WONG LEI AH v. LEE JIM WING

HCA 970/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 970 of 2015

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JUDGMENT

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Introduction

1.  These proceedings concern the property known as Flat D on 6^th Floor in Block 5 of Balwin Court and the Car Parking Space No 94 on the Ground Floor of Balwin Court, Nos 154 – 164 Argyle Street, Kowloon, Hong Kong (“the property”).

2.  The main dispute between the parties is whether the plaintiff (“P”) has been in adverse possession of the property for the requisite period so as to acquire a possessory title to the property. 

3.  The defendant (“D”) who is presently 76 years old is and was, at all material times, the registered owner of the property.

4.  P is a married woman who is presently 70 years old.  She changed her name from Wong Yuk Ling to Wong Lei Ah by deed poll dated 29 June 1996.

5.  In 1977 Balwin Court was a new residential development in Argyle Street, Kowloon.

6.  By a tenancy agreement in Chinese dated 11 July 1977 (“the T/A”) entered into between D as the landlord and P as the tenant, D agreed to let the property to P for a period of 3 years from 10 July 1977 to 9 July 1980 at a monthly rental of $1,800 and on the terms and conditions contained therein.

7.  P and D signed the T/A on 11 July 1977 at the property.  A cheque for $3,600 (“the cheque”) being 2 months’ rental deposit was given by P to D at the time the T/A was signed.  

8.  At the time the T/A was executed, D also gave P details of his bank account number 10-71-00-03356-5 with the Chase Manhattan Bank (“the bank account”) which he had opened for the sole purpose of collecting the rent he would receive on letting out the property.  P was asked to and did agree to pay the rent into the bank account.

9.  A set of keys to the property was also given by D to P at the same time.

10.  There is no dispute that P moved into the property with her furniture and lived there and used the car park after 11 July 1977.  P went to Singapore for about 3 weeks as her husband was living and working there in the construction industry.  It matters not whether she went to Singapore for about 3 weeks before or after she moved into the property.

11.  The cheque that P gave to D for the rental deposit was dishonoured on presentation for payment. 

12.  The above facts are undisputed.

13.  What is in dispute is whether P did subsequently pay D the rental deposit of $3,600 and the monthly rental of $1,800.  P said that these were paid into the bank account.  This is denied by D.

14.  On P’s case, she had been paying the monthly rent of $1,800 into the bank account for about 2 years until the time when she was told by the Chase Manhattan Bank in 1979 that the bank account was closed. She was unable to make any further rent payments to D as she did not know how to contact him.  She consulted solicitors and deposited a year’s rent with them and asked them to contact D to collect the same.  She said that the solicitors were unable to contact D and they returned the monies to her.

15.  P’s case is that she has been in adverse possession since about mid 1980 when the fixed term of 3 years under the T/A expired.  Her case is that D’s right of action to recover the property started to run from that time and that, as the requisite period of limitation had expired before the commencement of these proceedings, D’s title has been extinguished under the Limitation Ordinance (Cap 347).  On her case, she has acquired a possessory title to the property by reason of her adverse possession.

16.  D’s case is that the rental deposit and the rent for the property was not paid by P.  As he was of the view that it was useless to keep the bank account, he closed the bank account in 1979.  D’s pleaded case is that P has been staying at the property under an express or implied licence. In her closing submissions, however, Ms Tang, for D, made it clear that D was no longer relying on an express licence.

17.  D denies that P has been in adverse possession of the property as alleged by P.

The agreed issues

18.  The agreed issues are:

(1)   Was the T/A dated 11 July 1977 made between P and D a valid tenancy agreement?

(2)   If the T/A was not a valid tenancy agreement, then was there a licence granted by D to P as alleged by D?

(3)   If the T/A was a valid tenancy agreement, can P prove the physical possession (factual possession) and the requisite intention to possess (animus possidendi) the property for the requisite 20 years before the commencement of these proceedings?

19.  It is also agreed that if issue (3) is resolved in P’s favour, she would be entitled to a declaration that she has acquired a possessory title to the property, and that if issue (3) is resolved in D’s favour, D would be entitled to an order for vacant possession of the property with mesne profits.  Mesne profits have been agreed in the monthly sum of $18,000 from 6 August 2015, being the date of D’s defence and counterclaim, until the date of delivery of vacant possession of the property to D.

The witnesses

20.  I heard evidence from P and D.  Both P and D were giving evidence of events which took place decades ago and it is not surprising that they are unable to recall all the events in detail because of the long lapse of time.  I have taken this and their ages into account when considering their evidence.  I have accepted parts of each witness’s evidence and I have also rejected parts of their evidence.

The applicable principles

21.  The applicable principles on adverse possession are well settled. 

22.  Section 17 of the Limitation Ordinance (Cap 347) (“the Ordinance”) provides that at the expiration of the period prescribed by the Ordinance for any person to bring an action to recover land, the title of that person to the land shall be extinguished.

23.  The present period of limitation to bring an action to recover land is 12 years (section 7(2) of the Ordinance) which was reduced from 20 years by reason of the Limitation (Amendment) Ordinance 1991.  Prior to that, the period of limitation was 20 years.  It is agreed by the parties that the relevant period of limitation for the purposes of P’s claims is 20 years.

24.  To prove adverse possession, 2 separate elements have to be shown:

(a)   a sufficient degree of factual possession in the sense of physical control; and

(b)   an intention to possess (animus possidendi).

The burden of proving the 2 separate elements is on the person claiming adverse possession.

25.  The evidence necessary to establish adverse possession must be compelling (see Chan PJ in Wu Yee Pak v Un Fong Leung & others (2004) 7 HKCFAR 498 at para 5).

26.  It is clear that whether a squatter could establish factual possession and the requisite intention to possess for the purpose of adverse possession is a question of fact depending on the circumstances of the case (per Kwan JA in Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464 at para 11). 

27.  As was held in Wong Tak Yue v Kung Kwok Wai & another (No 2) (1997–98) 1 HKCFAR 55, a person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess.  The question of intention to possess was one of fact.

28.  It is the intention of the squatter that matters.  As Li CJ said in Wong Tak Yue at p 68:

“ As Nourse LJ pointed out in Buckinghamshire County Council v Moran [1990] Ch 623 at p.644, adverse possession can be described as ‘possession as of wrong’ and with limitation it is the intention of the squatter that is essential.”

29.  Li CJ went on to say in Wong Tak Yue at pp 68 – 69:

“ The requisite intention to possess has been referred in various authorities under its Latin tag ‘animus possidendi’. I shall refer to it simply as the intention to possess. As Slade J observed in Powell v McFarlane (1979) 38 P & CR 452 at pp.471–472, the intention to possess requisite for adverse possession:

… 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 process of the law will allow.

The question of intention to possess, as with any other question of intention, is one of fact.  Whether it can be established depends on an assessment of all the circumstances in a particular case.”

30.  Slade J (as he then was) emphasized in Powell v McFarlane (1979) 38 P & CR 452that clear and affirmative evidence is required that the trespasser not only had the requisite intention to possess, but made such intention clear to the world.  Slade J said at p 472:

“ The question of animus possidendi is, in my judgment, one of crucial importance in the present case. An owner or other personwith 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 tothe world. If his acts are open to more than one interpretation andhe 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.”

31.  It is plain that where the person claiming adverse possession has made self-serving statements as to what his intention was, such self-serving statements should be viewed with scepticism unlike statements which are made against his interest which would be accorded considerable weight.  As to this, Li CJ said in Wong Tak Yue at p 69:

“ Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism. The courts would scrutinise the circumstances in which they were made and would give them such weight if any as they may deserve. Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.”

32.  Slade J in Powell also addressed the question of self-serving statements in his judgment at p 476 when he said:

“ I would add one further observation in relation to animus possidendi. Though past or present declarations as to his intentions, made by a person claiming that he had possession of land on a particular date, may provide compelling evidence that he did not have the requisite animus possidendi, in my judgment statements made by such a person, on giving oral evidence in court, to the effect that at a particular time he intended to take exclusive possession of the land, are of very little evidential value, because they are obviously easily capable of being merely self-serving, while at the same time they may be very difficult for the paper owner positively to refute. …”

33.  The adverse possessor must show that he had a plain and unequivocal intention to exclude the world at large including the paper title owner.

34.  In Tsang Foo Keung & another v Chu Jim Mi Jimmy & others [2015] 6 HKC 200 Chow J said at para 44:

“ In relation to the element of ‘intention to possess’, the adverse possessor must show that he had a ‘plain and unequivocal intention to exclude the world at large’ (Bolton Metropolitan Borough Council v Musa Ali Qasmi (1998) 77 P & CR D36, at 37 per Peter Gibson LJ). In that case it was also pointed out that it is not necessary for the adverse possessor to give evidence of his subjective intention. ‘Such self-serving evidence is hardly ever likely to be of assistance. The ordinary way in which the relevant intention is ascertained is by inference from the actions of the adverse possessor in the light of all the circumstances affecting the land.’”

35.  The requisite intention of the adverse possessor to possess must be manifested and proved.

36.  in Hong Kong Kam Lan Koon Limited v Realray Investment Limited (HCA 15824/1999, 11 October 2007), Lam J (as he then was) when dealing with the requisite intention to possess said at para 90:

“ Intention has to be manifested and proved. In Pye[1]Lord Hope said at para.70,

‘ But acts of the mind can be, and sometimes can only be, demonstrated by acts of the body. In practice, the best evidence of intention is frequently found in the acts which have taken place.’

To the same effect is the dictum of Sachs LJ in Tecbild Ltd v Chamberlain (1969) 20 P & CR 633 at p.643,

‘ In general, intent has to be inferred from the acts themselves.’”

37.  It is also important to bear in mind that the trespasser’s acts must be unequivocal.  

38.  In Mayor & Burgesses of the London Borough of Lambeth v Blackburn (2001) 82 P & CR 494 it was held that the trespasser’s acts must be unequivocal, such as to make it clear to the owner, if he was present at the land, that the trespasser intended to exclude him as best he can.  It is because of the need for the trespasser’s acts to be unequivocal and manifested to the true owner that the question of whether the trespasser had the necessary intention is to be inferred from the acts themselves.

39.  After referring to what Slade J said in Powell, Clarke LJ said in Lambeth at para 20:

“ It is thus of crucial importance that the trespasser’s acts must be unequivocal. They must make it clear to the owner, if present at the land, that he intended to exclude the owner, as Slade J. put it ‘as best he can’. To similar effect Slade J. said (at p.480):

‘ In view of the drastic results of change of possession, however, a person seeking to dispossess an owner must, in my judgment, at least make his intentions sufficiently clear so that the owner, if present at the land, would clearly appreciate that the claimant is not merely a persistent trespasser, but is actually seeking to dispossess him.’”

And at para 21, Clarke LJ said:

“ It is I think because of the need for the acts of the trespasser to be unequivocal and manifested to the true owner that the courts have tended to say that whether the trespasser had the necessary intention is to be inferred from the acts themselves.”

40.  Each case, of course, depends on its own facts.

The evidence and findings

41.  There is no dispute that D placed an advertisement in 1977 in a newspaper for a tenant to rent the property.  P responded to the advertisement by telephone.  Terms were agreed by P and D over the telephone.

42.  P and D then met at the property on 11 July 1977 where the T/A in duplicate was signed by P and D.  At that time, the description of the property and D’s name and contact telephone number had already been typed in English in the Chinese T/A as shown in Exhibits P1 and D1. The receipt for the deposit payable had also been typed in English at the back page of the T/A.

43.  There is also no dispute that at the same time P gave D the cheque for $3,600 being 2 months’ rental deposit and D signed the receipt for the deposit at the back page of the T/A confirming that he had received the rental deposit.  It is also undisputed that D gave P his bank account details so that the monthly rent of $1,800 to be paid by P could be deposited by her into the bank account. 

44.  A set of keys to the property including the key for the mail box was also handed over to P by D at that time.

45.  It is also undisputed that on 12 July 1977 D took the T/A to the Stamp Office from stamping.  This is confirmed by the stamp shown in exhibit D1, the signed copy of the T/A which was retained by D.

46.  The cheque for the deposit was dishonoured upon presentation for payment.  D presented the cheque for payment on 2 occasions. 

47.  According to the contemporaneous documents from the Bangkok Bank Ltd contained in the Agreed Bundle of Documents (“B”), the cheque was returned on 16 July 1977 with the reason given as “refer to drawer” (at B91), and again on 30 July 1977 with the reason given as “insufficient funds” (at B93).  P said in evidence that she was certain that the cheque was dishonoured because there was a problem with her signaturebut the reason given by the bank for the return of the cheque on 30 July 1977was “insufficient funds”.  The contemporaneous documents do not support P’s evidence on this matter but, in my view, it matters not what the reason for the dishonour was.

48.  D wrote to P by letter dated 8 August 1977 informing her that the cheque was dishonoured and returned by the bank.  He asked her to contact him giving her his telephone number which was the same telephone number as that stated in the T/A.  He sent the letter by registered post and the certificate of posting at B96 confirms this.  P claimed in evidence that she did not receive the letter.

49.  There is no dispute that after the letter was sent, D went to the property and informed D that the cheque was dishonoured and that he did not receive a response to the letter that he had sent.

50.  In evidence, P said that she later deposited the rental deposit of $3,600 into the bank account.  She contradicted her pleading at para 3(3) of her reply and defence to counterclaim where it was pleaded that she paid “the sum of HK$3,600 in cash to [D] in lieu of the amount set out in the cheque”.  The said pleading contains P’s statement of truth.  In evidence, she said that the said averment in her pleading was incorrect and she maintained that she deposited the $3,600 into the bank account. 

51.  D said that after he had sent the letter to D about the dishonoured cheque he went to the property and spoke to P.  In his witness statement (at para 12) he said that she did not give him a positive response on the question of the bounced cheque.

52.  D also said in his witness statement (at para 13) that later on he went back to the property to discuss the matter with P.  However, there was a young couple there who answered the door and he could not locate P since then.  In evidence, he confirmed that he had not contacted P since then.

53.  Although she did not mention it in her witness statement, P also said that she paid D the first month’s rent in the sum of $1,800 in cash at the time the T/A was signed on 11 July 1977.  She said that she had a receipt for this but she was unable to produce the same.

54.  D did not remember having any cash transaction with P.  He denied that she gave him the first month’s rent in cash on 11 July 1977.  However, his recollection on this may not be reliable as he did also say that he did not remember if he received the rent from her or not.  He also said that he may have forgotten to ask her for the first month’s rent but he was not sure.  It seems to me that D was having difficulty recalling exactly what happened in July and August 1977.

55.  D was unable to produce the passbook for the bank account as he said that he had lost it.  Due to the long lapse of time, I accept that he may well have lost the passbook relating to the bank account.  There is, however, no documentary evidence to show how much was paid into the bank account.  D’s evidence was that P did pay some rent into the bank account on a few occasions but not the full rent of $1,800 per month.  He recalled that she paid him $1,200 on a few occasions but he could not remember how many.  He said that he closed the bank account because D had stopped paying rent into the bank account.

56.  I prefer the evidence of P to the evidence of D on the question of whether P paid the rental deposit into the bank account and also on the question of whether she subsequently paid rent into the bank account. 

57.  It is plain on the evidence that despite taking steps to send a registered letter to P about the cheque which was dishonoured, D had never sent a letter to P to demand outstanding rent from her at any time during the period of the tenancy under the T/A.  In my view, it is inconceivable that D, being a businessman, would not have chased after P for payment if in fact payment of rent was outstanding for the 2 years’ period that P said that rent was paid into the bank account.

58.  On these disputes of fact, I find that P did eventually pay the rental deposit of $3,600 into the bank account and that P did pay rent to D in the sum of $1,800 monthly into the bank account for about 2 years.  She stopped paying rent into the bank account after she was informed by the bank that the bank account had been closed by D.  I so find.

59.  P said that because of the closure of the bank account she was unable to pay any further rent to D.  She said that she tried to contact D at the telephone number in the newspaper advertisement but was unable to contact him.  She thought that it was the same telephone number as that recorded in the T/A. 

60.  As she was unable to contact D, P said that she instructed solicitors to help her pay the rent to D.  She said that she deposited monies equivalent to one year’s rent with the solicitors and gave them D’s contact number.  They were unable to find D and in mid 1980 the solicitors returned the monies to her, after deducting legal fees.  I do not believe P and reject her evidence on these matters. 

61.  There is no documentary evidence at all to support P’s evidence that she ever deposited one year’s rent with solicitors. On her evidence, she would have deposited one year’s rent in advance with the solicitors.  I do not believe her.  I do not believe that she would have set aside a year’s rent in advance and deposit the same with solicitors. 

62.  There is also no evidence as to what the solicitors did to try and contact D.  D’s telephone number as recorded in the T/A has been the same all these years.  I believe D and accept his evidence on this matter. 

63.  I would observe that P also said in evidence that she did not make any enquiry with the management office of Balwin Court as to the whereabouts of D.

64.  I would also observe that when her present solicitors issued the writ in these proceedings, the address of D stated in the writ was The Front Portion of The 1^st Floor, No 40 Gillies Avenue South, Hung Hom, Kowloon.  It does not appear that her present solicitors had any difficulty in locating D as they correctly stated his address in the writ.  The unchallenged evidence of D is that after he acquired the property he asked the Treasury to send all demands for rates to his address namely, 1/F, 40 Gilles Avenue, Kowloon.  That is the same address of D as set out in the writ issued by P’s solicitors, although it is stated more fully in the writ. 

65.  Be that as it may, it is clear on P’s evidence that she was quite prepared and willing to pay the unpaid rent to D under the T/A up to the time the monies that she said she had deposited with solicitors were returned to her.  On her evidence, this was in mid 1980.

Issue (1)

66.  As to issue (1), the question to consider is whether the T/A made between P and D dated 11 July 1977 was a valid tenancy agreement?

67.  D’s pleaded case is that, apart from the cheque P gave to D on 11 July 1977 for the rental deposit which was twice dishonoured on presentation for payment, no further payment was ever tendered by P to D (para 4(g) of the defence and counterclaim).  It is then pleaded at para 4(h) that:

“ As such, it is averred that there was no valid tenancy agreement ever entered into between [D] and [P] as there was no payment of rent nor rental deposit by [P]. No consideration of any kind was ever tendered by [P] pursuant to the [T/A].”

68.  Although D’s pleaded case is that there was no payment of rent and that no consideration of any kind was ever tendered by P pursuant to the T/A, his evidence was that P did make some payments into the bank account towards the rent on a few occasions.  As I have said, his evidence was that P only paid into the bank account $1,200 on a few occasions but he could not remember how many.  

69.  What D’s evidence shows, however, is that his pleaded case that no consideration of any kind was ever tendered by P pursuant to the T/A cannot be maintained.  It is trite that the court is not concerned with the adequacy of consideration and that the validity of a contract could not generally be challenged on the ground that the consideration was inadequate. 

70.  Ms Tang was unable to elaborate on why it was said that the T/A was invalid.  It was her submission that the T/A was invalid right from the beginning as the T/A was not fully performed.  I am satisfied that there is no merit in D’s case that the T/A was invalid as alleged.  I have no hesitation in rejecting the submission that the T/A was invalid. 

71.  Issue (1) is resolved in favour of P.  I find that the T/A made between P and D dated 11 July 1977 was a valid tenancy agreement. 

72.  That being so, it is agreed that issue (2) on the question of whether a licence was granted by D to P does not arise.

Issue (3)

73.  The main dispute between the parties is on issue (3) namely, can P prove the physical possession (factual possession) and the requisite intention to possess (animus possidendi) the property for the requisite 20 years before the commencement of these proceedings?

74.  As I have said, 2 separate elements have to be shown:

(1)   a sufficient degree of factual possession in the sense of physical control; and

(2)   an intention to possess (animus possidendi).

75.  Ms Tang in her closing submissions did not dispute that the first element has been established. 

76.  There is no dispute that at the end of the tenancy on 9 July 1980 P continued to live at the property.  She lived there either alone or with her family members from that time onwards.  She went to live in Australia from 1990 to 1993 with her husband and children during which time she acquired Australian nationality and obtained an Australian passport.  From 1990 to 1993 her mother, son and daughter lived at the property with her permission.  In 1993 P returned to Hong Kong and continued living at the property with her family.

77.  I am satisfied that the first element has been established.

78.  The crux of the dispute between the parties is whether P has established that she had the intention to possess, ie the animus possidendi.

79.  Mr Ng, for P, made it plain that P’s case is that she was a trespasser after the termination of the tenancy.

80.  I am satisfied that P was a tenant of D until the termination of the T/A and that thereafter she was a trespasser at the property. 

81.  It seems to me, and I so find, that D’s right to bring an action for the recovery of the property first accrued to D after the tenancy ended on 9 July 1980.  If P can establish that she has been in adverse possession since then as she has claimed, D’s right of action would be statute barred 20 years from that date and P would be entitled to the declaration that she has acquired a possessory title to the property.  If P fails to establish that she has been in adverse possess as she has claimed, there is no dispute that D would be entitled to an order for vacant possession of the property and the agreed mesne profits.  

82.  As I have said, P did pay rent for about 2 years under the T/A until the bank account was closed when she could no longer pay the rent into that account.  P accepted in evidence that she had a duty to pay D rent for the term of the tenancy.  She was obviously willing to pay rent for the remainder of the tenancy as, on her evidence, she placed a year’s rent with her solicitors so that they could pay D.  In mid-1980 the solicitors, according to her evidence, returned the year’s rent to her.

83.  On her evidence, P was willing to pay rent to D for the full term of 3 years under the tenancy but for, some unexplained reason, she was no longer willing to pay him the outstanding rent if he had appeared at her doorstep after the end of the tenancy period.  She said in evidence that if D had appeared at her doorstep in December 1980, which was after the period of the tenancy, and asked for payment of the outstanding rent and the property, she would not have given the same to him.  Prior to mid 1980 she was willing to pay D the outstanding rent but after mid 1980 she was no longer willing to pay him the outstanding rent.  Her evidence is not credible and I do not believe her.

84.  In evidence, P was adamant that in mid 1980 as D had failed to collect the rent from her, which was repaid to her by her solicitors, she treated the property as her own property.  She was evasive when giving evidence on this.  Later on, in her evidence she said that the only reason that she considered the property as hers was because D did not come to collect the rent.

85.  It is, in my view, inconceivable that in mid-1980 as D had failed to collect the rent from her she would have considered that the property was her own property.  This is contrary to common sense.  I do not believe her and have no hesitation in rejecting her evidence that in mid-1980 she considered the property as her own property.  This is also a self-serving statement to which no weight should be given.

86.  Mr Ng submitted that animus possidendi can be established even if the occupier mistakenly believes himself to be the owner of the land.  He relied on para 9-38, Jourdan & Radley-Gardner’s Adverse Possession 2^nd ed, where it is said that:

“ If, however, the squatter does believe, erroneously, that he owns the property, that clearly constitutes the necessary animus.”

87.  Mr Ng also relied on what Wilson Chan J said in Cheung Lai Mui v Cheung Wai Shing & others (HCA 1652/2012, 10 April 2017) at para 109:

“ It is also pertinent to note that a mistaken belief of ownership over the land can constitute animus possidendi.”

88.  In my view, reliance on the above is misplaced in this case.  They do not assist P.  I have rejected P’s evidence that in mid-1980 she considered the property as her own property.  There is no question of there being a mistaken belief on her part that she was the owner of the property.

89.  Cheung Lai Mui is also clearly distinguishable on its facts and does not assist P.

90.  I would also refer to what Kwan JA said in Cheung Kwong Yuen at para 12 when dealing with the position of a person who mistakenly believes that he is the owner:

“ … there is no principle of law by which a person who mistakenly claims to be the lawful tenant or purchaser would be precluded from invoking adverse possession and that the correct position is as stated by Saville LJ in Hughes v Cork [1994] EG 25 (CS):

The learned judge appears to have held that it is impossible for someone who believes himself to be the true owner to acquire title by adverse possession since such a person cannot, ex-hypothesi, have an intention to exclude or oust the true owner. If this were the law then only those who knew they were trespassing, that is to say doing something illegal, could acquire such a title, while those who did not realise that they were doing anything wrong would acquire no rights at all. I can see no reason why, as a matter of justice or common sense, the former but not the latter should be able to acquire title in this way. What the law requires is factual possession, ie an exclusive dealing with the land as an occupying owner might be expected to deal with it, together with a manifested intention to treat the land as belonging to the possessor to the exclusion of everyone else.

Obviously if the possessor knows or believes someone else has the paper title to the land he must intend to exclude that person along with everyone else.  But in the absence of such knowledge or belief it is in my judgment sufficient for this part of the second requirement simply to establish a manifest intention to exclude everyone.’”

91.  P also gave evidence that she changed the locks of the propertyin mid 1980 and treated the property as hers.  P’s evidence was in mid 1980 after her solicitors had returned to her the monies for the rent that she had deposited with them, she immediately changed the locks of the property so that D could not enter the property without her consent.  I do not believe her and reject her evidence on this.  This was only mentioned by her for thefirst time in her evidence.  It was never mentioned in her witness statement.  In my view, she has made this up to bolster her case on the intention to possess.

92.  In The Hong Kong Buddhist Association v The Occupiers & another (HCMP 4108/2003, 8 September 2006, Deputy High Court Judge Saunders) the judge at para 31 considered the question of the changing of locks.  At para 31 the judge said:

“ It is right that the changing of locks of premises is a very significant act when having regard to the intention of a person in relation to premises: see Powell v McFarlane at 477–478. In relation to residential premises, particularly in a high-rise building such as exist in Hong Kong, the changing of locks may be less significant. Any tenant in such premises will wish to keep his premises secure from intruders. It is not unusual for a tenant to change locks out of a concern that a previous tenant may still have the key to the existing lock. In such circumstances the changing of locks may not be an assertion of ownership but merely an assertion of a desire for personal security”

93.  The judge’s decision was upheld on appeal.  It was held that the judge’s approach in that case could not be faulted (Hong Kong Buddhist Association v The Occupiers & another CACV 358/2006, 15 May 2007, per Rogers VP at para 11). 

94.  As I have said, I do not believe P when she said that she immediately changed the locks in mid 1980 after she received the monies back from her solicitors. 

95.  It would not be surprising that over the years she would have changed the locks.  It would, in my view, have been an equivocal act whichmay have been done for her security and her family’s security at the property.

96.  P also relies on the fact that she settled the expenses for the property including the management fees and the renovation fees for the property as well as for the renovation and maintenance fees of the building.  The documents at B16 – B89 show that P did make payments for maintenance fees and repairs to the property and that she also contributed to fees for the maintenance and repairs to the building.  P relies on these payments in support of her intention to possess.

97.  P said that she paid all the expenses because she treated the property as hers.  I do not place any weight on her self-serving statement that she treated the property as hers.

98.  P accepted that under the T/A she was liable to pay the management fees.  It seems to me that the management fees which were paid by her were for her occupation of the property and does not assist her in establishing her intention to possess.  Under the T/A she was liable to pay them for her occupation and after the termination of the tenancy she continued to pay them also for her occupation of the property. 

99.  As regards the renovation expenses to the property, I am also of the view that these do not assist her as they were for the renovation of the property where she was living.  Over the long period of time that she was staying at the property, it is hardly surprising that the property would require renovation.  As she was staying there, it is not surprising that she would pay for the renovations there.

100.  I would observe that the documentary evidence of renovations made to the property shows that renovations were first made in October 2009 as shown at B22 (translation at B23).  As shown by the documentary evidence, the other renovations to the property were made subsequently. 

101.  There are some payments paid by P which can be regarded as referable to her occupation of the property such as the management fees and the renovation expenses for the property. 

102.  There are other payments which she made which would usually be paid by the owner of the property such as building renovation fees, contributions to the building improvement fund and window inspection and repairs.  I have considered the same and taken these into account when considering whether the intention to possess has been established in all the circumstances of the case.  Some of these documents are at B58, B61, B65, B69 – 71, B76, B84 and B86.  As the documentary evidence shows, the earliest payment made by D was in 1996 (B58) which was some 19 years after P first occupied the property. 

103.  In cross-examination, P said that she had earlier receipts which were now lost.  This is not surprising in view of the lapse of time.  However, she also said in cross-examination that she had available some further receipts but that she was told by her solicitors that it was too late to adduce the additional documents.  I do not believe her.  There is no mention in her witness statement that she had further documents available.  I would also observe that at the commencement of the trial further documents emanating from D were inserted by agreement into the Agreed Bundle.  It was never suggested by her legal advisers that P had further documents available which she wished to rely on.  No attempt was made at any stage of the trial to put in evidence such further documents.

104.  In relation to the rates paid for the property, the undisputed evidence shows that rates for the property were at all times paid by D and not by P, save for the quarter ending 31 December 1986.  B90 is the demand for rates for that quarter.  P said that she made the payment for rates for that quarter as she received the demand at the property.  

105.  I would observe that the demand at B90 was addressed to D at his PO Box address.  The unchallenged evidence of D was that he had informed the Treasury of his PO Box address and asked them to send all demands for rates to that address.  It appears that B90 was one of the demands for rates that was addressed to D at that address.  D said, and I accept, that for about the last 10 to 20 years he has been paying the rates by autopay.

106.  B90 does not show an imprint of the receipt for payment of that demand.  P said that she went up to the relevant Government offices to pay that demand.  There was no contrary evidence from D that he paid that demand for rates and I am satisfied that P paid that one demand for rates.

107.  P confirmed in evidence that B90 was the only demand for rates that she had paid.  She said that was the only occasion that she had paid rates for the property.

108.  P was evasive when cross-examined about whether she made any enquiries about the payment of rates for the period from 1977 to 1986.  She confirmed that she did not make any enquires whether rates from 1997 to 1986 were paid.  P said that she knew that rates had to be paid every quarter but she only paid rates for one quarter only for all the years that she had been in occupation.

109.  The ratepayer’s name on the demands for payment of rates was at all times D and not P.  It does not appear that P ever sought to replace D’s name with her name as the ratepayer. 

110.  D gave evidence that in the early years the management office of Balwin Court would inform him of the amount he needed to pay for maintenance fees and he would pay them, but that in later years as the management office stopped informing him, he stopped paying the maintenance fees for the property.

111.  In cross-examination, P said that in 1980 she did inform the management office at Balwin Court that she became the owner of the property and the car park.  I do not believe her and reject her evidence on this.  If she had told them that she became the owner, the management office would not have, in my view, sent a reminder of the debit note at B111 to D for payment of management fees for September and October 1990 with a note in Chinese written on the reminder and translated (B112) as:

“ Mr. Lee: Tenant failed to pay 2 months management fee, heard that she had moved out from the unit, therefore you are responsible to pay, please (illegible) cheque (illegible)”

This shows that the management office was treating D, and not P, as the owner of the property and contradicts P’s evidence that she had told the management office in 1980 that she became the owner of the property.

112.  There is no dispute that D also paid for and received receipts for payments that he made to the management office in 1990 to 1992 as shown in B107, B109 and B113.  This is undisputed.

113.  For the period that P was living in Australia from 1990 to 1993, P said that she had asked her mother to pay the management office in her absence.  She was unable to satisfactorily explain why her mother did not pay the fees as shown in the said documents.

114.  I would observe that P was also unable to satisfactorily explainwhy the management office issued a receipt for fees dated 10 February 2010 in the name of D instead of P as shown in B28.

115.  Having considered all the circumstances of the case, I am not satisfied that P had a plain and unequivocal intention to exclude the world atlarge including D as the paper title owner from the property.  In my judgment, P has failed to prove the second element, on a balance of probabilities, that she had an intention to possess the property for the requisite period from mid-1980.

116.  Issue (3) is resolved in favour of D. 

117.  I dismiss P’s claims.  I give judgment to D on his counterclaim and make the following orders:

(1)   that P do deliver vacant possession of the property to D; and

(2)   that P do pay mesne profits to D in the sum of $18,000 per month from 16 August 2015 until delivery of vacant possession of the property to D.

118.  I also make an order nisi that P do pay D his costs of the claim and counterclaim, such costs to be taxed, if not agreed.