LAM SAI WAN v. MINLOY LTD

CACV 404/2018

[2022] HKCA 37

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 404 OF 2018

(ON APPEAL FROM HCA NO. 31 of 2014)

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JUDGMENT

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Hon Chu JA giving the Judgment of the Court:

A.   Introduction

1.  This is the appeal of the defendant, Minloy Limited (“Minloy”), against the judgment of Deputy High Court Judge Saunders (“the Judge”) given on 23 July 2018 (“the Judgment”), whereby judgment was entered for the plaintiff, Lam Sai Wan (“Mr Lam”), in respect of his adverse possession claim over 46 lots of land located at DD 331, Cheung Sha, Lantau Island (“the Lots”), which are registered in the name of Minloy. 

2.  In this appeal, Minloy seeks to challenge the Judge’s findings that Mr Lam has adversely possessed the Lots and that he has the requisite intention to possess.  In contesting the appeal, Mr Lam has put in a Re-Amended Respondent’s Notice seeking to affirm the Judgment on other grounds.

B.   The facts

3.  The background and facts of the case have been set out in detail by the Judge[1].  For the purpose of this appeal, it is only necessary to highlight the following salient aspects as found by the Judge, which come primarily from the oral evidence of Mr Lam[2] and the evidence of his son, Mr Lam Sui Cheong (“Mr S C Lam”), which were accepted by the Judge, as well as the undisputed aerial photographs spanning from 11 November 1945 to January 2015.    

B1.    Mr Lam’s possession of the Lots

4.  Mr Lam testified that he came to Hong Kong in 1951.  In 1957, he was employed by Mr Shen Pei Min (“Mr Shen”) to work at a farm called Man Yuen Farm (“the Farm”).  The Farm was located on DD 331 and its area covered (but was not limited to) the Lots.

5.  One of the first jobs Mr Lam was engaged in upon being employed was to establish a form of enclosure around the Farm.  This was achieved by planting a form of thorny pandanus around the parameters of the Farm, as well as using rocks, wood, bamboo and old electrical wire to create a form of barrier.  

6.  In 1959, Mr Shen emigrated to Brazil.  After his departure, Mr Lam took over the running of the Farm.  With the assistance of workers who used to work for Mr Shen, and later his family members, Mr Lam continued to grow vegetables and fruit, built fishponds, and resided on the Farm.  Mr Lam would take the produce to a cooperative market in Mui Wo for sale.  When the Mui Wo market ceased operation, Mr Lam rented a stall in the market at Cheung Chau to sell his produce.

7.  The land occupied by Mr Lam (“the Occupied Area”) covers the Lots and includes other pieces of land, such as unregistered Government land, that do not form the subject matter of this litigation.  The location of the Lots as well as the structures on them are not in dispute.  The Judge referred to the lots to the north and northwest of Lot 130 as the upper area, and the lots to the south and southeast of, and including, Lot 130 as the lower area.  The upper area has 28 lots which are all owned by Minloy.  The lower area has 24 lots, of which 18 lots are registered in the name of Minloy.

8.  In 1964, Mr Lam purchased a plot of land, Lot 132 of DD 331. It is located within the Occupied Area in the lower area, but is not part of the Lots.  Mr Lam maintained a house on the lot where he lived with his family.

9.  Over the years, Mr Lam also built a number of structures within the Occupied Area.  Three of the structures were initially used as residential structures by his family; later two of them were used as shelter for livestock before they were let out as holiday homes. 

10.  Throughout this period and up to 1993 (see B3 below), no steps were taken by any person, including Minloy and its predecessors-in-title, to assert any title or interest in the Lots against Mr Lam. 

11.  The unchallenged evidence of Mr S C Lam, who was born in 1958, which was found by the Judge to be corroborative of Mr Lam’s evidence, further shows that:

(1)  Mr S C Lam started working with his father on the Farm as a child.  He had assisted in planting thorny pandanus around the Occupied Area to make it difficult for outsiders to enter the land.

(2)  There were two entrances to the Farm, being a wooden gate on South Lantau Road (located at the northern part of the Occupied Area), and a door to Upper Cheung Sha Beach (located at the southern part of the Occupied Area).  As illustrated by the aerial photographs, thorny pandanus were planted on each side of the two gates, which have provided a form of barrier which a human being would find it very difficult to cross.  

(3)  In 1981, a neighbour purchased Lots 128 and 131 in DD 331 and built a house there (“Yue Nam Villa” or “South Lantau Villa”). These two lots are not within the Occupied Area[3] and are not the subject matter of this dispute.  Pursuant to an agreement reached with this neighbour, Mr Lam widened the concrete path from the front of the house to the gate at South Lantau Road while the neighbour replaced the wooden gate with a metal gate in 1981.

(4)  Warning signs were put up at both entrances to the Occupied Area at South Lantau Road and Upper Cheung Sha Beach.  The gates to the entrances were kept locked during the period from 1959 to 1979[4].

(5)  Mr S C Lam had assisted his father in constructing fishponds in the Occupied Area, where carp and grass carp were raised for sale and also for consumption by the Lam family.  They also raised poultry on the Farm. 

(6)  Applications for installation of a telephone line and supply of electricity were made in 1976 and 1981 respectively.

B2.    Minloy’s paper title in the Lots

12.  The evolution of the paper title to the Lots is summarized by the Judgment at §15.  Minloy’s immediate predecessor-in-title is Caborca Investments Limited (“Caborca”).  It acquired the Lots in August 1979, subject to a mortgage loan in favour of Barclays Bank plc.  On 19 December 1991, by way of a mortgagee sale by Barclays Bank plc, Minloy acquired paper title to the Lots from Caborca.

B3.    The 1993 Acknowledgement

13.  In June 1993, Helen Law and Dennis Kwok, the directors of Minloy, met Mr Lam at the Farm.  What is relevant for present purposes is that at the meeting, Mr Lam was asked to sign, and did sign, a confirmation in respect of not the entirety of the Lots, but only 17 lots of them (“the 1993 Acknowledgement”).  It is in the following terms[5]:

“To Minloy Ltd

I, Lam Sai Wan and my family now admit that we have been using 17 lots of agriculture land at Cheng Sha, Lantau Island, Hong Kong (DD 331) of the Minloy Ltd (Lot Nos 130, 137, 138, 139, 140, 141, 142, 144, 145, 154, 159, 160, 161, 162, 163, 165, 166) for agriculture purposes since January 1992 till present (24th June 1993). The aforesaid lots are all owned by Minloy Ltd.

I representing my whole family am now discussing with Minloy Ltd (which is the landlord of the aforesaid 17 lots of agriculture land) regarding the terms of renting these agriculture lands and will sign to confirm upon reaching any agreement.”

14.  As pointed out in the Judgment at §102, were it not for the Judge’s holding that Mr Lam’s adverse possession had already extinguished Minloy’s title to the Lots, the 1993 Acknowledgement would have caused time to run afresh and would have required Mr Lam to establish 12 years of adverse possession commencing in June 1993.

C.   The Judge’s decision

15.  The principal findings underlying the Judge’s judgment in favour of Mr Lam can be summarised as follows:

(1)  After Mr Shen’s emigration to Brazil, Mr Lam has occupied the land within the Occupied Area as his own (Judgment at §42).

(2)  There was no evidence, and it was not put to Mr Lam, that as between 1959[6] (when he took over the Farm for his own benefit) and December 1991 (when Minloy acquired the Lots), any person had approached Mr Lam and suggested to him that they were holders of the paper title to the Lots.  Mr Lam was simply left to his own devices to farm the Lots as he wished for at least 20 years since 1959 (Judgment at §48);

(3)  The Judge rejected the evidence of Mr Victor Lee (former director and shareholder of Caborca) that he “would have” instructed Caborca’s solicitor to investigate the title to the Lots and ensured that they were not subject to adverse possession before Caborca purchased the same in 1979.  Instead, the Judge found that no one from Caborca had taken any steps to challenge Mr Lam’s adverse possession at any time up to Caborca’s disposal of the Lots to Minloy (Judgment at §§60-66).

(4)  The Judge also rejected the assertion that Mr Lam occupied the Farm by virtue of a licence granted by the Rural Committee (Judgment at §§67-69).

(5)  On the evidence, Mr Lam began occupying the Occupied Area, including the Lots, for his own benefit in 1959 (Judgment at §79).  Since then and until 1980 and beyond, until the signing of the 1993 Acknowledgement in June 1993 (see §13 above), he had occupied the Lots and dealt with them as though they were his own, without challenge from any of the paper owners.  By cultivating the greater proportion of the Occupied Area, operating the Farm for his personal benefit and retaining the income from the produce, building structures on the land, installing gates at the entrances, and setting up electricity supply and a telephone line, he had dealt with the Lots in all ways which the true owner could have dealt with the land, and treated the land as his own (Judgment at §§80-83).

(6)  Mr Lam had also excluded the world at large so far as was reasonably practicable and as far as the processes of the law would allow.  His acts of putting up signs to exclude trespassers, developing the land to his own will and design and dealing with the land as an occupying owner might have been expected to deal with it demonstrated an intention to dispossess the paper owner and to treat the land as his own (Judgment at §§80-85).

(7)  Accordingly, by 1979[7], Mr Lam had extinguished the title of the paper owner to the Lots by way of adverse possession.  It follows that when Minloy purported to acquire the Lots from Caborca in January 1992, the title had already been extinguished and Caborca had nothing to sell (Judgment at §88-89). 

(8)  When Mr Lam signed the 1993 Acknowledgement, he understood the content.  The 1993 Acknowledgement only relates to 17 of the Lots, and no mention was made of the other 29 lots in the discussions between Minloy and Mr Lam. The 1993 Acknowledgement is an acknowledgement of title of the 17 lots covered by it, but it was meaningless and could not assist Minloy because by 1993 the title to the 17 lots had already been extinguished.  In respect of the other 29 lots, it was not until August or September 2013 that a consultant appointed by Minloy made an assertion of title, but this was of no effect because by then the title to the Lots have been extinguished by Mr Lam’s continuous adverse possession (Judgment at §§100-103 and 110-114).

(9)  In conclusion, Mr Lam had, at the latest, by December 1991, and probably as early as 1980, been in adverse possession of the Lots in excess of 20 years and the paper title to the Lots was accordingly extinguished (Judgment at §115).   

D.   Grounds of Appeal

16.  In the Re-Amended Notice of Appeal (“RANOA”), Minloy advanced four grounds of appeal, which may be summarised as follows (respectively “Ground 1” to “Ground 4”):

(1)  The Judge wrongly failed to consider that Mr Lam’s pleaded case was exclusive possession of the whole of the Occupied Area, rather than just the Lots.

(2)  On the facts, the Judge failed to consider that not all the Lots were in use at all material times, and that the Lots, in themselves, were open land.

(3)  The Judge erred in finding that Mr Lam had evinced the requisite animus possidendi.

(4)  The Judge erred in law by granting a declaration that Mr Lam is entitled to be registered as owner of the Lots in the Land Registry.

E.   Our reasons for judgment

E1.    Grounds 1 and 2

17.  Grounds 1 and 2 both relate to the issue of Mr Lam’s factual possession of the Lots and can be dealt with together.

18.  The thrust of the arguments of Mr Andrew Mak, counsel for Minloy, is that the Judge took a wrong approach in determining whether adverse possession was established in that he only had regard to the Lots, and had not considered the situation of the entire Occupied Area.  He referred to footnote 1 to §4 of the Judgment where the Judge said “… As the proceedings related solely to the 46 lots to which Minloy held paper title, it was not necessary to determine Mr Lam’s rights to the balance of the Occupied Area, which land I understand to be Government Land.”  It is argued that the Judge’s approach, as reflected in the part underlined, differs from the case pleaded and run by Mr Lam, which is that he was in exclusive possession of the whole of the Occupied Area since 1959.  Mr Mak further submits that the character of the occupation of the Lots should be considered together in tandem with the character of the occupation of all the land within the Occupied Area, and that Mr Lam has to prove he has single and exclusive possession of all the land within the Occupied Area and not just the Lots.   

19.  We do not think the complaint that the Judge had adopted a wrong approach is justified.  In the first place, when the Judge indicated that he did not need to determine Mr Lam’s rights to the balance of the Occupied Area (in footnote 1 to §4 of the Judgment), he was referring to a potential dispute between the experts for Mr Lam and Minloy over the boundaries of the Occupied Area, which did not impact on the Lots: see Judgment at §4.  It is perfectly legitimate for the Judge to proceed on the basis indicated in footnote 1, since the potential dispute on the outer boundaries of the Occupied area does not concern and is of no relevance to the ultimate disposal of the action.  The Judge’s statement has to be read in the context.  It in no way indicates that the Judge is unaware of, or has disregarded, the case pleaded or run by Mr Lam. 

20.  On the contrary, it is clear that the Judge well appreciated Mr Lam’s case to be that he had exclusively possessed the entirety of the Occupied Area, and not just the Lots.  This is reflected in the following passages in the Judgment:

(1)  At §42, the Judge noted that “Mr Lam said that since … Mr Shen’s emigration to Brazil, he had treated the land within the Occupied Area as his own”.

(2)  At §66, the Judge pointed out that “It was not suggested to Mr Lam or Mr S C Lam that at any stage during Caborca’s ownership of the titles in the Occupied Area, from August 1979 until December 1991, any person from Caborca took any steps at all to challenge Mr Lam’s adverse possession of those titles”.

(3)  At §79, the Judge found that “On the evidence, Mr Lam began occupying the Occupied Area for his own benefit during 1959, when it was suggested to him that he should take over the running of Man Yuen farm.  To extinguish the paper title by adverse possession at that time there must be 20 years’ occupation.  So Mr Lam must establish that between at least 1959 until about 1980, he was in adverse possession, as that expression is known to the law, of the land”.

21.  Further, the Judge had referred to Mr Lam erecting a form of enclosure around the Occupied Area (by planting thorny pandanus and using old electrical wire to form barriers) and constructing fishponds within the Occupied Area as reflecting Mr Lam’s intention to treat the Lots as his own. In so doing, the Judge must have proceeded on the basis that Mr Lam was in fact claiming adverse possession of the entirety of the Occupied Area (and not just confined to the Lots), since the majority of the outer boundaries of the Occupied Area (where the thorny pandanus and barriers are located) as well as the fishponds do not touch on the Lots at all.

22.  Mr Mak also seeks to challenge the Judge’s holding that Mr Lam was in exclusive possession of the Lots.  To that end, he has prepared a table to show that, on the evidence, not all the land in the Lots were occupied or utilized by Mr Lam over the years. 

23.  We do not accept this argument.  First, this is a challenge to the factual conclusion reached by the Judge.  To succeed, it must be shown that the Judge had committed palpable errors giving rise to grounds for intervention by the appellate court.  Unless the appellate court is satisfied that the trial judge’s conclusion on the facts was plainly wrong, it should defer to the trial judge’s conclusion even if it is in some doubt as to its correctness: see Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §42; and China Gold Finance Ltd v CIL Holdings Ltd (unreported) CACV 11/2015, 27 November 2015, at §§11-16.

24.  Second, as the Judge correctly pointed out, a squatter need not actively farm the whole of the land for the whole of the limitation period before his claim for adverse possession would be recognized, relying on Powell v McFarlane (1979) 38 P & CR 452 at 470-471.  The Judge also referred to Deputy High Court Judge Muttrie’s judgment in Chan Suk Yin v Harvest Good Development Ltd (unreported) HCA 477/2000, 25 February 2004, at §57[8]:

“… once a squatter takes over land and establishes possession by actively farming it, it seems to me that he need not necessarily show that active farming continued on the whole of the farm he has established for the whole of the limitation period. Possession does not leech away with lack of use; it depends on there being some element of control. It is only if control is lost, for example where the land is taken over by another squatter or by the paper owner, that possession is lost. If the squatter remains on the farm, in a position to keep others off it, he remains in control. What is required is that he deal with the land as an occupying owner might have been expected to deal with it, and that no one else has so dealt with it. An occupying owner does not have to farm every square foot of his land and I do not see that a squatter, once he has established possession need do so either.” (emphasis added)

25.  In response, Mr Mak referred to this Court’s decision in Gotland Enterprises Ltd v Kwok Chi Yau (unreported) CACV 260/2014, 19 January 2016, which pointed out that one must not lose sight of the exclusive character of occupation in order to establish factual possession.  In particular, Mr Mak relied on the following observations of Lam VP (as Lam PJ then was) at §38:

“In the present case, apart from the evidence on some earlier instances of stopping unwelcome visitors to fish at the ponds, there was no other measure adopted to secure exclusive occupation. On the other hand, there was evidence of others gaining access to the Land to carry out reclamation works over the Reclaimed Area. There was also evidence of persons authorized by the registered owner entering the Land to produce films and to conduct a survey of the Land. Since the 5th Defendant advanced his claim on adverse possession in respect of the whole area of the Land at the court below and did not put forward specific measures for exclusive occupation of the ponds which were not applicable to other parts of the Land, the character of the occupation of the ponds should be considered together in tandem with the character of the occupation of the Land.”

26.  We do not think the reliance on this case and the above passage is apt.  As we have observed in §21 above, the Judge had proceeded on the basis that Mr Lam was asserting adverse possession over the entirety of the Occupied Area (hence the discussion on the erection of barrier at the boundaries and the construction of fishponds within the Occupied Area), even though he did not have to determine, for instance, the precise outer boundaries of the Occupied Area and whether the title of the other owners within the Occupied Area (such as that of the Government in respect of unregistered Government land) had been extinguished. 

27.  In our view, in assessing the character of Mr Lam’s occupation of the Lots, the Judge had correctly and properly considered the character of Mr Lam’s occupation of the entirety of the Occupied Area, namely, for the operation of the Farm.  The Judge’s factual conclusion, based on the basket of factors identified in §§39-56 and 80-83 of the Judgment, cannot be said to be plainly wrong or otherwise involved any palpable error warranting intervention by this Court.

28.  Mr Mak also argues that whereas Mr Lam bears the burden to show that his acts carried out at various junctures from 1957 to present were without the permission and to the exclusion of the successive paper owners, he had not adduced evidence on (a) the size of the Farm when he took over from Mr Shen who only owned 25 lots at the time, (b) when was the barrier of the Occupied Area completed, and (c) when the gates to the entrances began to exist, and whether they were closed and, if so, how this was done, as there was evidence capable of contradicting Mr Lam’s evidence that the gates were kept closed from 1959 to 1979.   

29.  For the reasons set out below, we are not persuaded by these arguments:

(1)  The Judge was satisfied there was no evidence suggesting that any of the paper owners of the lots within the Occupied Area had prior to June 1993 come forward to assert any interest in the lots (including the Lots), notwithstanding Mr Lam’s occupation of them[9].  The burden cannot lie on Mr Lam to prove the negative; he cannot be asked to prove that Minloy, or each of its predecessors-in-title, had not asserted their paper title against him for the period between 1959 and 1993.  In any event, as the Judge noted[10], it was simply not suggested to Mr Lam that prior to 1993, any of the registered owners of the paper titles within the Occupied Area had contacted him or had in any way challenged his adverse possession of the Lots.

(2)  The precise details relating to the size of the Farm (such as its outer boundaries) and the date of construction of the barrier and the gates of the Occupied Area are immaterial to the Judge’s conclusion, since (a) the Judge was satisfied that the combination of the basket of factors identified in §§39-56 and 80-83 of the Judgment meant that Mr Lam had exercised exclusive possession of the Lots since 1959; and (b) as the Judge correctly noted[11], the requirement to exclude the world at large does not mean that it is a prerequisite for the plaintiff to prove he had securely fenced or had otherwise fully enclosed the land: see, for instance, the opinion of the Privy Council in Higgs v Nassauvian Ltd [1975] 1 All ER 95 at 101e-j.

(3)  It is also not open to Minloy to challenge the Judge’s factual finding[12] on the existence of the gates to the Occupied Area and that they were kept closed from 1959 to 1979, when this challenge was never foreshadowed in the RANOA.  In any event, we are not satisfied that the Judge’s finding in this respect, which is not contradicted by any evidence proffered by Minloy, can be said to be plainly wrong.  Although Ms Jane Lee’s evidence was that the gates were not locked, this was referring to the period after 2011.  The Judge was entitled to find her evidence incapable of contradicting Mr Lam’s evidence that the gates were kept closed from 1959 to 1979.

30.  Mr Mak further makes a point that the Judge, in dealing with Minloy’s contention that not all of the lots in the Occupied Area were utilized, accepted Mr Lam’s oral evidence that he practised crop rotation, when this was never pleaded, there was no agreed expert evidence on the cultivation of the Lots between 1959 and 1962, and 20 of the Lots were either never cultivated or only cultivated for some years with no explanations given by Mr Lam.  It is also said that the Judge’s finding that the lower area was consistently in cultivation was incorrect as in the period between 1963 and 1979 only half of the lots were in continuous cultivation.

31.  We do not think that there is substance in the arguments. On the pleading point, as Mr Wilfred Tsui, counsel for Mr Lam, correctly submitted, crop rotation is only a method of cultivation.  Mr Lam had pleaded he used the Lots for agricultural purposes[13].  It is not essential the fact that he practised “crop rotation” (which is a matter for evidence) be pleaded for the cause of action in adverse possession to be complete.  As to the use of the Lots, the Judge was clearly aware that there was no cultivation on some of them during the whole or part of the period in question.  This can be seen, for example, in his discussion of the aerial photographs[14].  We do not think the Judge was in error when he said the aerial photographs establish that the lots in the lower area were consistently in cultivation[15].  There is no basis to disturb the Judge’s acceptance of Mr Lam’s evidence on the practice of crop rotation.  

E2.    Ground 3

32.  Ground 3 challenges the Judge’s finding that Mr Lam has the requisite animus possidendi to adversely possess the Lots.  Minloy puts forward five factors[16] and contends that they contradict Mr Lam’s intention to possess the Lots as his own.  The matters relied upon are: (1) the 1993 Acknowledgement; (2) the various approaches made by Minloy to Mr Lam in May 1993, 2000 and thereafter; (3) the absence of evidence to show a change in Mr Lam’s intention from managing the Lots as Mr Shen’s employee to being a squatter and/or owner of the Lots; (4) Mr Lam’s purchase of Lot 132 in May 1964; and (5) the purchase of Lot 131 in 1981 by another person and Mr Lam’s agreement with the new owner on the replacement of one gate and the use of the gates (see §11(3) above).   

33.  We are of the view that this ground has no merit for the following reasons:

(1)  Even if the 1993 Acknowledgement may constitute an acknowledgement of title for the purposes of section 23(1) of the Limitation Ordinance, Cap 347, it does not advance Minloy’s case since, as correctly noted by the Judge, its paper title to the Lots had long been extinguished by Mr Lam’s adverse possession of the Lots for a 20-year period since 1959: see, for instance, Cheung Yat Fuk v Tang Tak Hong (2004) 7 HKCFAR 70 at §5. 

(2)  Insofar as Mr Mak seeks to argue that it can be inferred from the 1993 Acknowledgement that in the period prior to 1993 Mr Lam did not have the requisite intention to possess, this is a new point not put to Mr Lam or argued before the Judge.  It is not permissible to raise it on appeal, especially when the point is fact sensitive. 

(3)  In any event, given the circumstances in which the 1993 Acknowledgement came into being (as described in the Judgment §§95-99), we do not think that the Judge’s factual conclusion that Mr Lam had demonstrated the requisite animus possidendi notwithstanding the existence of the 1993 Acknowledgement can be said to be plainly wrong.   The same can be said of the approaches by Minloy to Mr Lam in 1993 and thereafter.

(4)  As to the fact that Mr Lam was previously an employee of the Farm and Mr Shen could freely sell his land, it is neither here nor there. The Judge was perfectly entitled to accept Mr Lam’s evidence that upon Mr Shen’s emigration to Brazil in 1959, Mr Lam intended to, and did, take up possession of the Farm as his own.  The fact that at the time Mr Shen only owned 25 lots in the area occupied by the Farm is not pertinent since Mr Lam’s case has always been that he possesses the whole of the Occupied Area.   

(5)  There is also nothing in the argument that Mr Lam did not have the requisite animus possidendi since he had himself purchased Lot 132, which is within the Occupied Area, in 1964.  While this piece of evidence may show that insofar as Lot 132 is concerned, Mr Lam may not have the intention to exclude the whole world as at 1964, it does not logically follow that this would negate Mr Lam’s intention with regard to the other pieces of land (and, in particular, the Lots) within the Occupied Area.  It is also pointed out by Mr Tsui that the purchase was necessary to enable him to obtain approval from the government to build a house.  In our view, it cannot be said that the Judge was plainly wrong in concluding in favour of Mr Lam in this regard, notwithstanding his purchase of Lot 132, a fact that the Judge had taken into account.

(6)  As to the purchase of Lot 131 in 1981 by the neighbouring owner of Yue Nam Villa, we fail to see the relevance.  Mr Lam’s case has always been that the land falling within Yue Nam Villa fell outside the Occupied Area[17]. The fact that Mr Lam reached an agreement with his neighbour on the maintenance and use of the gates at the outer boundary of the Occupied Area is not inconsistent with Mr Lam’s case, since if an agreement was reached (which the Judge accepted[18]), the neighbour would be using the gates with Mr Lam’s permission.

E3.    Ground 4

34.  Mr Mak did not elaborate upon this ground in his written submissions.

35.  The Judge, having been satisfied that Mr Lam’s case on adverse possession of the Lots was proved, made a declaratory order, inter alia, that “[Mr Lam] has acquired possessory title of the said lots and that he is entitled to be registered as owner of the said lots in the land registry”[19].

36.  However, the fact that Mr Lam had acquired a possessory title does not mean that he is entitled to be registered as owner of the Lots. In law, the acquisition of a possessory title through adverse possession does not operate as a statutory conveyance and does not entitle the holder of the possessory title to be registered as owner in substitution of the paper owner: Wong King Lim v Incorporated Owners of Peony House [2013] 4 HKC 295 at §§33.2 and 37.  This is particularly so since the Hong Kong land registration system is based upon the registration of instruments, and not that of title: Shum Chin Kit v Estate of Lok Lai Sheung (unreported) HCMP 1647/1998, 21 August 2001, at §12.

37.  For this reason, the Judge’s order declaring that Mr Lam is entitled to be registered as owner of the Lots in the Land Registry cannot be sustained in law and should be set aside.

E4.    Re-Amended Respondent’s Notice

38.  In view of our conclusion reached above, it is strictly speaking not necessary to deal with the Re-Amended Respondent’s Notice, which contends that even if the 1993 Acknowledgement would have the effect of negating his animus possidendi prior to 1993, he would still have adversely possessed the Lots for more than 12 years since 1993, and as such would be entitled to judgment. 

39.  It suffices for us to indicate that we do not think the argument advanced in it would assist Mr Lam.  The difficulty in this argument is that if we proceed on the basis that Mr Lam did not have the necessary animus possidendi prior to 1993 (by reason of the 1993 Acknowledgement or otherwise), there is simply no evidence available before the Judge which would entitle him to find that Mr Lam had, subsequent to 1993, manifested an intention in respect of the Lots which is different from that for the period prior to 1993.

F.  Conclusion and costs

40.  For the above reasons, the appeal is allowed to the limited extent that paragraph 3 of the sealed judgment dated 23 July 2018 is varied to “The Plaintiff has acquired possessory title of the said lots.”  The rest of the appeal is dismissed.  The Re-Amended Respondent’s Notice is also dismissed.

41.  Given that Mr Lam is substantially the winner in this appeal, and that no written submission was advanced by Minloy on Ground 4, we order Minloy to pay Mr Lam his costs of the appeal, to be taxed if not agreed. We make no order as to costs of the Re-Amended Respondent’s Notice.  Mr Lam’s own costs will be taxed in accordance with the Legal Aid Regulations.