逸昇發展有限公司 v. 曾紀洲

DCCJ 3252/2014

[2024] HKDC 535

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3252 OF 2014

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J U D G M E N T

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1.  This is the judgment after the trial of the Plaintiff’s (“P”)  action to recover from the Defendant (“D”)  vacant possession of the land known as Block 9, G/F, 21B Peng Chau Wing On Street, Peng Chau, New Territories (the “Property”)  situated on the Remaining Portion of Peng Chau Lot No. 130 (“Lot 130 RP”)[1] and to claim mesne profits for his unlawful occupation of the Property. In answer to the P’s claims, D counterclaims for adverse possession of the Property[2] and the related consequential declaratory orders.

2.  Lot 130 RP can be traced back to Peng Chau Lot No. 130 (“Lot 130”). In late 1998, two discrete portions were resumed from Lot 130. After resumption, the remaining area was designated as Lot 130 RP.[3] The Property is about 268 m² and falls within the portion of Lot 130 RP close to Peng Chau Wing On Street with the Remaining Portion of Peng Chau Lot No. 131 separating the Property and Peng Chau Wing On Street.[4] Erected on the Property was a one-storey building.

3.  P has been the registered owner of the Property by an Assignment dated 18 February 1997 and Assignment dated 20 March 1997 (collectively as the “Assignments”).

4.  On 12 March 2024, Jiang Xiao Ling (“Jiang”), a director of P, filed a Summons seeking to intervene in these proceedings and/or be joined as the 2^nd Defendant in this action (the “Summons”). On 15 March 2024, after hearing Jiang[5] and D[6], I dismissed the Summons on the principal ground that Jiang on her own did not have an interest in a matter which was directly related to the subject matter of P’s property claim herein against D and did not involve a question or issue arising out of or relating to or connected with any relief or remedy claimed by P or counterclaimed by D.

5.  On 25 March 2024, P filed a Notice to Act in Person together with the 2^nd Affirmation of Jiang dated the same date (“Jiang’s 2^nd Affirmation”), stating that P has authorised Jiang and one Mr Chau Chi Chiu, a director’s assistant of P, to carry on the instant proceedings and to attend the trial from 26 to 28 March 2024 on behalf of P. Exhibited to Jiang’s 2^nd Affirmation are, inter alia, the original Written Resolutions passed by the Board of Directors of P on 23 March 2024 and the signed Authorisation to that effect.

6.  Since under Ord 5A, r 2(2)  of the Rules of the District Court (“RDC”), a corporation may carry on proceedings by one of its directors provided the requirements made thereunder are fulfilled, I only allowed Jiang to act for P in the present trial.

7.  At trial, P was represented by Jiang while D was represented by Mr Isaac Yung of Counsel.

8.  It is undisputed that P is the paper title owner and that the burden of proof is on D to establish his claim for adverse possession of the Property. After discussion with Mr Yung, Mr Yung agreed that D should open his case and call his witness first. During Mr Yung’s opening, I further explored from Mr Yung as to the use of documents contained in Trial Bundle (2), i.e. the Bundle of Documents, Mr Yung submitted that the documents in Trial Bundle (2)  are agreed as to their authenticity and the Court could give whatever weight it deems appropriate to the content of the documents therein.

9.  Pursuant to the Order made by Master B Mak dated 28 June 2023, the Expert Report was, subject to the direction of the trial judge, adduced as evidence without calling the maker thereof.[7]

10.  At trial, D and Jiang have given viva voce evidence.

A.  THE PARTIES’ RESPECTIVE CASES

A.1.  D’s case

11.  D’s pleaded case is as follows: -

(a)  D has been in actual physical occupation and possession of the Property for a continuous period of not less than 20 years since 1984.

(b)  In 1984, the Property was leased to D by one Madam Lai Ho (“Lai”)  at a monthly rental of HK$3,500.00 as a warehouse and workshop of D’s decoration company known as “世紀裝飾傢俱工程”, pursuant to a written tenancy agreement.

(c)  Lai told D that Lai’s father-in-law was a tenant of the Property (who had passed away)  and the Property was distributed to Lai’s family. Lai was therefore entitled to lease the Property to D. Prior to his occupation of the Property, the Property was leased to a bowl factory.

(d)  Lai came to the Property to collect rent from D every month. The rentals were paid by cheque made payable to Lai, or by cash.

(e)  The tenancy agreement was renewed every two years. D had altogether signed 4 to 5 tenancy agreements with Lai.

(f)  The monthly rental of the Property was later increased to HK$4,500.00 per month and D duly made the rental payments to Lai.

(g)  D has occupied the Property since 1984 and resided at the Property from 1984 to 1993. In 1993, D got married and moved out of the Property while the Property was still used and occupied by him for his decoration business. The key to the Property was and is held solely by D.

(h)  Since July 1995, Lai has not come to collect rent from D. D tried to locate and/or contact her for payment of rent but in vain. Since July 1995, D has not paid Lai or anyone any rent for his use and occupation of the Property.

12.  Based on the above pleaded facts, D’s primary case is that D’s physical occupation and possession of the Property have been adverse since August 1995 when the period covered by the last monthly payment of rent expired, and for a continuous period of not less than 12 years.

13.  D’s alternative case is that when Lot 130 RP was assigned to P, D was already in physical occupation and possession of the Property and that D has been in adverse possession of the Property vis-à-vis P since 18 February 1997 and/or 20 March 1997 (the dates when the Assignments took place)  and for a continuous period of not less than 12 years.

14.  It is further pleaded that D’s physical possession and occupation of the Property was open, uninterrupted and exclusive to the whole world and without any lease, licence, consideration and permission from anyone.

15.  During Opening, Mr Yung submitted that if the Court was not satisfied that D’s adverse possession began in August 1995, the Court might also consider whether D’s adverse possession of the Property started in 1997 when D openly asserted ownership of the Property on 2 occasions.

16.  By virtue of the above, D counterclaims against P for: -

(a)  a declaration that P has lost the right to bring any action to recover the Property or any part thereof by virtue of section 7(2)  of the Limitation Ordinance (“LO”);

(b)  a declaration that by virtue of section 17 of LO, P’s title to the Property has been extinguished in favour of D, and D has acquired a squatter’s title and all the right, title and interest including the ownership and the right to exclusive physical possession and occupation of and in the Property; and

(c)  an Order that all the estate, right, title, benefit and interest of and in the Property be vested in D.

A.2.  P’s case

17.  P’s case is straightforward. In P’s Reply and Defence to Counterclaim filed herein, P has denied the following: -

(a)  D has been in actual physical occupation and possession of the Property for a continuous period of not less than 20 years since 1984. D has occupied the Property since 1984 and resided at the Property from 1984 to 1993. After D got married and moved out of the Property in 1993, the Property was still used and occupied by him for his decoration business. The key to the Property was and is held solely by D.

(b)  The Property was leased to D by Lai as a warehouse and workshop of D’s decoration company.

(c)  D has been in adverse possession of the Property since August 1995 or 18 February 1997 or 20 March 1997 and for a continuous period of not less than 12 years.

18.  In P’s Reply and Defence to Counterclaim filed herein, P has averred the following: -

(a)  D only came into occupation of the Property in or about 2002. Before the said year, the Property was vacant and the structure erected thereon had always been dilapidated.

(b)  Prior to about 2003, 蔡厚安堂 (the “Tong”)  was the tenant of Lot 130 RP together with Peng Chau Lot Nos. 149, 191 (the Remaining Portion thereof), 253 and 273 (together, the “Lots”)  (including the Property). The Tong was responsible for sub-letting the Lots and collecting rents from sub-tenants of the Lots, and this remained the case after P acquired Lot 130 RP in 1997. The Tong ceased to be the tenant of the Lots in 2003 only.

(c)  Neither Lai nor D had been a sub-tenant of the Tong at all.

B.  THE EXPERT REPORT

19.  The remit of the Expert Report was: -

(a)  to search for boundary information and the aerial photos in respect of Lot 130 RP and extract therefrom the occupation/‌encroachment information of the Property from 1995 to 2022 (for a duration of 28 years);

(b)  to carry out site survey to determine the precise boundaries of the Property and identify the access roadway(s)  leading to and from the Property in the survey plan(s); and

(c)  to interpret the status of occupation/‌encroachment and access roadway(s)  for 28 years from the aerial photos.

20.  I don’t think it is necessary for me to refer to the lengthy aerial photos interpretation results and study of old survey sheets. They can be found in section 7 of the Expert Report at Trial Bundle (1)/78-92 inasmuch as concerns the aerial photos interpretation results, and section 8 of the Expert Report at Trial Bundle (1)/92-94 inasmuch as concerns the study of old survey sheets.

21.  In summary[8]: -

(a)  From 1995 to 2023, pitched roof old houses appeared in all aerial photos taken between 1995 and 2022. The southern old houses still existed on ground during site visit while the old house in the northernmost portion had been refurbished. It was verified in the expert’s recent ground survey that the refurbished house was still at the original position of the old structures.

(b)  From 1995 to 2023, roadway in the form of footpath could be partially seen in all the aerial photos throughout the 28-year period. It could be firstly seen on the 1996 aerial photo, which connected with another longitudinal running footpath at the east of Lot 130 RP. Since construction of Chi Yan Street in 2000, this footpath seems to be widened to the present situation as clearly observed on the 2008 aerial photo.

21A.  The opinion as stated in the Expert Report and the expertise of its compiler have not been challenged by P and D. I accept the opinion stated in the Expert Report and attach weight to its findings.

C.  PARTIES’ RESPECTIVE EVIDENCE

C.1.  D’s evidence

22.  In relation to the D’s case, D is the only witness and has adopted his Witness Statement dated 29 August 2022 as his evidence in chief. Jiang has cross examined D and I have also asked D some clarificatory questions. In a nutshell, D’s evidence is as follows.

23.  D came to Hong Kong with his parents at the age of 2, and was educated to Form 3 level. After D left his secondary schooling, he has been trained and worked as a renovation worker.

24.  All along, D has been living in Peng Chau, New Territories.

25.  Prior to renting the Property from Lai, D had rented a 鐵籠屋 in Lot 130 for two years. D then learnt that the Property was available for renting since the previous tenant of the Property had moved out.

26.  Through Lai, D knew that Lai’s father-in-law was the tenant of the Property. After the landlord of the Property left Hong Kong without ever returning, Lai’s father-in-law had obtained the Property. When Lai’s father-in-law passed away, the Property was distributed to Lai. D did not know who the landlord of the Property was, but he had the impression that Lai was the landlord. According to D, Lai had a lot of properties in Lot 130 for letting out purpose.

27.  Prior to the letting out of the Property to D, the Property was leased to a bowl company.

28.  In 1984 when D was 26 years old, he rented the Property from Lai for a monthly rental of HK$3,500 as warehouse and workshop of his company “世紀裝飾傢俱工程” (Century Decoration Shop)  (the “Company”). The Company has applied for business registration and filed tax returns, but D has not discovered the Company’s business registration certificate in the instant proceedings. D has adduced various invoices and quotations of the Company, showing that the Company’s name was later changed for several times to “世紀裝飾公司” (Century Decoration Co.), “裝修舖” (Chuang Hsiu Pu Decoration Co)  and “紀洲工程” (Kei Chau Decoration Co).

29.  The invoices issued by 世紀裝飾傢俱工程 in 1986 did not set out its business address, but only stipulated its radio pager no.[9] The invoices issued by 世紀裝飾公司 in 1986 and 1987 stipulated Rm. 1406 Tung Ming Bldg., 40-42 Des Voeux Rd. C. H.K. as its business/‌correspondence address.[10] The invoices and quotations issued by 裝修舖 in 2001 to 2009 stipulated the Property as its business/‌correspondence address.[11] A quotation issued by 紀洲工程in 2014 stipulated “G/F, no 11 Wing On Side Street, Peng Chau, H.K.” (the “Wing On Side Street Address”)  as its business/‌correspondence address.[12] D explained that the Wing On Side Street Address was the shopfront whilst the Property was the warehouse and workshop.

30.  Also, Fu Lee Decoration Company (o/b Hang Fat Industries Limited)  issued D a monthly statement on 15 May 2006 and an invoice on 17 July 2006 at the Property.[13]

31.  The tenancy agreement between Lai and D would be renewed once every two years. To the best of D’s recollection, D and Lai had renewed the tenancy agreement for 4 to 5 times, and the monthly rental payment was later increased to HK$4,500. During the tenancy, Lai came to the Property between 1^st and 5^th day of each month to collect rent from D and D paid the rent by cheque or cash. After Lai received the rent from D, Lai would issue a rental receipt to D on each occasion.

32.  D, however, has not produced any tenancy agreements or any rental receipts. Whilst acknowledging that the rental receipts could be used for claiming profits tax deduction in the tax returns, D explained that tenancy agreements and rental receipts had been destroyed by rain water and termites when they were kept in the Property, and thereafter disposed of as waste by his workers when his workers cleaned the Property annually. After the 5^th tenancy agreement, no further written tenancy agreement was entered into and Lai only came to the Property to collect rent monthly.

33.  Due to water seepage, the roof of the Property was repaired once in 1990.

34.  Prior to D’s marriage in 1993, D resided in the Property. After marriage, D moved out of the Property, but has continued to occupy and use the Property as warehouse and workshop for his decoration business. Upon questioning, D explained that he moved out in 1993 because the Property was not suitable for family living.

35.  In or around 1995, D erected a gate to replace the wooden door at the entrance of the Property located at Wing On Street (the “Gate”). D possesses the key to the Gate. D identified the Gate in the photos at Trial Bundle (2)/123 and 130 [14].

36.  Since July 1995, Lai has no longer come to the Property to collect rent. D tried to call Lai, but in vain. Since July 1995, D continued occupying and using the Property for his decoration business and treated the Property as his own property. Further, without D’s consent, no one else could enter the Property.

37.  D claimed that he had the intention to treat the Property as his since July 1995, when Lai did not come to collect rent. D explained why he had such an intention: Lai did not collect rent, no one else cared for and managed the Property and he had used the Property to date with no one preventing him from doing so and claiming that the Property was his/hers.

38.  D has been responsible for paying electricity bills in respect of the Property. D adduced a letter from CLP Power Hong Kong Limited (“CLP”)  dated 12 October 2021, stating that D has opened an electricity account with CLP since 21 December 1990 regarding the use of electricity at the Property (the “12/10/21 Letter”). As to why the electricity account record does not go all the way back to 1984, the year D claimed to have started occupying and residing in the Property, D explained that he had called CLP and a CLP staff told him over the phone that CLP computer only displayed record up to 21 December 1990 which was the earliest record.

39.  D has not paid government rates in respect of the Property. D explained that he did not receive any government rates bills since they were all sent to the landlord at the time, not to D.

40.  There were two events happening in 1997 highlighted by D in his evidence. The first event took place in 1997, on a day when a stranger came to the Property and asked D to sign a document acknowledging that D was a tenant of the Property. The stranger told D that he was the landlord. D responded by claiming that he was the landlord and asked the stranger for proof of ownership of the Property. The stranger then left the Property and has never returned to the Property. In D’s Witness Statement, D made no mention of D claiming in front of the stranger that he was the landlord, but at trial D said he recalled himself saying so.

41.  The second event was a meeting organised by CLP at Peng Chau Municipal Services Building in 1997 with people living in the vicinity of the Property to discuss electricity supply. During the meeting, a stranger claimed that he was the landlord of Wing On Street and thereabouts, and requested CLP to cease electricity supply. D immediately stood up and told the stranger “你咩咩喺業主？我哋呢到個個都係業主！” (translated as “Who are you as landlord? All of us here are landlords!”)  As to the meaning and intention of using this statement, D, upon questioning, explained that once he made the foregoing claim, no one objected to it. D simply wanted the stranger not to pretend to be the landlord, and the statement was a reaction and response to a stranger claiming himself to be the landlord, despite him not knowing whether everyone in the meeting was indeed the landlord of his/her property. The stranger has not responded. Eventually, CLP continued to supply electricity to Wing On Street and thereabouts.

42.  Prior to P’s commencement of this action on 22 August 2014, P had not taken any action against D for recovering possession of the Property.

43.  During the pandemic between July 2020 and December 2021, D renovated the 600 square feet area in the Property’s entrance (the “Entrance Area”)[15] into a place for human accommodation. After renovation, D and his family moved into the Property and resided there. Upon further probing, D explained that the Entrance Area was not the workshop, but just the entrance to the workshop.

C.2.  P’s evidence

44.  Jiang was P’s only witness. Jiang has adopted her Witness Statement dated and filed on 31 August 2022 as evidence in chief and was cross examined by Mr Yung.

45.  According to Jiang’s Witness Statement, the Property was only leased to the Tong prior to 2003, and D only moved into the Property in 2002. P has repeatedly asked D to leave the Property but in vain.

46.  Jiang, however, has not produced any contemporaneous documentation showing the lease arrangement with the Tong, any rental receipt, or indeed any documentation substantiating her claims.

47.  Moreover, Jiang was only appointed as a director of P on 26 March 2018. Jiang admitted that she had no personal knowledge of events happening prior to her appointment as a director of P.

48.  Jiang further acknowledged that she had no personal knowledge of her claims made in the Witness Statement, nor was she able to verify such claims.

D.  LEGAL PRINCIPLES

49.  Section 17 of LO provides that at the expiration of the period prescribed by LO for any person to bring an action to recover land, the title of that person to the land shall be extinguished. The current relevant period of limitation to bring an action to recover land is 12 years. This has been the position since 1991 by reason of the Limitation (Amendment)  Ordinance 1991. Prior to that, the period was 20 years.

50.  The principles concerning adverse possession are well established. A useful summary can be found in Tsang Foo Keung v Chu Jim Mi Jimmy [16], in which Harris J (with whom Cheung JA and Yuen JA concurred)  held: -

“22. Before explaining the Judge’s reasons for rejecting the 1^st defendant’s case it will be helpful to summarise the basic principles of adverse possession: -

(1)  If the law is to attribute possession of land to a person who can establish no paper title to it, he must be shown to have had both factual possession during the relevant period (in the present case 20 years as the alleged possession occurred prior to 1991)  and the requisite intention to possess.

(2)  What constitutes a sufficient degree of exclusive physical control depends on the circumstances of the case and, in particular, the nature of the land and the manner in which land of that nature is commonly enjoyed. What must be shown is that the alleged possessor has been dealing with the land as an occupying owner might expect to deal with it.

(3)  The requisite intention is to exclude the world at large, including the owner, from the land so far as is reasonably practicable and so far as the law allows.

(4)  The person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention. Although the standard of proof is still the normal civil standard, ie on the balance of probabilities, commensurate with the serious consequences of finding that the holder of the paper title has been disposed the evidence of exclusive possession and intention must be compelling. It cannot be lightly assumed that the paper title holder has foregone his interest in land.

(5)  Evidence of subjective intent should be approached with caution. Intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use. …”

51.  In an adverse possession case, the registered owner is entitled to take the position of requiring the squatter to prove the adverse possession claimed by him. The registered owner is entitled to rely upon the paper title. The registered owner may test the squatter’s case and is entitled to judgment if the squatter fails to discharge the very high burden of proof required in establishing a possessory title. See Birkenhead Properties and Investments Ltd v Lam Kai Man [17].

52.  The fact that the claimant for a possessory title has proved that he has exclusive possession of the land in question has significance in relation to both the requisite possession and the requisite intent to possession. Having physical barriers to exclude others from entering the land is the classic way of establishing exclusive possession. In Gotland Enterprises Ltd v Kwok Chi Yau and Others [18], Lam VP (as he then was)  said: -

“29. [counsel] referred us to Powell v McFarlane, supra, in particular what Slade J said on the factual aspect of possession:

“Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor 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.”

…

31. … [counsel] also referred us to the dicta of Lord Hutton in JA Pye (Oxford)  v Graham [2003] AC 419 at paragraph 76:-

“Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess. It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess. But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded.”

32. Though the issue that Lord Hutton addressed there was intention to possess (and Lord Browne Wilkinson did explain why it was necessary to have two elements in the concept of possession as a matter of common law in JA Pye (Oxford)  v Graham, supra at paragraph 40), it should also be recognized that the two elements are inter-related. Legal possession could only be established when both elements are present. In our judgment, the exclusion of other persons has significance both in relation to the character of the physical occupation and the requisite intent. Thus, in Powell, Slade J alluded at the end of the paragraph cited above to no-one else had done so. Likewise, Lord Hutton in JA Pye referred to using the land in a way in which the owner was excluded.

33. This is not to re-introduce the concept of ouster disavowed by Lord Browne-Wilkinson in JA Pye at paragraph 38. Rather it stems from the undoubted proposition that possession is single and exclusive. As said by His Lordship in that paragraph:-

“Except in the case of joint possessors, possession is single and exclusive. Therefore if the squatter is in possession the paper owner cannot be. If the paper owner was at one stage in possession of the land but the squatter’s subsequent occupation of it in law constitutes possession the squatter must have ‘dispossessed’ the true owner …”

34. After rejecting the notion that the squatter must have a positive intention to exclude the owner, at paragraph 43 of JA Pye Lord Browne-Wilkinson endorsed the formulation by Slade J in Powell:-

“… Slade J reformulated the requirement (to my mind correctly)  as requiring an ‘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.”

35. The significance of physical exclusion of the owner was further alluded to by His Lordship at paragraph 45, after rejecting the dicta of Bramwell LJ in Leigh v Jack 5 Ex D 264:-

“The highest it can be put is that, if the squatter is aware of a special purpose for which the paper owner uses or intends to use the land and the use made by the squatter does not conflict with that use, that may provide some support for a finding as a question of fact that the squatter had no intention to possess the land in the ordinary sense but only an intention to occupy it until needed by the paper owner. For myself I think there will be few occasions in which such inference could be properly drawn in cases where the true owner has been physically excluded from the land. But it remains a possible, if improbable, inference in some cases.” (our emphasis)

36. One must not lose sight of the exclusive character of the occupation in order to establish factual possession. Not every use or occupation of land can satisfy this requirement. The Judge gave the example of growing of fruits on a piece of open land. If a person only plants fruit trees without excluding others from entering the land, he is only using the land instead of occupying the same exclusively. It is akin to leaving some articles on some private property (where the owner is at liberty to take steps to remove the articles as abatement of trespass)  and no matter how long the articles were left there (and not removed by the owner of the land), it would not constitute adverse possession.

37.  Though it is not absolutely essential to have the land fenced off in order to establish exclusive occupation, this is the classic way of doing so. In the absence of any physical barriers set up to exclude others from entering the land, one must examine what steps were taken by the person claiming exclusive occupation to exclude others.”

53.  In respect of evaluating the evidence given by witnesses, guidance can be found in Lee Fu Wing v Yan Po Ting Paul [19], in which DHCJ Au (as he then was)  said: -

“53. In assessing the credibility of a party’s case on a particular issue, I accept the submissions of [counsel] that the Court should take into considerations the following:

(a)  Whether the party’s case is inherently plausible or implausible;

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

(c)  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. This is relevant to the assessment of his overall credibility; and

(d)  The demeanour of the witnesses.”

54.  In Taishin International Bank Co Ltd v QFI Ltd [2020] HKCFI 2116, DHCJ Paul Lam SC set out the general principles that the court should apply in assessing the credibility of a witness; in particular, at para 14:

“14. In Simetra Global Assets Ltd & Another v Ikon Finance Ltd [2019] EWCA Civ 1413, Males LJ of the English Court of Appeal stressed the importance of contemporaneous documents at §48:

  "In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party's internal documents including emails and instant messaging. Those tend to be the documents where a witness's guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence.”

E.  ANALYSIS

55.  The burden of proving both exclusive physical control and the requisite intention is on D. It is trite that although the standard of proof is still the normal civil standard, the evidence of exclusive possession and the animus possidendi (i.e. “adverse” intention)  must be compelling. The Court is also reminded that evidence of subjective intent should be approached with caution and the intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use.

56.  In my discussion with Mr Yung during his oral closing, what D needed to establish to the Court’s satisfaction was D’s change of intention from one of possessing the Property as a tenant to one of possessing the Property with the intention to dispossess the whole world of the Property. In D’s Defence and Counterclaim filed herein, there are 3 alternative points of time pleaded which marks the beginning of the time when D started to harbour the “adverse” intention. The 3 alternative points of time[20] are as follows: -

(a)  August 1995; or

(b)  18 February 1997; or

(c)  20 March 1997.

57.  August 1995 is one month after Lai stopped coming to the Property to collect rent from D. 18 February 1997 and 20 March 1997 are the respective dates of the two Assignments when Lot 130 [21] together with other pieces of land in Peng Chau were assigned to P.

58.  The difficulty confronted by the Court is the lack of contemporaneous documentation (including photos)  showing D’s change of intention since any of the aforesaid alternative dates. It should however be remembered that the sparsity of documentation does not mean that the D’s case ought to be rejected. I am duty bound to do my best to assess his evidence. Notwithstanding this difficulty, has D, on the evidence before the Court, established to the requisite standard that he harboured the “adverse” intention in August 1995 or on any one of the other alternative dates? The relevant period for consideration is either August 1995 to July 2007 or roughly, 1997 to 2009. I do not accept Mr Yung’s submissions that apart from the case pleaded, the Court was required to consider whether prior to the commencement of the counterclaim by D, D had been in adverse possession of the Property for a continuous period of 12 years whatever the period it might be after August 1995. Although Mr Yung relied on Yu Siu Cheuk v Realray Investments Ltd, CACV 181/2009 (unrep, 10 November 2009 at [17], I do not accept that the Court of Appeal has gone to the length of holding that in the absence of a proper pleaded case, the Court needs to consider whether there is any continuous period of 20 or 12 years of adverse possession prior to the commencement of the claim for adverse possession.

59.  Jiang has given evidence for P. Jiang’s evidence is not helpful at all since she only became a director of P in 2018 and, admittedly, has no personal knowledge of the matters happened prior to her becoming the director of P. Furthermore, she was not able to explain to the Court the source of information when she gave evidence on matters which happened prior to her becoming a director. I give no weight to Jiang’s evidence.

60.  D has given evidence in Court. On the whole, his evidence was forthcoming and was unshaken. He mentioned the reason why he changed his intention to dispossess the whole world (including the paper title owner)  of the Property. He said that Lai did not come to the Property to collect rent, that no one else cared for and managed the Property and that he had used the Property to date with no one preventing him from doing so. Although D has not disclosed any photos showing that the Property has been used as workshop and warehouse since August 1995 and it would be very easy for him to do so (if he so wanted)  as the Property is still being used as the workshop and warehouse, I am not going to disbelieve D on this ground. I remember that there are invoices and quotations showing that D’s decoration business was using the Property as his business address from 2001 to 2009. The 12/10/21 Letter said that D has opened an electricity account with CLP since 21 December 1990 regarding the use of electricity at the Property. On balance, I accept D’s evidence.

61.  It is the D’s case that between 1995 and 2020, he had used the Property as warehouse and workshop for his decoration business. D relied on the following pieces of evidence to support the D’s case of animus possidendi.

(a)  The erection of the Gate in 1995 and he alone has kept the key to the Gate. Without a mention of which particular month in 1995 the Gate was erected, the fact that the Gate was erected by D is not capable of supporting whether D had changed his intention to adverse possession. D might have done it qua tenant on the Property. However, the continuous keeping of the key to the Gate which has provided the only entrance to the Property notwithstanding the expiry of the tenancy between D and Lai is in some way probative of D’s “adverse” intention.

(b)  The maintenance of an electricity account with CLP to supply electricity to the Property and the use of the Property’s address in the invoices and quotations of D’s decoration business from 2001 to 2009 are probative of D’s case that he continued using the Property as warehouse and workshop. In oral evidence, D said that he had been paying electricity bills for the Property.

(c)  As to the event of the meeting with CLP during which D managed to stop a stranger who claimed that he was the landlord of Wing On Street and thereabouts successfully requesting CLP to cease electricity supply, the verbal response by D: “你咩咩喺業主？我哋呢到個個都係業主！” (translated as “Who are you as landlord? All of us here are landlords!”)  is ambiguous as to whether D was asserting before people that he regarded himself as the owner of the Property. The verbal response can only be regarded as an outburst by D to resist the claim by the stranger.

(d)  Another incident in 1997 is about D’s refusal to sign a document brought to the Property by a stranger, acknowledging that D was a tenant of the Property. Putting aside whether or not D responded by claiming that he was the landlord and asked the stranger for proof of ownership of the Property[22], I accept that the act of D in refusing to give a written acknowledgment to the landlord (whether the stranger was truly representing the landlord or not)  that he was the tenant of the Property is probative of D having changed his intention to occupy the Property as adverse possessor since August 1995. If need be, I will also accept that he responded to the stranger by asserting that he was the landlord although in D’s Witness Statement, he only mentioned that he shouted at the stranger and evicted the stranger; it is not the case in his Witness Statement that he did not talk to the stranger. D might have omitted to mention this utterance in his Witness Statement.

62.  Based on the evidence accepted by this Court, I find the following: -

(a)  D has exclusive possession of the Property since August 1995; and

(b)  D has the requisite intention to possess the Property since August 1995.

63.  In view of my finding of facts, I find that the D’s primary case of adverse possession is established, i.e. D began dispossessing the owner of the Property in August 1995.

F.  DISPOSITION

64.  For the reasons given above, I give judgment to D and make the following declarations: -

(a)  a declaration that P has lost the right to bring any action to recover the Property as particularly shown, identified and coloured yellow in the Lot Index Plan attached to the Expert Report under Appendix A, or any part thereof by virtue of section 7(2)  of LO;

(b)  a declaration that by virtue of section 17 of LO, P’s title to the Property has been extinguished in favour of D; and

(c)  an Order that D has acquired and is entitled to a possessory title to the Property.

65.  I dismiss P’s claim.

66.  Costs should follow the event, with a certificate for counsel. Accordingly, I shall make the following costs order nisi: Costs of these proceedings (P’s claim and D’s counterclaim)  be paid by P to D, with a certificate for counsel, to be taxed if not agreed.

67.  Any future application for variation of the costs order nisi (if there is one)  shall be made within 14 days after the date of this judgment and shall be dealt with on paper. The applicant shall lodge with the Court and serve on the other party a not more than 5-page long written skeleton submission within 14 after the application for variation is made, and thereafter the other party shall lodge with the Court and serve on the applicant a not more than 5-page long written submission in reply.