the plaintiff’s eldest daughter and her husband after 2012-2013.

34.  Wah specifically stated in paragraph 22 of one occasion in April 2016 that the plaintiff’s eldest daughter and her husband offered a land swap or offered HK$150,000 for the lots. They offered to swap a small piece of land next to Wah’s house.

35.  On my analysis, these are very specific claims which, if untrue, can easily be refuted by the plaintiff by simply calling her eldest daughter and her husband as witnesses. I cannot see any logical reason why any witness would take the risk to make up such an easily refutable lie. Of course, the plaintiff did not call her eldest daughter nor her husband to refute such a claim.

36.  I would therefore accept Wah’s evidence regarding these negotiations.

37.  Further evidence to support such negotiations was the fact that the 2^nd defendant has engaged a surveyor (Mr. Cody Pang Chi-wing) to conduct a survey of the lots in 2016.

38.  On questioning, the 2^nd defendant was able to give details as to how he located this expert (on recommendation by a relative living in a nearby village of Tong Fuk). More importantly, he explained that the reason for engaging the surveyor was because he was told during the negotiation that the lots were very small and he did not believe that.

39.  The 2^nd defendant was also able to give details of how the surveyor visited the land twice:

a. during the first visit, the surveyor was refused entry by the plaintiff and had to call the 2^nd defendant, who then went to the plaintiff’s place to explain the situation.

b. They were then allowed in and the plaintiff and his wife, and the 2^nd defendant watched on as the surveyor set up his GPS device.

c. On the second visit, the surveyor called the 2^nd defendant beforehand so that they went together to avoid being refused entry.

d. On this occasion, the surveyor was planting metal nails to mark the boundaries of the lots. The 2^nd defendant was able to give some details as to the size and material of the nails used.

e. The plaintiff was also watching on this occasion but his wife went back inside the house after a while.

40.  Against the 2^nd defendant’s evidence (which I found to be logical, reasonable and detailed), the plaintiff’s case was a simple denial.  He said that in around April 2016, he noticed that some people claiming to be surveyors loitering outside the fence (paragraph 23 of the plaintiff’s witness statement, page 42 of the Trial Bundle). The plaintiff claimed in court that he denied them entry onto his land.

41.  There is never any doubt that this survey did take place given that Mr. Pang’s survey report dated 22 April 2016 is in the Trial Bundle (page 303-314). The plan produced (page 305 of the Trial Bundle) clearly showed that the boundaries of the lots were inside the fence-in area. This also can easily be confirmed by reference to the Survey Sheets in the joint expert report. No evidence or explanation was advanced as to how this survey could be done without the surveyor gaining assess inside the plaintiff’s fenced-off area.

42.  As such, I find that the survey could only be done either by Mr. Pang trespassing by entering the plaintiff’s fence without permission, or by the plaintiff grating assess to Mr. Pang.

43.  Of course, I cannot see why Mr. Pang would risk trespassing to produce a survey report.

44.  More importantly, Mr. Pang’s survey report has been disclosed in the 2^nd defendant’s witness statement dated 10 July 2018 (if not earlier). If the plaintiff had never allowed Mr. Pang entry, he should be furious that Mr. Pang had trespassed and conducted a secret and forbidden survey on “his” land. It would be reasonable to expect the plaintiff to raise serious complaints or even taken appropriate legal action.

45.  There was no evidence of such.

46.  Given the above consideration, I would accept the 2^nd defendant as a credible witness and that the survey did take place as he alleged.

Analysis

47.  The question therefore is that, given the plaintiff’s claim that he has considered Lot 365RP and Lot 371 to be belonging to him since 1980, why would he (or his eldest daughter apparently on his behalf) be negotiating with the defendants, making offers and allowing a survey on such lots around 2012 to 2016?

48.  Mr. Wilfred Tsui, the plaintiff’s counsel, advanced an argument the existence of such discussions does not defeat the plaintiff’s case. As the plaintiff’s adverse possession started in 1980 (or earliest by objective evidence of survey sheets and aerial photograph in 1983), the defendant’s rights would have been extinguished well before such discussions taking place.

49.  Mr. Tsui quoted as support, amongst others, Cheung Yat Fuk and Tang Tak Hong & Others (2004) 7 HKCFAR 70, Sanders v Sanders (1881) 19 ChD 373 and, in particular, Lam Sai Wan and Minloy Limited [2018] HKKCFI 1710 where even a signed acknowledgement of the registered owner’s title was held to have no effect after the expiration of the limitation period.

50.  I am of the view that these precedents were no more helpful here than a reiteration of the legal principle that the claimant needs to show both factual possession and animus possidendi for the relevant time period, and once that limitation period expires, the registered owner would lose his rights to claim possession even if the trespasser was subsequently asked to acknowledge the title.

51.  However, the court still needs to find, for example, that animus possidendi existed for the relevant period of time and there is nothing in these precedents to suggest that the court cannot assess all the evidence at all times in order to infer the existence or otherwise of animus possidendi during the relevant time period.

52.  Indeed, there should not be any “line drawn in the sand” where the court is only allowed to assess the evidence before and during the time period, but not after the expiration of the limitation period. There is no reason to exclude such evidence because evidence like parties’ behaviour after the limitation period may still be helpful in establishing whether the requisite animus possidendi existed during the time period.

53.  Each case turns on its own facts and there are particular features in this case.

54.  Firstly, the plaintiff and the defendants are relatives living in a small village and the practice of “land borrow” from relatives is not uncommon in the village.

55.  Secondly, the plaintiff was clearly aware of the boundaries of his own land: he built his house exactly on the boundaries of Lot 372. It is not a case that the claimant built his house (or any permanent structures) over the boundaries for years without the registered owner taking action.

56.  Thirdly, it must also be noted that the defendants (and the predecessor-in-title) had been paying the government rent for both Lot 365RP and Lot 371. Indeed, the plaintiff’s land and the lots are situated right opposite the bus terminal so it was not a case where the disputed land were obscured and remote on some mountain.

57.  Fourthly, if this arrangement of “land borrow” between Fuk and the plaintiff existed, this also would explain why the problems started when the plaintiff commenced the café business on Lot 371 around 2008/2009 (or 2010 as the plaintiff claimed: the exact date and year is not important): the practice was to lend land free of charge to relatives in the village and obviously, if one took advantage of this and started a business, it was only natural that the owner would seek a rent.

58.  The plaintiff had simply denied such events but the details of such are largely corroborated by the 2^nd defendant and Wah, both of whom I found to be credible witnesses.

59.  It is trite that having the property surrounded by a fence (as in this case) is good evidence to show an intention to exclude the world at large, but this only holds true if it can be shown that no tenancy or licensee agreement existed because under those circumstances, the existence of a surrounding fence shows no more than the title owners granting the usual “quiet enjoyment” to the tenant or licensee.

60.  Finally, the most important feature of this case was the negotiation of sale or land swap, and the plaintiff allowing a surveyor onto “his” land as stated above.

61.  The plaintiff again simply denies such events but, by my analysis above, I am satisfied that such events did occur.

62.  If the plaintiff has, all along since 1980, considered Lot 365RP and Lot 371 as his own land and that no one ever raise any matters regarding his use of the land, one would reasonably expect the plaintiff to simply say, “Go away! This is my land! I do not need deal or negotiate with you.”

63.  The plaintiff’s case was that he was aware of the boundary of Lot 372 and he has considered Lot 365RP and Lot 371 also his own land since 1980. As such, he has no reason to allow a surveyor to conduct a survey on “his” land in 2016.

64.  The only reasonable explanation of such behaviour was that he was aware all along that this was a “land borrow” arrangement and he has been negotiating to buy, or swap his other land for, Lot 365RP and Lot 371, and that the registered owners (the defendants) needed to ascertain the sizes in order to facilitate negotiation, which the plaintiff clearly consented to by allowing the survey to take place. (I could only speculate that at some point during the negotiation, the plaintiff became aware of the possibility of an adverse possession claim provided that he could claim an “intention to possess” right from the beginning.)

65.  It is trite that, in making an offer to purchase (or swap for) the Lots, the plaintiff (via his daughter) was “quite clearly saying that as between himself and the person to whom he makes the offer, he realizes that the latter has a better title, and that would seem to be plainest possible form of acknowledgement.” (Edginton v Clarke & Anor. 1964 1 QB 367 at 376).

66.  It does not matter that the plaintiff has done these after the expiration of the limitation period because such behaviour allowed the court to infer whether the plaintiff could show that he has the requisite animus possidendi during the time period and, by my analysis, he has failed to show that.

67.  I find it more likely that Lot 365RP and Lot 371 were a “land borrow” arrangement according to local practice between relatives in the village. This would have likely been in form of a license granted by oral agreement between the plaintiff and whoever the title owner was at the time.

68.  I would further hold that the licence has been formally revoked by written notice by 2 letters dated 21 November 2016 and 19 December 2016 from the defendants’ legal representatives Messrs. C.W. Heung & Partners. The written notice required the plaintiff to cease using Lot 365RP and Lot 371 by 31 January 2017 which the plaintiff has clearly failed to complied with.

Order

69.  Accordingly, I will give the following order:

a. The plaintiff’s claim be dismissed;

b. An order for possession of Lot 365RP and Lot 371 be granted to the defendants; and

c. The costs of this action be to the defendants to be taxed if not agreed.