TSANG WING KIT ERIC AND ANOTHER v. THE OCCUPIER(S) AND OTHERS

CACV 157/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 157 OF 2009

(ON APPEAL FROM HCMP NO. 1154 OF 2005)

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JUDGMENT

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Hon Tang VP:

1.  The plaintiffs Tsang Wing Kit Eric (曾榮傑) and Tsang Tang Chau (曾騰舟) are the managers ofSam Tsoi & Co. (三才公司)andsued as such. The plaintiff is an ancestral t’ong registered under the New Territories Ordinance, Cap. 97. It is the registered owner of portions of Lot No 4324RP, 4328ARP and 4462ARP in Demarcation District No 51 in Wo Hop Shek in the New Territories as more particularly delineated for identification purpose in the surveyor plans Nos. 1181/4324RP/DP/06, 1181/4328ARP/DP/02 and 1181/4462ARP/DP/02 dated 23 September 2004 annexed to the originating summons and hatched thereon.

2.  This action was commenced under O. 113 of the Rules of the High Court which is a summary proceeding for possession of land against a person or persons (not being a tenant or tenants holding over after the termination of the tenancy) who entered into or remained in occupation without the license or consent of any predecessor in title of the owner.  The 2^nd and 3^rd defendants were joined as parties pursuant to the order of Master Levy dated 28 November 2007.  At trial, the 2^nd and 3^rd defendants were represented by Mr Erik Shum, counsel assigned by the Legal Aid Department.

3.  By a Statement of Claim filed on 3 January 2008, the plaintiff claimed possession of a portion of land more particularly delineated and shaded in yellow in surveyor plan No HC-10624/CP1a annexed to the Statement of Claim which shows the combination of three portions respectively hatched in pink in three surveyor plans Nos. 1181/4324RP/DP/06, 1181/4328ARP/DP/02 and 1181/4462ARP/DP/02.  The portions of land over which possession was claimed by the plaintiff was called “the Subject Land” by the learned judge. 

4.  The plaintiff’s case is that Luk Kee Furniture (六記傢俬) (“Luk Kee”) was the plaintiff’s licensee and had occupied the Subject Land since at least July 1969.  In October 1978, the plaintiff obtained a short-term waiver from the District Office to use most of the Subject Land as a furniture factory by Luk Kee.  The area covered by the waiver was 768.3 square metres.  From about the end of 1982, the plaintiff and Luk Kee entered into an oral tenancy agreement in respect of the Subject Land at an annual rental of $6,000.  Since then with the collaboration of the plaintiff, two other short-term waivers were granted to Luk Kee by the District Office on 14 March 1985, covering the entirety of the Subject Land of 840 square metres.  According to the business registration form, Lee Ho Kwong’s daughter Lee Sui Lin took over the business of Luk Kee in September 1982.

5.  The learned judge said:

“4. Luk Kee was in arrears of rent in 1993. On 30 July 1993, the Plaintiff’s then solicitors issued a notice to quit to Luk Kee requiring it to vacate the Subject Land on or before 31 December 1994. On 12 August 1993, Luk Kee paid the Plaintiff $6,000 as rent for 1993. On 14 November 1994, Luk Kee requested the Plaintiff for three years’ tenancy to enable it to fulfil its orders and to sell its stock. The Plaintiff refused and commenced legal action for recovery of the Subject Land under High Court Action No 3779 of 1995 (hereinafter referred to as ‘HCA 3779/1995’). At the same time, the Plaintiff also commenced recovery action in respect of a piece of adjacent land against Lam For Kwai under High Court Action No 3778 of 1995 (hereinafter referred to as ‘HCA 3778/1995’). On 26 June 1997, the Plaintiff obtained a writ of possession against Luk Kee. The Plaintiff attempted to execute the writ of possession in April 1998. However, Luk Kee refused to deliver up possession of the Subject Land and the Plaintiff agreed to stay the execution of the writ of possession pending resolution of HCA 3778/1995.”

6.  The 2^nd defendant’s case is that in 1979 he bought a plot of land within the Subject Land (“Plot 2”) for a few baskets of rice grain.  He built a hut of about 1,200 square feet on Plot 2.  There he lives with his wife up to date.

7.  The 3^rd defendant claimed to have rented a hut with surrounding land of about 7,000 square feet (referred to by the learned judge as “Plot 3”) from an old woman in 1968.  In 1970, that old woman sold Plot 3 to him for a red packet.  He had operated a decoration business on Plot 3.  According to the 3^rd defendant, Luk Kee was his neighbour who had occupied land opposite Plot 3 but had never occupied Plot 3.  He knew Mr Lee Ho Kwong in Luk Kee and later married his daughter Lee Sui Lin.  The 2^nd defendant said that Luk Kee had never occupied Plot 2. 

8.  The learned judge has recorded that it was common ground at trial:

“… that Plot 2 and Plot 3 together formed the entirety of the Subject Land.”

9.  Both the 2^nd and 3^rd defendants claimed that the plaintiff’s title has been extinguished by their adverse possession of Plot 2 and Plot 3 respectively.

10.  However, essentially the defence is that Luk Kee occupied areas other than the Subject Land.

11.  Both the evidence of the 2^nd and 3^rd defendants to that effect was rejected by the learned judge who said:

“34. … (the 2^nd defendant’s) evidence is vague and disconcerted. I give him generous allowance because of his old age. However, he has been shown to be lying when asserting that Plot 2 was distinct from the land where Luk Kee operated. He was clearly dishonest. His evidence about paying for his rent and for purchase of Plot 2 by a few baskets of rice grain in 1979 is unbelievable. Such barter trade could not have existed even in the New Territories in 1979. He was exaggerating his evidence by giving it an old flavour. I do not believe in his evidence.

35. I have no doubt that the 2^nd Defendant was a resident in Wo Hop Shek Village and was very familiar to Luk Kee. He used the address of Luk Kee, i.e. No 1 Tai Po Road, as his correspondence address. But I reject his evidence that he had bought Plot 2 from someone in 1979 for a few baskets of rice grain. Whether he had actually resided in Plot 2 at all and since when is irrelevant. I do not accept his evidence that he had exclusive possession of Plot 2 since 1979. Luk Kee was still in possession of Plot 2 as part of the Subject Land in April 1998 when it resisted execution of the writ of possession. Thus, the 2^nd Defendant could not have exclusive possession of Plot 2 until at the earliest since 1 January 1995 or after April 1998. In view of the way the defence is run, there is simply no credible evidence when his exclusive possession actually began. For reasons as explained in paragraphs 10, 17 and 18, even if he had exclusively possessed Plot 2 since the termination of the tenancy of Luk Kee on 1 January 1995, he could not establish his adverse title over Plot 2 by 3 June 2005 when the Plaintiff commenced the action. He has failed to discharge the burden of proving adverse possession against the Plaintiff.

Whether the 3^rd Defendant has established adverse possession

36.       The 3^rd Defendant’s evidence is that he bought Plot 3 from an old woman who used to rent him the piece of land.  The crucial part of his evidence is that Plot 3 is opposite to and distinct from the land occupied by Luk Kee.  His evidence is only to be rejected once I accept Shek’s evidence, which I do, that Plot 3 in fact formed the major part of the Subject Land rented to Luk Kee under the 1982 oral tenancy agreement.  I have no doubt that the 3^rd Defendant resided in the Subject Land.  But he did so as part of the household of the tenant Lee Ho Kwong or Lee Sui Lin.  As such, his possession was neither exclusive nor adverse to the Plaintiff, until the tenancy was terminated on 1 January 1995 or when Luk Kee abandoned possession of the Subject Land after April 1998.”

12.  The learned judge then concluded:

“43. Accordingly, I find that the Plaintiff is the registered and legal owner of the Subject Land which had been leased to Lee Ho Kwong and later to Lee Sui Lin trading as Luk Kee Furniture under an oral tenancy agreement since 1982. The tenancy was terminated on 1 January 1995 by the Plaintiff’s notice to quit. Plot 2 and Plot 3 which the 2^nd and 3^rd Defendants claim to have exclusive possession of formed the entirety of the Subject Land. Luk Kee was in lawful occupation of the Subject Land until the 1982 oral tenancy agreement was terminated on 1 January 1995 and then wrongful occupation of the Subject Land at least until April 1998. Before either of those dates, the 2^nd and 3^rd Defendants could not have exclusive possession of the respective plots of land which they claimed. They have failed to discharge the burden of proving exclusive possession of the respective plots of land. Even if they had exclusive possession, such possession was not adverse to the Plaintiff until 1 January 1995 or April 1998. The relevant limitation period is twelve years. The action was commenced on 3 June 2005. The Plaintiff’s claim is not time-barred. As the 2^nd and 3^rd Defendants have no title and their occupation of their respective plots of land was without the consent of the Plaintiff, the Plaintiff is entitled to judgment with costs.”

13.  This is the 2^nd and 3^rd defendants’ appeal.

14.  As for the findings of fact made by the learned judge against the 2^nd and 3^rd defendants, I am respectfully of the view that the learned judge was correct.  The fact that these defendants have been occupying the Subject Land since 1970 cannot avail them, since the learned judge has found that during that period the Subject Land had been occupied by Luk Kee, as a licensee of the plaintiff at the material time.

15.  The 2^nd and 3^rd defendants applied for leave to adduce new evidence.  The 3^rd defendant stated in support of the application that such evidence had not been provided at trial because he thought he was assured of success（勝券在握）.  It is clear, in any event, that he cannot satisfy the requirements of Ladd v Marshall [1954] 1 WLR 1489, namely, that:

“…first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible.”

16.  At trial, the plaintiff had also relied on the fact that at all material times, there were members of the t’ong who were infants, and accordingly their interests have not been extinguished under the Limitation Ordinance.  The limitation period is 20 years for a cause of action which accrued before 1 July 1991 and thereafter 12 years.  The plaintiff submitted that a new limitation period accrues in respect of each newly born member, relying on section 22(3) of the Limitation Ordinance, Cap. 347.

17.  The relevant provisions of the Limitation Ordinance are:

Section 7(2):

“(2) No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person: …”

Section 10(2):

“(2) Where any land is held upon trust, including a trust for sale, and the period prescribed by this Ordinance has expired for the bringing of an action to recover the land by the trustees, the estate of the trustees shall not be extinguished if and so long as the right of action to recover the land of any person entitled to a beneficial interest in the land or in the proceeds of sale either has not accrued or has not been barred by this Ordinance, but if and when every such right of action has been so barred, the estate of the trustee shall be extinguished.”

Section 10(3):

“(3) Where land is held upon trust, including a trust for sale, an action to recover the land may be brought by the trustees on behalf of any person entitled to a beneficial interest in possession in the land or in the proceeds of sale whose right of action has not been barred by this Ordinance, notwithstanding that the right of action of the trustees would apart from this provision have been barred by this Ordinance.”

Section 22(1):

“(1) If on the date when any right of action accrued for which a period of limitation is prescribed by this Ordinance, the person to whom it accrued was under a disability, the action may be brought at any time before the expiration of 6 years from the date when the person ceased to be under a disability or died, whichever event first occurred, notwithstanding that the period of limitation had expired: …”

Under section 22(3):

“… a person shall be deemed to be under a disability while he is an infant …”

18.  The undisputed evidence at trial is that the following members of the plaintiff were born on the dates given next to their names:

「			年齡
	姓名	出生日期	(至2008年4月1日)
	曾榮傑(本人)	13/12/1957	50歲
	曾文斌	30/07/1973	34歲
	曾宇光	13/06/1975	32歲
	曾慶煒	25/03/1977	31歲
	曾宇輝	16/07/1977	30歲
	曾國龍	27/01/1979	29歲
	曾金龍	22/04/1980	28歲
	曾慶義	20/07/1981	26歲
	曾廣之	12/1988	19歲
	曾敬然	13/12/1990	17歲
	曾子軒	20/12/1994	13歲
	曾以信	18/09/2002	5歲
	曾愷信	14/03/2003	5歲」

19.  Thus, at all times, the plaintiff had infant members in respect of whom the limitation period would not expire until 6 years after each such member ceases to be an infant. 

20.  In Wong Shing Chau v To Kwok Keung [2008] 5 HKC 372, the Court of Appeal (Rogers VP, Le Pichon JA and Stone J) held that whenever a new member is born, a new equitable interest is created in an ancestral t’ong or t’so and a new limitation period starts to run.  That decision is binding on us.

21.  The learned judge, however, decided against the plaintiffs because he was of the view that the plaintiff had failed to prove that new members were born within the relevant limitation period.  Paras. 39-42.  However, in doing so, the learned judge had overlooked the fact that in the oral evidence of the 1^st named plaintiff given on 16 March 2009, he had affirmed the contents of his witness statement dated 7 May 2008.  The contents included the names and dates of birth of members of the plaintiff set out in para. 18 above.

22.  By a respondent’s notice, the plaintiff has asked that the judgment be affirmed on the ground that since at all material times, the plaintiff had infant members, the plaintiff’s title had not been extinguished under the Limitation Ordinance.

23.  On the basis of the undisputed evidence relating to the births of members of the plaintiff set out above, I agree and would affirm the judgment on this basis too.

24.  For the above reasons, I would dismiss the appeal with costs to be taxed if not agreed.

Hon Yeung JA:

25.  I agree with the judgment of Tang VP.

Hon Kwan JA:

26.  I agree with the judgment of the Vice-President.