TSOI PING HUNG AND ANOTHER v. CHEUNG CHOW LAN AND OTHERS

CACV 126/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 126 OF 2014

(ON APPEAL FROM DCMP NO. 1884 OF 2012)

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REASONS FOR JUDGMENT
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Hon Cheung JA :

I. The appeal

1.1  The plaintiffs are the registered owners of the land known as the Remaining Portion of Lot No. 2020 in DD 76 (‘the plaintiffs’ land’).  The plaintiffs claimed that the defendants had trespassed and encroached on part of the plaintiffs’ land described in the trial below as Part  1 and Part  2 land (‘the dispossessed part’) for their own use.  The plaintiffs sought, among other things, an order for possession of the dispossessed part against the defendants. 

1.2  The defendants contended that they have been in adverse possession of the dispossessed part and sought a declaration that the plaintiffs’ title to the dispossessed part had been extinguished by virtue of section 17 of the Limitation Ordinance (Cap. 347). 

1.3  H H Judge Wilson Chan found for the plaintiffs save and except the Part 1 land and dismissed the defendants’ counterclaim save and except the Part 1 land for which a declaration was granted that the plaintiffs’ title to the Part 1 land was extinguished and the 2^nd defendant has acquired a possessory title to that part.  The defendants appealed against the judgment in relation to the Part 2 land.

1.4  At the conclusion of the hearing, this Court allowed the defendants’ appeal.  I now give reasons for the judgment.

II.  The defendants’ case

2.1  The defendants claimed that they have been in possession of the Part 1 land since July 1990 and the Part 2 land since February 2000. 

2.2  The 2^nd defendant and the 1^st defendant live as man and wife.  The 3^rd defendant is the 2^nd defendant’s father.  The 1^st defendant and the 3^rd defendant are respectively the registered owners of Sub-section 4 of Section C of Lot 2021 in DD 76 (‘Lot 2021C 4’) and the Remaining Portion of Section  C of Lot  2021 in DD  76 (‘Lot 2021C RP’) (the defendants’ land).  The defendants’ land is located to the east of the plaintiffs’ land.

2.3  The defendants’ land was purchased by the 3^rd defendant in April 1990.  In or around July 1990, the 2^nd defendant engaged contractors to erect a wire fence (‘Fence 1’) on the eastern edge of the plaintiffs’ land.  This encroached a narrow strip of the plaintiffs’ land which is known as the Part 1 land. 

2.4  After the erection of Fence 1, the defendants’ land together with the Part 1 land was enclosed on all sides. No one could gain entry to the Part 1 land save through the main gate on the south-eastern corner of the defendants’ land.

2.5  House 117, a 3-storey small village house was built on the defendants’ land in or around mid-1999.  After it had been built, the 2^nd defendant and his family (including the 1^st defendant and their three daughters) moved into House 117 and they have been living there ever since.

2.6  On or about 15 February 2000, the 2^nd defendant who was a golfer, engaged contractors to remove the wild vegetation grown on part of the plaintiffs’ land which is known as the Part 2 land.  He also levelled that part with a view to building a ‘golf course’ on it for his personal enjoyment.  In about one month’s time (i.e. on or about 15 March 2000), the surface of the Part 2 land had been topped up with soil, ‘paved’, in the sense that it was planted with grass and a small ‘golf course’ was built on it. After that, the Part 2 land was about one metre higher than the western portion of the rest of the plaintiffs’ land.  In August 2000 the 2^nd defendant further built a shed resting partly on the Part 1 land and the defendants’ land. 

2.7  The defendants had originally let the defendants’ land to a tenant, Wai Hing Iron Works Ltd (‘Wai Hing’).  After House 117 was built, the defendants installed steel planks between the residential part of the defendants’ land and the part occupied by Wai Hing who had used the leased land as a scrap yard.  Although the size of the land leased to Wai Hing was reduced, the rent payable by Wai Hing was not reduced and the defendants permitted Wai Hing to use a small area on the bottom right corner of the Part 2 land for open storage.  The 2^nd defendant thereafter sometimes played golf and the 1^st defendant walked the dog on the ‘golf course’.  The 2^nd defendant’s domestic helper would cut the grass on the Part 2 land from time to time.

2.8  In or about mid-2001, the 2^nd defendant engaged contractors to erect a fence (‘Fence 2’) along the western edge of the Part 2 land.  The 2^nd defendant explained under cross-examination that Fence 2 was in fact erected at around Chinese New Year time in 2001, i.e. around January/February 2001. 

III.  The trial below

3.1  The trial before the Judge lasted five days.  On the fourth day of the trial, the plaintiffs conceded that the defendants had been in adverse possession of the Part 1 land.  The issue before the Judge was only in respect of the Part 2 land.

3.2  The plaintiffs’ claim was issued on 3August 2012.  In order to acquire title to the Part 2 land, the defendants must establish that they had been in adverse possession for at least 12 years before the plaintiffs’ claim.  In other words they had been in exclusive possession of the plaintiffs’ land before 3August 2000. 

3.3  The plaintiffs’ case before the Judge was that the defendants only started to gain exclusive possession of the Part 2 land upon the erection of Fence 2.  But, as Fence 2 was only erected in 2001 which was less than 12 years prior to 3August 2012, the defendants had failed to establish the requisite period of possession in order to extinguish the plaintiffs’ title. 

3.4  The plaintiffs succeeded in their argument and the Judge found against the defendants on the twin requirements for acquiring title to the Part 2 land by reason of adverse possession.  He held that the defendants had failed to establish the requisite period of factual possession.  In that regard he held that the defendants had failed to adduce any evidence on the following four questions :

(1) Did Wai Hing actually occupy any part of the Part 2 land (and if so, its size and location) for storage before 3 August 2000;

(2) How often did the 2^nd defendant play golf on the Part 2 land before 3 August 2000;

(3) How often did the 1^st defendant walk the dog on the Part 2 land before 3 August 2000; and

(4) How often did the 2^nd defendant’s domestic helper cut the grass on the Part 2 land before 3 August 2000.

3.5  The Judge further held that there was no evidence as to how much money the 2^nd defendant has spent in the removal of wild vegetation, levelling of land and planting of grass on the Part 2 land in February and March 2000.  Further     it was not impracticable for the defendants to have secured every part of the boundary of the Part 2 land so as to prevent intrusion, yet the defendants only did so by the erection of Fence 2 in 2001.

3.6  In respect of the question of intention, the Judge held that by the way in which the defendants had put their case, they had not formulated the intention to exclude the world at large from the Part 2 land prior to the installation of Fence 2 in 2001.  The Judge referred to paragraphs 13 and 14 of the 2^nd defendants’ witness statement. After he had mentioned the erection of Fence 2, the 2^nd defendant said :

‘ As a result, Part 1 and Part 2 were enclosed on all sides and no one could use occupy and enjoy Part 1 and Part 2 without [the defendants’] permission.’

3.7  In addition the Judge took into account the following.  Why the 2^nd defendant did not erect Fence 2 at the same time when he entered the Part 2 land sometime in 2000 (or at least shortly thereafter), but instead waited until Chinese New Year time in 2001 (or mid-2001)?  The reasonable inference on a balance of probabilities is that the 2^nd defendant only first formulated his intention to possess the Part 2 land in 2001 but not before.  Further why the 2^nd defendant did not put up warning signs or place some objects (such as flower pots or bricks) along the western edge of the Part 2 land to show that he did not welcome uninvited persons to enter onto the Part 2 land?  Clearly, the 2^nd defendant could have (but did not) made his alleged intention to possess clear to the world.

IV.  My view

4.1  Recognizing the heavy burden on the defendants in overturning a finding of fact by a trial judge who had the benefit of hearing the evidence and observing the demeanor of the witnesses as the evidence unfolded before him, I am, nonetheless, of the firm view that the Judge’s finding was flawed. 

1)  Factual possession

4.2  That the defendants had been in possession of the Part 2 land prior to January/February 2001 is supported by independent contemporaneous evidence and other evidence which the Judge had not addressed in his judgment.  The contemporaneous evidence is in the form of a series of aerial photographs taken of the location between 1999 and 2000.

(1) The 7 September 1999 photograph showed that the whole of the plaintiffs’ land was covered with vegetation.

(2) The 16 February 2000 photograph showed that the southeast corner of the Part 2 land had an exposed ground surface.  This suggested that the area was already being prepared for something in February 2000. 

(3) The 9 August 2000 photograph clearly showed materials of works were already being stored on the southeast corner.  It also showed that the vegetation had been cleared and that grass had been planted in its place.

(4) The 17 October 2000 photograph offered an even clearer picture of materials stored. 

4.3  The views shown on the aerial photographs are confirmed by the parties’ experts. 

4.4  The plaintiffs’ own expert recognized that the aerial photographs of 2000 showed that the eastern portion of the plaintiffs’ land had been ‘paved’, where a structure had been found at the eastern most part and the site had been cleared at the eastern portion. 

4.5  The defendants’ expert commented on the 2000 aerial photographs as follows :

(1) Aerial Photo of 16.2.2000

'Lot 2020 was in wild vegetation with ‘Part 1’ occupying/using (sic) by the owner/occupier of Lot 2021 S.C RP.  Patches of exposed ground surfaces were observed on the eastern part of Lot 2020; these exposed ground surfaces were most likely the earth-filled areas and/or track marks of vehicular passages from earth-filling works.’

(2) Aerial Photos of 9.8.2000 & 17.10.2000

'Earth-filling works on the eastern part of Lot 2020 as described in Para 6.2.7 was completed.  Lot 2020 was seen splitted (sic) into two parts in term of land use.  The western part of Lot 2020 was in wild vegetation while the eastern part of Lot 2020 (‘Part 2’) was earth-filled, levelled and grown in thin grasses.  Part 2 was not only turned to grass field but also encroached upon with part of a small structure and some works materials from Lot 2021 S.C RP.’

4.6  The joint expert opinion on the 2000 aerial photographs are as follows :

(1) ‘February, the image quality is comparatively poor.  The south-east corner of the Subject Lot is found of exposed ground.  The 1^st Fence cannot be identified.’

(2) ‘In August and October, the grass at the eastern portion of the Subject Lot has been trimmed.  The southeast portion of the Subject Lot is bare ground and sundries have been observed.  The 1^st Fence is removed.  A structure has been encroached the 1^st Portion of the Subject Lot and the northern part of the 1^st Portion has been paved.’

4.7  In my view all these are consistent with the 2^nd defendant’s claim that he started to take possession of the Part 2 land in February 2000 by removing the wild vegetation on it, raising up the level of the land, planted the Part 2 land with grass so as to build a small golf course and allowing the tenant to occupy part of that land. 

4.8  In my view if the Judge had properly taken this material evidence into account, he would not have come to the view that the defendants have not provided evidence on factual possession. The acts that the defendants had done on the Part 2 land are clearly consistent with them taking possession of that land. 

4.9  In the book entitled Adverse Possession byStephen Jourdan QC and Oliver Radley-Gardner, 2^nd edition, at paragraph 13–49, it is stated that :

‘ 13–49 Erecting a building, or paving land is usually a clear act of possession, regardless of the use made of the building or land after the work is completed.’

4.10  The authority cited by the author in support of this position is identified in footnote 107 :

‘ See Kynoch Ltd v Rowlands [1912] 1 Ch 527 at 531, per Joyce J: ‘In order to acquire any property in the ditch as against me my neighbour must take actual possession of it, as for instance by cultivating the ground, building upon or paving it.’ ’

4.11  Paving or cultivating land is evidence of possession, see Marshall v Taylor [1895] 1 Ch 641 (CA); Williams and Another v Usherwood and Another (1983) 45 P&CR 235 (CA); Taylor v Lawrence [2001] EWCA Civ 119; [2001] All ER (D) 180.

4.12  At the same time it is important to bear in mind further material evidence which the Judge had not referred to. First, three sides of the Part 2 land has been surrounded by manmade fences: there is a continuous concrete wall in the northern boundary, the eastern boundary was fenced off by Fence 1 and the southern boundary was also fenced off by wire fence.  Second, as to the western boundary, there was a ditch of about three and a half feet and the defendants had raised the height of the Part 2 land by topping it with one meter or nearly three point three feet of soil.  In other words, there is a height of about six feet between the rest of the plaintiffs’ land and the Part 2 land.  Hence, there is a further barrier in the western boundary as well. 

4.13  This barrier, properly considered in the context of the case, clearly carries with it the notion that the defendants have staked their interest in the Part 2 land by taking possession of it: see, for example, Chow Tin Sang (周天生) also known as Chau Tin Sang (周天生) as manager of Chau Fuk Tso v Citihero International Limited (CACV 121/2012).

2)  Intention to possess

4.14  As to the intention to possess the Part 2 land, Mr Mok SC and Mr Lee for the plaintiffs had properly drawn to our attention the requirement stated by Slade J in the well-known case of Powell v McFarlane (1979) 38 P&CR 452 at pages 471 to 472 and 476 :

‘ (4) …… What is really meant, in my judgment, is that the 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 processes of the law will allow.

The question of animus possidendi is, in my judgment, one of crucial importance in the present case. An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment, is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.

.....

In my judgment it is consistent with principle as well as authority that a person who originally entered another’s land as a trespasser, but later seeks to show that he has dispossessed the owner, should be required to adduce compelling evidence that he had the requisite animus possidendi in any case where his use of the land was equivocal, in the sense that it did not necessarily, by itself, betoken an intention on his part to claim the land as his own and exclude the true owner.’

4.15  In order to attack the argument of the barrier on the western side of the Part 2 land, Mr Mok further referred to the evidence of the 2^nd defendant that he built Fence 2 later in order to prevent his young daughter from falling into the ditch and also to prevent illegal immigrants from entering into the defendants’ property.  This suggests that the raised height of the Part 2 land was not sufficient to form a barrier so as to constitute an indication that the 2^nd defendant intended to exclude the world from the Part 2 land.

4.16  In my view, the Judge had taken an unduly narrow view on thesignificance of erecting Fence 2 in 2001.  What the defendants had done on the Part 2 land prior to the eretion of Fence 2 clearly ‘betoken an intention’ on their part to claim it as their own and exclude the true owner.  Properly considered, what the 2^nd defendant said in his witness statement does not mean exclusive possession of the Part 2 land only began with the erection of Fence 2.  Further the fact that Fence 2 was only erected in January/February 2001 for the two reasons advanced by the 2^nd defendant is not inconsistent with the defendants’ case that both the factual possession and intention to possess had already been formed earlier at the beginning of 2000. 

3)  The respondent’s notice

4.17  In the respondents’ notice the plaintiffs further submitted that the defendants had been unable to produce any document to prove that they had begun residing in House 117 in around mid-1999.  According to the land search record of House 117, although a building licence was issued in November 1998, the Letter of Compliance which allowed the defendants to occupy the house was only issued on 8 January 2001.  The plaintiffs argued that this was around the time when Fence 2 was erected along the western edge of the Part 2 land. 

4.18  In my view these matters do not assist the plaintiffs.  The fact that the Letter of Compliance was only issued in 2001 does not affect the defendants’ case when the contemporaneous evidence and the context of the case are properly considered.  

4)  No retrial

4.19  Although the Judge had not made findings on many issues in this case, this is not a case that calls for it to be remitted to the Judge for reconsideration.  Based on the totality of the evidence, this Court is in as good a position as the Judge to make findings of fact in favour of the defendants. 

V. Conclusion

5.  Accordingly, the appeal is allowed, the judgment below in favour of the plaintiffs is set aside, the plaintiffs’ claim against the defendants is dismissed and a declaration that the plaintiffs’ title to the Part 2 land is extinguished and the defendants have acquired a possessory title to the Part 2 land is granted.

VI.  Costs

6.  The defendants are entitled to the costs of the appeal and below with certificate for two counsel.

Hon Kwan JA :

7.  I agree entirely with the Reasons for Judgment of Cheung JA, which I have read in draft.  I wish only to add these observations.

8.  In the court below, it was argued by the plaintiffs that in determining whether the defendants had a sufficient degree of exclusive physical control of the Part 2 land so as to amount to obtaining factual possession before 3 August 2000, the court should have regard to five questions, of which four were mentioned by the judge in paragraph 27 of his judgment and set out by Cheung  JA in paragraph  3.4 above. The judge agreed with the plaintiffs’ counsel that the defendants failed to adduce any evidence on any of the four questions he mentioned.

9.  The judge however made no mention of the first of the five questions posed by the plaintiffs, which was whether the 2^nd defendant and his family had already moved into House 117 by 3 August 2000.  This would appear to be an important part of the plaintiffs’ case below as it was their contention that if by 3 August 2000 the 2^nd defendant and his family were still living elsewhere, it was inconceivable any of the defendants could have effective control over Part 2 at the material time.  On appeal, the plaintiffs raised this point in their supplementary respondents’ notice and relied on it heavily to support the judgment below on other grounds.

10.  It is unsatisfactory that the judge should make no mention of this point in his judgment.  As it is, the appeal court was left in the dark why he did not deal with it – whether he thought the point was irrelevant, or whether there was insufficient evidence to make a finding one way or other, or whether it was unnecessary to deal with it at all.  A trial judge is not expected to cover every point of contention in his judgment, but where a point is heavily relied on it is better that he should deal with it and if he took the view it was immaterial or unnecessary to the resolution of the dispute he should say so.

Hon Barma JA :

11.  I agree with the Reasons for Judgment of Cheung JA, and the further observations of Kwan JA, both of which I have read in draft.