LU XIAOHUA, the administratrix of the estate of WONG YIU CHUNG, deceased v. HAU SHUN CHI NELSON

DCCJ 287/2016

[2020] HKDC 606

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 287 OF 2016

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D E C I S I O N

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1.  On 27 March 2020, I handed down the judgment in this action. I found in favour of the plaintiff (by original action) and the defendant (by counterclaim) on her adverse possession claim. I granted the declaration that the title of the defendant (by original action) and the plaintiff (by counterclaim) in respect of the land in question has been extinguished pursuant to section 17 of the Limitation Ordinance.

2.  By summons dated 24 April 2020, the latter applies for leave to appeal against the judgment.  I shall adopt here the defined terms used in the judgment.

3.  Following the guidance laid down by the Court of Appeal in Tsang Wing Kwai v Tsang Wing Fai [2018] 5 HKLRD 350, [2018] HKCA 759 at para 24, I gave directions for the lodging of written submissions. Having read the submissions, I am satisfied that an oral hearing is not necessary and the summons is suitable for disposal on paper only.    

4.  The defendant puts forward five proposed grounds of appeal.    

Legal principles

5.  The principles governing the threshold for granting leave to appeal are not in dispute.  The applicant needs to show that the appeal has a “reasonable prospect of success” or there is some other reason in the interests of justice why the appeal should be heard: section 63A(2) of the District Court Ordinance, Cap 336.  A “reasonable prospect of success” means an appeal with prospects that are more than “fanciful”, without having to be “probable”: SMSE v KL [2009] 4 HKLRD 125 at para 17.

The first ground

6.  The first ground concerns my treatment and ruling in respect of Chun Chung’s oral evidence that if his father had known that Hau Tai Hong was the legal owner of the Land, his father would have approached Hau for a lease of the Land: see para 146 of the judgment.  I held, at paras 150 to 151, that Chun Chung’s statement goes against the general thrust of the fundamental facts established by Lu, it was his own speculation of what his father would have done and that speculation goes against the objective fact that the Wong family had been occupying the Land for a few decades without paying any rent or attempting to pay any rent.  I concluded that when the fundamental facts are considered together with Chun Chung’s statement, I am unable to find as fact that the Wong family were willing and ready to pay rent to Hau Tai Hong. Hence, the principle in Wong Tak Yue v Kung Kwok Wai (No 2) (199701998) 1 HKCFAR 55 is not engaged.  Chun Chung’s statement does not negate the Wong family’s intention to adversely possess the Land.

7.  The defendant contends that my conclusion was wrong as I erred in not appreciating that the statement was the firm and unequivocal viva voce evidence of Chun Chung made voluntarily in cross-examination and that statement manifested the intention of Wong’s father to pay rent.  The fact that the Wong family had been occupying the Land for a few decades without paying any rent or attempting to do so per se were “only uses and pleaded uses of the land”.  The Wong family’s mere farming there was not “objective act as unequivocal manifestation, or manifestation of the intention to possess”.  Mr Billy NP Ma, counsel for the defendant, relies on Gotland Enterprises Ltd v Kwok Chi Yau CACV 260/2014, 19 January 2016, paras 36, 37, 39, 54 and 59.   For these reasons, he submits that Wong Tak Yue is engaged and this has the effect of negating the intention to possess the Land, thus defeating Lu’s adverse possession claim.

8.  When analysing Chun Chung’s statement, I took the approach that the evidence shedding light on the intention to possess must be considered on an overall basis.  I highlighted the fundamental facts which Lu has succeeded in establishing.  I set out these facts in para 147 of the judgment.  I also remarked in the following para that there was no suggestion that the Wong family had at any time taken any serious step to find out who the new owner was when enquiries could readily have been made and meanwhile they continued to farm on the Land in a way which excluded everyone else from using it and never paid any rent.  I also reminded myself that Chun Chung’s statement is a statement against self-interest and should be given considerable weight: see para 150.  It was upon an evaluation of all the relevant evidence that I concluded against the factual finding that the Wong family were willing and ready to pay rent to Hau Tai Hong.  

9.  It was a factual conclusion which I was entitled to reach on the evidence.  On that basis, Wong Tak Yue is not engaged on the facts.

10.  For the above reasons, the proposed ground has no reasonable prospect of success.

The second ground

11.  Under this ground, the defendant submits that I erred in failing to consider or have sufficient regard to the fact that it is Lu’s pleaded case that Wong’s father had obtained a possessory title to the Land, which was vested in his estate upon his death, and subsequently the beneficiaries agreed to give the same to Wong.  For that pleaded case to succeed, Mr Ma argues that Lu must rely on the alleged family agreement under which Wong was to inherit the Land, as set out in para 52 of the judgment.  However, on Lu’s own case, Sai Chung was not a party to that agreement.   Hence, the family agreement would not be effective to vest the possessory title in Wong for want of necessary party.  That being the case, the pleaded case must fail.

12.  Furthermore, in para 160, I held that “the Wong family as a whole” had been in exclusive possession of the Land.  In this ruling, the defendant contends that I erred in law by failing to have proper regard to the legal principle that in such a case, the title acquired is held by the squatters as “joint tenants”.  There is no evidence that Sai Chung, a member of the Wong family and hence one of the joint tenants, had passed his interest to Wong. For that reason, Wong cannot claim the title “alone”: Adverse Possession, Stephen Jourdan QC (2^nd ed) at paras 20-68.

13.  I do not agree with the defendant’s contention.

14.  In the judgment, I set out in paras 73 to 77 a summary of Lu’s case on the facts and in para 78 counsel’s submissions on how these facts would give rise to a claim for adverse possession.  In the end, I found in favour of Lu’s factual case.  I then held in para 142 that on the strength of these facts, the Wong family had been in exclusive factual possession of the Land.  The family should be treated as a single family on the issue of possession.  Relevantly, Wong’s parents, Chun Lan, Wong, Chun Chung and Lu were farming on the Land not as individuals with a view to excluding each other.  The unequivocal understanding among them must have been that the Land belonged to the family as a whole. 

15.  Lu’s case as set out above did not, and did not need to, turn on the family arrangement.   That case has been made out.  Accordingly, Lu succeeded in her claim based on that case.

16.  For the above reasons, the proposed ground of appeal has no reasonable prospect of success.

The third ground

17.  Under this ground, the defendant complains that I erred in not applying Gotland Enterprises and erred in not giving sufficient regard to the fact that there had been no sufficient fencing around the Land and that the Land was easily accessible by transport.  Accordingly, I erred in too readily holding that Winpo Development Ltd v Wong Kar Fu HCA 3541/1993, 26 May 2017 is a case directly in point.  I should have applied Gotland Enterprises and held that the lack of sufficient fencing showed that the Wong family did not have sufficient control or exclusive possession of the Land.

18.  I do not consider that the complaint is justified. 

19.  I quoted the test laid down in Gotland Enterprises in para 131 of the judgment, namely that in the absence of any physical barrier 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.  Later, in paras 139 to 141, I took into account the geographical layout of the Land, the nature of the neighbourhood, the practicability of putting up high fences and the general practice adopted by farmers in the area.  When everything was taken into account, I concluded that the keeping of short and simple fences was sufficient to establish exclusive occupation. 

20.  I arrived at that conclusion by applying the general principle laid down in Gotland Enterprises to the special facts and circumstances of the present case.

21.  Under this ground, Mr Ma also submits that Wong, Chun Lan and Chun Chung could easily travel to the Land after they had moved to work or live in other parts of Hong Kong.  This shows that the Land was easily accessible by transport. 

22.  In my view, the fact that the family members could and did travel to the Land from elsewhere is beside the point.  The submission overlooks the material facts in this case, namely that the footpath running next to the Land was the only access to it and the Land was not expected to be visited by anyone other than the two households and their visitors.  These are the factors which are directly relevant to the issue of fencing. 

23.  For the above reasons, the proposed ground of appeal has no reasonable prospect of success.

The fourth ground

24.  Under this ground, the defendant argues that I erred in holding that the presumption of encroachment was rebutted on the evidence.  First, I failed to appreciate that there is no evidence or testimony from the successors of Hau Fook Shui that they knew and accepted that the Land had been adversely possessed by the Wong family in their own right.  Secondly, as regards my ruling (in para 157) that it would be clear to Hau Fook Shui that the Wong family were occupying the Land independently of the lease in respect of Lot 214 RP and that they were not occupying it as an addition to Lot 214 RP, Mr Ma contends that that did not form part of Lu’s challenge or cross-examination against Hau King Wai.

25.  In the judgment, I proceeded on the basis that the presumption applied in the first place, without deciding whether it should or not.  I then held that the presumption was rebutted on the special facts of this case (para 156).  I set out the special facts in para 157.  These are objective facts made out on the evidence and corroborated by the conduct of the successor of Hau Fook Shu in the signing of the lease in respect of Lot 214 RP only (para 159).

26.  In my view, the challenge under this proposed ground has no reasonable prospect of success.

The fifth ground

27.  Under this ground, the defendant contends that I erred in too readily rejecting the defendant’s case in relation to the alleged licence arrangement concerning Lot 214A.  I failed to appreciate that Hau King Wai is an independent witness and there is no suggestion that he has any personal interest out of these proceedings.  I also failed to appreciate that in the 1970’s it was common for villagers and indigenous people in the New Territories to rely on oral arrangements.  I failed to consider that there was also a substantial change in Lu’s pleading concerning the intention over the use of Lot 214 RP.  I accepted Lu’s case too readily and in doing so erred in not bearing in mind that she has the burden to adduce compelling evidence to support her adverse possession claim. 

28.  It is a general complaint against my factual findings.  I set out my evaluation of the evidence in paras 111 to 125.  These formed the basis of my factual findings.  The alleged licence agreement was a main plank of the defendant’s positive factual case.  The objective fact was that it was not however raised until two years after the filing of the defence.  The court was entitled to take into account the delay when assessing the veracity of the allegation.  As far as Hau King Wai’s evidence is concerned, I dealt with it in para 125 of the judgment.  I had doubt about the accuracy and reliability of his evidence because his evidence related to a conversation which allegedly took place more than 40 years ago and which content did not concern him or his family.  These are legitimate reasons for harbouring doubt about a witness’s testimony.

29.  I do not consider that Mr Ma’s challenges against my factual findings are properly made out.  It follows that this proposed ground is not reasonably arguable.

Conclusion

30.  None of the proposed grounds of appeal enjoy any reasonable prospect of success.  There being no other reason why the appeal should be heard, I dismiss the defendant’s application seeking leave to appeal.  I also order that Lu do have costs of the application, with certificate for counsel, to be taxed if not agreed and that Lu’s own costs be taxed in accordance with the Legal Aid Regulations.