UNIJET LTD. v. YIU KWAI HOI

HCA 13637/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 13637 OF 1998

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J U D G M E N T

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1. The plaintiff is the registered owner of, inter alia, Section G ("Section G") and Section H ("Section H") of Lot No. 533 in Demarcation District No. 184 in the New Territories.

2. The defendant is occupying a portion of Section G, a portion of Section H and a portion of Government land as identified in the plan annexed to the re-re-amended statement of claim as coloured respectively pink, yellow and green ("the said plan"). The defendant also used to but does not now occupy a portion of Section G and a portion of the adjoining Government land identified in the said plan as coloured respectively pink hatched black and green hatched black. The land as coloured pink, yellow, green and pink hatched black and green hatched black on the said plan are hereinafter collectively referred to as "the property".

3. The plaintiff purchased Section G from the predecessor in title Apollo Wu also known as Ng Man Chiu by an agreement for sale and purchase dated 26 July 1974 whereby Ng Man Chiu agreed to sell and the plaintiff agreed to purchase, inter alia, Section G subject to existing lettings and tenancies and upon the terms and conditions in the agreement. The plaintiff became the registered owner of, inter alia, Section G by an assignment dated 5th August 1994 made between Ng Man Chiu as vendor and the plaintiff as purchaser. It is the plaintiff's case that the sale and purchase was subject to an oral tenancy granted by Ng Man Chiu in 1991 to the defendant for the property at an annual rent of $1,200 and that the assignment of Section G was subject to and with the benefit of the oral tenancy granted to the defendant in 1991. The plaintiff also became the registered owner of Section H by an assignment dated 17th October 1994 made between the then registered owner Ng Man Fong, who is Ng Man Chiu's sister, as vendor and the plaintiff as purchaser.

4. The defendant transferred whatever interest he had on the portion of the property as coloured pink hatched black and green hatched black to Wong Kam Fai who has been in occupation of the same until he agreed to deliver up the same to the plaintiff.

5. The plaintiff's claim against the defendant is for possession of the property excluding the land as coloured pink hatched black and green hatched black on the said plan. Mr. Mok, counsel for the plaintiff, in his closing submissions made it plain that the plaintiff was no longer seeking possession of the land as coloured green in the said plan as the same is Government land. The claim for possession that remains is thus for the possession of the property excluding the land as coloured pink hatched black and green hatched black and the land as coloured green on the said plan. The plaintiff in the course of the trial abandoned its claims for arrears of the yearly rent until termination of the tenancy and for mesne profits thereafter until recovery of possession of the property together with interest thereon. The plaintiff also claims costs.

6. The defendant denies that the plaintiff is entitled to possession. The defendant's case is that he has been in adverse possession of the property that he is now occupying since about December 1962. From about December 1962 to about 1972 he also occupied about 100 sq. ft. of the property which was given up by him in return for compensation of $5,000. And up to 1983 he also occupied a portion of the property which was transferred to Wong Kam Fai in 1983. There is also a counterclaim seeking relief on the basis that the defendant has acquired a possessory title to the property which he is now occupying.

7. The main issues have been agreed as follows :

(1) Does the New Territories Leases (Extension) Ordinance (Cap. 150) ("the Extension Ordinance") give the plaintiff a new lease and source of title to commence the present action to evict the defendant notwithstanding that the defendant might have accumulated 20 years of adverse possession (before 25 April 1988 or 27 June 1997) over the property? If it does, there shall be judgment in favour of the plaintiff and a dismissal of the counterclaim.

(2) Had the defendant occupied the property by adverse possession as alleged by the defendant or by licence of the mother of the plaintiff's immediate predecessors-in-title as alleged by the plaintiff? If it was by licence or if the defendant failed to prove adverse possession as alleged, there shall be judgment in favour of the plaintiff and a dismissal of the counterclaim.

(3) If the court should resolve the issue in (1) against the plaintiff and if the court should further accept that the defendant had commenced and continued his occupation of the property by adverse possession as alleged then the claim of the plaintiff should be dismissed and appropriate relief in the counterclaim should be given in favour of the defendant.

As can be seen from the agreed issues, if either issue (1) or issue (2) is resolved in favour of the plaintiff, there shall be judgment for the plaintiff and a dismissal of the counterclaim.

8. Mr. Mok also made it plain that the plaintiff was no longer pursuing the other matters raised in the pleadings, namely by para. 5A(b) of the re-re-amended reply and defence to counterclaim that by the tenancy agreement in 1991 and/or the payment of the $1,200 annual rent the defendant acknowledged the title of the plaintiff's predecessor in title and/or abandoned and/or has otherwise been estopped from relying on any period of adverse possession then accumulated. This was no longer an issue at the trial.

9. Issue (1) is a legal issue. In my view the facts should be considered first. It would therefore be appropriate and convenient to consider Issue (2) first which I propose to do.

10. There is a substantial dispute between the parties as to whether the defendant occupied the property by adverse possession or by licence of the mother of the plaintiff's predecessors-in-title.

11. It is well settled that a person claiming to be in adverse possession must have both possession of the land and the requisite intention to possess the land (Wong Tak Yue v. Kung Kwok Wai & another [1998] 1 HKLRD 241. As to the requisite intention to possess, Li C.J. said at page 250 :

" 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 at 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."

12. There is no dispute that the defendant occupied a portion of Lot No. 533 in about 1958. The defendant gave evidence that he sneaked into Hong Kong from Canton in about 1958. After a short while staying with his brother in Causeway Bay he found a job in Shatin in a rice shop delivering rice. As he did not have a place to live he chose a spot in Lot No. 533 where he is now living and built a shelter. There were bamboo trees there. He made a shelter using canvas as a shelter. His friend then assisted him in building a hut using wooden planks which were abandoned and he built a hut there around a big tree. He contradicted what he had said in para. 9 of his 4th witness statement that he cut some bamboo trees and levelled the ground. In evidence he said that there was no need to cut any trees.

13. When his late wife arrived from the Mainland with his adopted son there was insufficient space and the defendant therefore extended the hut to about 200 sq. ft. There was also a back garden which he said he enclosed and that he reared chickens and tried to grow vegetables there. He said that he fenced off the back garden to an area of about 3,000 sq. ft. I shall return to the fencing later.

14. The evidence shows, and this is not disputed, that at that time there was the old family house of the Ngs known as Ng Yuen inside Lot No. 533 in Section J. The house known as Man Lo where the witness Ng Man Fong lived at that time was in Section H. Her mother Ng Chan Shi, who was in fact her stepmother, lived at Ng Yuen. There was also a structure which has been referred to as the gate building which was the main entrance area leading to Ng Yuen. The defendant's hut was built in the area between the gate building and Man Lo and the hut was facing the road which was Government land. On the other side of the road was a missionary school.

15. The defendant gave evidence that he did not know any person living in Ng Yuen and no one in Ng Yuen asked him why he built a hut there.

16. The defendant also gave evidence that during the onslaught of the destructive Typhoon Wanda (which Counsel agreed struck Hong Kong between 27 August and 2 September 1962) his hut collapsed and disappeared in the typhoon. He lost all his belongings and he together with his family moved to live at the rooftop of his former employer's rice shop. This was confirmed by the witness Lau Ping Lam. The defendant stayed there for about three months. During that period of time the defendant with the help of his friend built two huts at the place that he had previously occupied in Lot No. 533. After the huts were built he moved back with his family to the property.

17. The defendant also said that numbers were given to the huts so that mail could arrive there. The two huts shared a common roof. No. 2 was given to the hut nearer to the gate building and no. 3 to the hut adjacent to it nearer to Man Lo. The defendant said that his friend lived in hut no. 2 for a brief period while he lived in hut no. 3 with his family. After his friend moved out, his son lived in hut no. 2 while he and his wife remained in hut no. 3. The Yiu Kee store was opened at hut no. 3 which his wife ran selling goods, like soft drinks and biscuits.

18. The defendant, however, contradicted what he had said in his 4th witness statement about the time when huts no. 2 and 3 were built which must have been before Typhoon Wanda as he had said that huts no. 2 and 3 were blown away during Typhoon Wanda (para. 20). He denied having told his solicitors what was in his witness statement. It was because of the defendant's evidence that the original hut had disappeared in the typhoon that Mr. Ng, counsel for the defendant, in his closing applied for and was granted leave to file the re-re-re-re-amended defence and counterclaim to assert that adverse possession by the defendant of the property was from about 1962.

19. The defendant's late wife passed away in 1973. According to him his friend Tang came to live with him at hut no. 2 as he had no place to live. The defendant remarried in 1973 in Thailand and his present wife who also gave evidence came and lived with him and his son in hut no. 3. Tang and his family had moved into hut no. 2.

20. There is no dispute that the defendant and his family have lived on the property for all these years.

21. Ng Man Fong gave evidence that her father, Ng Tsz (or Chi) Mi also known as Ng Wing, was formerly the registered owner of Lot No. 533. He had built the family house Ng Yuen in Lot No. 533. He died in November 1939 and whilst he was alive he was in charge of everything at Ng Yuen. After his death Ng Man Fong's mother Ng Chan Shi also known as Chan Miu Yung was in charge of Ng Yuen until she passed away on 2 July 1981. It was Ng Man Fong's evidence, which I accept, that when her mother Ng Chan Shi was in charge she made decisions for the rest of the family as regards Ng Yuen and the other members of the family abided by her decisions. It is clear from her evidence that by 1958 Ng Man Fong was living in Man Lo and her mother Ng Chan Shi was living at Ng Yuen. Ng Man Fong was no. 7 out of 15 siblings and she was referred to and known as the 7th lady. The executors of her father's will were her mother Ng Chan Shi and Leung Sau Chun, her father's concubine, and, until his death in 1956, Ng Chiu Fook as well who had obtained double probate of the father's will. However, Leung Sau Chun did not live in Ng Yuen but elsewhere in Homantin. It is clear on the evidence of Ng Man Fong, which I accept, that Ng Chan Shi made decisions for the family regarding Ng Yuen and the other members of the family abided by her decisions.

22. Ng Man Fong gave evidence that the defendant requested her mother Ng Chan Shi for permission to build a hut in the area she marked in Exhibit P1. There is no dispute that this is in the area occupied by the defendant. At first her mother did not allow him to do so but later she did as he had said that he was very poor and had escaped from the Mainland and had nowhere to live. She was a Buddhist and sympathized with him and she also thought that having him at the front of the property was convenient as that part of Shatin was a quiet place at that time. So she acceded to his request. The defendant also promised to give back the property whenever they liked. Ng Man Fong's evidence on this is hearsay evidence as she was not present when her mother and the defendant discussed the matter but this was related to her by her mother during casual chats later. She also said that her mother did not charge the defendant any rent. However, the defendant's late wife was also a Buddhist and at festivals she would make some cakes and give them to her mother. Ng Man Fong herself had eaten some of the cakes and she had a distinct recollection that one of the kinds of cakes that were brought over was bright red.

23. It was her evidence that the defendant occupied the property with the permission of her mother. The gate leading into Man Lo was near the defendant's hut and there can be no doubt that anyone going into Man Lo from the road would have had to go past the defendant's hut. According to Ng Man Fong her family and the defendant got along quite well. There is no dispute that the defendant did odd jobs for Ng Man Fong over the years for which he was paid. Examples given were plastering work and the building of a septic tank. On the occasions when the Ng family visited the family tombs of their ancestors twice a year during the Ching Ming and Chung Yeung festivals the defendant also assisted the family for which he was paid. Ng Man Fong was the one who gave instructions to the defendant on those occasions. The defendant would carry the roasted pig to the tombs and he would also clear the grass around the tombs. After the family members had paid their respects at the tombs the defendant would cut the roasted pig and distribute the meat to the family members present. The defendant said that he could not remember how long he had been helping out on the tomb visits but it was two to three years after moving to the hut. He contradicted himself as to this by later saying that it was only after the gardener of Ng Yuen had introduced him to Ng Man Fong that he commenced the odd jobs for the Ngs. His evidence was that it was only after he opened the Yiu Kee store at hut no. 3 (which was erected after Typhoon Wanda in 1962) that he came to know the gardener of Ng Yuen.

24. There can be no doubt that for a very long time the defendant did carry out odd jobs and also help out the Ng family on tomb visits. The evidence of Ng Man Fong, which I accept, clearly demonstrated that the defendant and the Ng family had a harmonious relationship over the years apart from a number of incidents. One of this was the occasion when he complained that Ng Man Fong's car which had to go past his huts to the place where it was parked in the garden at Man Lo was causing an annoyance to his children. Another occasion was when according to Ng Man Fong the defendant had cut down some bamboo trees surrounding Ng Man Fong's garden at Man Lo and a report was made to the police.

25. I found Ng Man Fong to be an honest and reliable witness. No doubt it is difficult for one to recall events accurately after so many years but I am satisfied that Ng Man Fong tried her best to recall events as accurately as she could and I have no hesitation in accepting her as a witness of truth. It was Ng Man Fong who had first said in her first witness statement that the defendant started to occupy the property in 1958. At that time the defendant's case as set out in the defence and counterclaim was that adverse possession only commenced in 1968. The defendant is illiterate and partially deaf. He is also a native Chiu Chow speaker and a man of no education. I have taken all this into account. However, despite this, I found that the defendant was an untruthful and unreliable witness. He was evasive and contradicted his 4th witness statement in a number of respects without providing any convincing reason for the departure. The explanations proffered included that he was dizzy when it was explained to him and that he had not told his solicitors what was there. Where his evidence is at variance with the evidence of Ng Man Fong I much prefer her evidence, which I accept, to the evidence of the defendant, which I reject.

26. The defendant in evidence also contradicted what he had said in his 4th witness statement about often encountering residents of Ng Yuen from the time he occupied the property and greeting them politely (para. 14). He denied that he had told his solicitors this and he denied that he had greeted residents from Ng Yuen politely. In evidence he also said that he did not know the residents of Ng Yuen and he did not even know who Ng Man Fong's mother Ng Chan Shi was. He also said that he had never seen her. This is in my view incredible. I disbelieve the defendant. He had been to the family tombs with the Ng family twice a year on the bomb visits for many years and I do not believe that he had never even seen Ng Chan Shi.

27. The defendant relied on the fact that he fenced off the land and has cultivated it as showing his intention to possess the land to the exclusion of everyone else including the owner with the paper title. It is stated at para. 978 Vol. 28 Halsbury's Laws of England 4th Edn. 14th Reissue that :

" Fencing off is most strong evidence of possession of surface land, but cultivation of the surface without fencing off has been held sufficient to prove possession."

28. There can be no doubt that he did plant some fruit trees in the back garden of the huts. There is no dispute that four fruit trees were planted there. Although in chief the defendant said that he did also grow vegetables in the back garden, in cross-examination he said that he tried to grow them but was unsuccessful. His evidence of which area he enclosed by wire nettings to make wire fencing is not satisfactory. In chief he said that he had enclosed an area of about 3,000 sq. ft. of the back garden. The fence was about 5 ft. high. Although he said in evidence that he had reared chickens there as well this was never mentioned in his witness statements. In cross-examination, however, he made it clear that he did not enclose the whole of the back garden by wire nettings. He said that he did not enclose the area facing the gate building. After the demolition of the gate building and the erection of the villa houses that area was closed in by a wall separating that area from the area occupied by the defendant. He also said that the back garden facing Ng Yuen was not fenced in. On his evidence in cross-examination only the part of the back garden facing Man Lo was fenced in. However, he contradicted this in re-examination by marking in the sketch Exh. D4 the fencing of the entire back garden area facing Man Lo and Ng Yuen.

29. In evidence the defendant also contradicted what he had said in para. 16 of his 4th witness statement that he had chopped off bamboo trees and tried to plant some vegetables. When he gave evidence he denied that he had chopped off bamboo trees to clear the area for the back garden. He could not remember if he had said this to his solicitors.

30. The defendant's wife also said that the areas of the back garden facing Man Lo and Ng Yuen were fenced off as shown in Exh. D5 which shows the wire fencing as at the present time. She said that in 1973 when she arrived in Hong Kong and lived at the property there was already fencing surrounding the back garden .

31. Wong Fung Kwei also gave evidence for the defendant. She has known the defendant since 1976. She moved to Shatin in 1983. She did visit the defendant and his wife at their hut and she said that when she went there more than 20 years ago it was fenced with wires and the boundary of the fences had not been changed in all those years. She had been into the back garden and noticed the fencing. Her evidence, however, goes no further than saying that there was fencing in the back. It does not support the defendant's evidence that he erected the fencing.

32. Although Wong Kam Fai said in cross-examination that the back garden was fenced and that there was no change to the fencing from the time he moved there in 1983, he made it clear in re-examination that he was unclear as to who erected the various sections of the fence and was unclear as to whether the fences were erected by the neighbours.

33. Ng Man Fong gave evidence that when she was living at Man Lo the defendant did not put up any fences to fence in the area that he was occupying. She moved into Man Lo after the house was completed in 1954 and moved out in 1961 to Shamshuipo to open her own midwife institution. In mid 1965 she ceased business and moved back to Man Lo and stayed there until 1994. During the time that she lived at Man Lo the defendant did not put up any fences to fence in the area that he was occupying. She said that she had fenced in the area in Man Lo which she had intended to lease to others. There was no fence on the gate building side as her brother had demolished the gate building and built two villa houses with a wall separating the area. It is clear that at that side of the property facing the former gate building there was a wall and no fence was put up there. Ng Man Fong also said that for a period of time the rear part of Ng Yuen was rented out to someone to operate it as a home for the aged and that the tenant used a fence to separate the area. I accept her evidence.

34. The survey sheets at Bundle B which Mr. Mok referred me to show that there was fencing of the area facing Man Lo and also fencing from the back of Ng Yuen leading to the gate building before the same was demolished. The fence at that part was replaced by a wall after the demolition of the gate building and the erection of the two villa houses. The earlier survey sheets from 1972/3 to 1992 do not support the defendant's case that there was a continuous fence which enclosed the back garden in the area facing Man Lo and which continued past the area facing Ng Yuen. It was only in the later survey sheet after 1992 (which was dated April 1997) that such a continuous fence appeared. The obvious inference is that it was only after 1992 that such a continuous fence was erected. I reject the defendant's evidence that the fencing at the back garden area was as shown in Exh. D5 ever since shortly after the defendant built the huts in 1962. I also reject his wife's evidence that in 1973 when she came to live at the property the fencing was as shown in Exh. D5.

35. I find that the defendant never fenced any part of the back garden with the intention to adversely possess the property to the exclusion of everyone including the owner with the proper title. The defendant has failed to establish that he fenced off the area in the back garden intending to possess the land adversely. The fact that he planted fruit trees there is of no consequence as I find that it was not done with the intention to adversely possess the property.

36. Mr. Ng, counsel for the defendant, also relied on two pieces of evidence which he submitted demonstrated that the defendant's intention was to treat the property as his own to the exclusion of anyone else. The first was in relation to the payment of $5,000 compensation to the defendant for his giving up 100 sq. ft. of hut no. 2 to Ng Wing Tong in 1972. The second was in relation to the partition and sale of part of hut no. 3 to Wong Kam Fai in 1983.

37. As to the payment of $5,000 to the defendant, the evidence shows that Ng Wing Tong was the owner of the gate building in the adjoining section in Lot No. 533. In about 1972 the gate building was demolished and was replaced by two villa houses. Ng Man Fong said that the defendant agreed to give to her brother Ng Wing Tong about 100 sq. ft. of his occupied property in consideration of Ng Wing Tong giving him $5,000 but the money was not for the 100 sq. ft. of land. A corner of his hut was knocked down and the money was given to him so that he could fix his hut. The part that was knocked down eventually became part of the garden of the area of the villas. I accept her evidence. In cross-examination the defendant confirmed that he did sell a corner of his hut to Ng Man Fong's brother for $5,000. He said that as his hut was a wooden hut the corner was easy to cut. On the evidence it seems to me that all Ng Wing Tong did was to pay $5,000 to the defendant for his inconvenience and trouble in cutting a corner of the hut that he was occupying. I do not regard this as evidence to support the defendant's intention to adversely possess the property to the exclusion of everyone else. Ng Wing Tong had to inconvenience the defendant by getting him to cut a corner of his hut and for this he paid him $5,000. That was a perfectly reasonable thing for him to do especially since the family and the defendant had, on Ng Man Fong's evidence which I accept, a harmonious relationship.

38. The second piece of evidence relied on is in relation to the partition and sale of a part of hut no. 3 to Wong Kam Fai. The defendant gave evidence and which was supported by his wife that he met Wong Kam Fai in 1983. He was working in the same restaurant as his wife and he needed a place to stay. He agreed to partition off his hut and sold that part to him. According to Wong Kam Fai the defendant said that he was the owner of the hut. The defendant and Wong signed an agreement which provided as follows :

"Tai Chung Kiu Tau, wooden huts one above and one below. Wooden huts owner Yiu Kwai Hoi agrees to sell to the family of Wong Kam Fai and his wife. Both parties agree at the price of $20,500. If Mr. Wong Kam Fai wishes to resell these wooden huts to others, consent from Yiu Kwai Hoi is required. This document is thus made by both parties as evidence."

39. After signing this agreement Wong Kam Fai and his wife moved into that part of hut no. 3 which had been partitioned off for him and it was given a number, no. 3A. Wong said that he regarded that hut as his and that if in future if the Government wanted to repossess it he would get compensation or be allocated a flat in a housing estate. That was his understanding.

40. I am also unable to accept the submission that by entering into this agreement with Wong the defendant manifested his intention in 1983 to treat the property as his own to the exclusion of everyone else. There is no evidence whatsoever that Ng Man Fong or any other member of the Ng family ever knew of the agreement that the defendant entered into with Wong Kam Fai. Ng Man Fong gave evidence that altogether the defendant built three huts. In fact all three huts, namely, hut nos. 2, 3 and 3A shared a common roof. She said that at the time the defendant said that he had relations who were poor as well so he wanted them to reside there and her mother allowed him to build the huts there. I believe her. It is clear on the evidence that the Ng family were never informed of the sale of a portion of his hut to Wong Kam Fai in 1983. I fail to see how the agreement with Wong Kam Fai which was never known to the Ng family can be a manifestation of the defendant's intention to adversely possess the land. The fact that he partitioned his hut and sold that part to Wong Kam Fai did not make his possession adverse.

41. The plaintiff also relied on the grant in 1991 of an oral tenancy to the defendant. The plaintiff's case is that in about 1991 the defendant and Ng Man Chiu orally agreed with the defendant to grant the defendant an oral yearly tenancy of the property at the annual rent of $1,200 and that this demonstrates that the defendant was not in adverse possession with the requisite intention. This is disputed by the defendant.

42. Ng Man Fong gave evidence that when Ng Man Chiu graduated from his studies in the USA he returned and lived in Ng Yuen. After he married he continued to live at Ng Yuen with his wife until after she gave birth to their child. He was then offered a job in New York and he left with his family to take up his new job. He had lived in Ng Yuen for more than two years before going off to New York. Her evidence was that in January 1991 when Ng Man Chiu came back to Hong Kong for a vacation he visited her at her home in Man Lo. They invited the defendant and his wife to go over to Man Lo for a discussion. The defendant and his wife came over and Ng Man Chiu said to them that they had built huts on the land and therefore had to pay rent. They talked harmoniously and Ng Man Chiu suggested that the defendant should pay $1,200 as yearly rent. The defendant agreed to pay $1,200 as yearly rent for the land used by him where he had the three huts. It was agreed that this would commence in February 1991. Ng Man Chiu asked Ng Man Fong to write out a tenancy agreement which she did. However, she did not know the defendant's name and asked for his identity card which he produced and she wrote out his name after seeing the identity card. She also filled in the rent payable and the period for which rent was to be paid. Her evidence was that the document was signed by the defendant and it was given to Ng Man Chiu. That copy has not been produced in evidence. Ng Man Fong, however, remembered that the defendant did sign the document as she had a clear recollection that the defendant signed his name with big characters. She said that she received the rent of $1,200 in cash from the defendant and issued him with a rental receipt the counterfoil of which has been produced as Exh. P5 which was in her handwriting and was dated 21st February 1991.

43. Wong Kam Fai who lived in hut no. 3A gave evidence that in or about January or February 1991 the defendant told him that the three families living in the three huts had to pool together to pay $1,200 rent to Ng Man Fong. He said that this was discussed between Tang, the defendant and himself and it was agreed that they would each contribute $400 to make up the $1,200 to be paid to Ng Man Fong. He said that the following day he gave $400 to the defendant for his share and he believed that the defendant had paid the $1,200 to Ng Man Fong as he told him that he had done so.

44. He also gave evidence that the defendant showed him Exh. P4 a copy of which had been given to him by the defendant at the time and which he recently discovered had been kept inside one of his drawers at home and he had made the same available to the plaintiff's solicitors. He said that the defendant showed him Exh. P4 which stated :

" Yiu Kwai Hoi has three wooden huts in Section C, Lot No. 533, Ng's Garden, Tai Chung Kiu, Sha Tin. Now the landlord Ng Man Chiu is willing to recover rent for the land at HK$1,200 per annum, calculated from the 1st day of February 1991. If the Hong Kong Government orders a demolition after this date, Yiu Kwai Hoi is to be responsible himself for all procedures, [and] should not demand compensation from the Landlord Ng Man Chiu. This is made as proof."

45. The document was signed by Ng Man Chiu as landlord but there was no signature of the tenant and the witness in the space provided. The date was not filled in but it stated :

" The day of the month of in the year of 1991."

46. As the defendant was illiterate Wong Kam Fai read the document and discussed the contents with him. The defendant told him that the owner of the property was Ng Man Chiu. After discussing the contents of the document with the defendant it was decided that they would not sign on the document otherwise according to their belief the landlord would have a basis to repossess the land. He also told the defendant that they could not sign on future documents as well in relation to the huts.

47. Wong Kam Fai confirmed that rent was paid for one year only. He said that in the following year Ng Man Chiu's younger sister came to collect rent and wanted an increase but he told the defendant to ignore her. It seems that he objected to paying an increase after only one year and he did not pay any portion of the rent thereafter.

48. The defendant gave a completely different version of the events. Although he could not remember when the events took place, his wife gave evidence that she remembered that it was in 1994. That was the year the plaintiff purchased the property from Ng Man Chiu and Ng Man Fong. Mrs. Yiu's evidence was that she remembered that it was on the day in 1994 that she hit her son, the only time she ever did so, for not doing his homework and also it was the same year as her grandmother passed away in Thailand. However, I do not believe her. The documentary evidence, namely the counterfoil of the rent receipt Exh. P5 and the copy of the agreement Exh. P4 firmly support both Ng Man Fong and Wong Kam Fai that the events took place in around January or February 1991.

49. The defendant gave evidence that he and his wife were at home in the evening when Ng Man Fong and Ng Man Chiu came over to their home. Ng Man Chiu was introduced as the landlord of the property and he told them that he wanted to talk to them and invited them over to Man Lo. They asked him for his identity card which he showed them. At Man Lo, Ng Man Fong told him that he had been living there for a few ten years and hadn't paid anything and told him that he had to pay $1,200 for rent. He said that he was asked to sign a document which he could not read as he was illiterate. He therefore took it back to the other two families, i.e. the Tangs and Wongs to show it to them. He was advised by them not to sign the document. He said that Ng Man Fong and Ng Man Chiu came to his home later on asking whether he had signed the document or not. He asked them why he should sign as he had been living there for several ten years. He lost his temper and did not pay attention to them and they did not come back again. He said that he did not sign any document nor did he agree to pay $1,200 as yearly rent. He did not pay Ng Man Fong $1,200 and she did not give him a rental receipt. He denied that Wong Kam Fai had paid him $400 as his share for the yearly rent of $1,200.

50. The defendant's wife gave evidence and confirmed that she went with the defendant to Man Lo that evening but stood at the doorway and was able to listen to the conversation between the defendant and Ng Man Fong and Ng Man Chiu. In her witness statement which was treated as her evidence in chief she said that Ng Man Chiu said that he was the landlord and wanted them to help him by signing a paper. He brought out three pieces of paper altogether and asked the defendant to sign. The defendant asked what they were for and was told that the papers were to prove that he was the landlord. The defendant said that he was illiterate and Ng Man Chiu asked to see his identity card which the defendant showed to him. Ng Man Chiu asked the defendant to sign on the papers but the defendant refused to do so. The defendant's wife largely supported his evidence that he did not sign any document for the Ngs and that he did not pay rent of $1,200.

51. On this dispute of fact, I much prefer the evidence of Ng Man Fong and Wong Kam Fai to the evidence of the defendant and his wife where their evidence is at variance. I believe Ng Man Fong and Wong Kam Fai on these matters and disbelieve the defendant and his wife. I find that the defendant did sign a document prepared by Ng Man Fong in about January 1991 and that he orally agreed with Ng Man Chiu that he would enter into a yearly tenancy of the property for $1,200 per annum commencing from 1 February 1991. I also find that the defendant did in fact pay the first year's rental of $1,200 to Ng Man Fong who received it on behalf of Ng Man Chiu but that no further rent was paid after that. I also find that the defendant did sign the document which was written out by Ng Man Fong and which was given to Ng Man Chiu and he asked for a copy to be given to him which Ng Man Fong wrote out. A copy of that document is Exh. P4. I find that the defendant asked for this so that he could get Tang and Wong to sign on the same and to get them each to pay $400 as their contribution to the yearly rent of $1,200 which they agreed to pay to the defendant. It is unclear whether by signing the document given to Ng Man Chiu the defendant entered into a written yearly tenancy as the defendant wanted Tang and Wong to also sign the document. But the document was never signed by them and returned to Ng Man Fong. It seems to me, and I so find, that by orally agreeing to the yearly tenancy with Ng Man Chiu, there was an oral tenancy of the property granted to the defendant at a yearly rent of $1,200 commencing from 1st February 1991. I also find that the defendant readily agreed to pay $1,200 as yearly rent to Ng Man Chiu which he did for the first year through Ng Man Fong. I find also that Ng Man Fong gave him a receipt the counterfoil of which is Exh. P5.

52. An important feature is that there was no confrontation between the defendant and the Ngs when he built his original hut in 1958 and when he built the two new huts in late 1962. Apart from minor incidents, I find that the relationship between the defendant and the Ng family must have been a harmonious one. Otherwise, the family would not have continued to ask him to do odd jobs and to help out twice a year when the family visited the family tombs for a very long time. All this is entirely consistent with the fact that the defendant had been granted permission to build his huts and to remain on the property until he was asked to leave and strongly supports the plaintiff's case. If he were a trespasser and someone who had taken adverse possession of the property it is in my judgment inconceivable that there would have been such a harmonious relationship between him and the Ng family. I also find that the defendant's wife did give cakes to the mother of Ng Man Fong at festivals and this must have been in appreciation of her kindness and generosity in allowing the defendant and his family to remain on the property without payment of any rent. Although in his 4th witness statement the defendant said that he was not sure if his late wife had given such cakes to her (para. 15), in evidence he said that this did not happen and that he never said what was in his witness statement about this matter to his solicitors. He then said that he was a bit dizzy at the time the statement was interpreted to him. I disbelieve the defendant.

53. The evidence is compelling leading to the strong inference that the defendant was occupying the property with permission and under a licence. I am also satisfied that I ought to attach great weight to the hearsay evidence of Ng Man Fong as to the occupation by the defendant with the permission of her mother. I find that the defendant occupied the property with the permission of the mother of Ng Man Fong and that he was never in adverse possession of the property as I find that his occupation was not with the intention to adversely possess the property. In my judgment by agreeing to an oral yearly tenancy in 1991 and paying the first year's rent of $1,200 the defendant readily accepted Ng Man Chiu's ownership of the property.

54. Mr. Ng in his closing submissions raised the question of whether Ng Chan Shi being one of two executors was able to give a personal licence to the defendant to occupy the property rent free. He also raised the question of whether, if there was a personal licence, such licence was terminated in 1966 when Ng Chan Shi devolved section G to Ng Man Chiu.

55. I agree with Mr. Mok that these matters have not been pleaded and it is not open to the defendant to raise them. Also, by agreeing the issue (2) as framed such questions are in my view irrelevant. The agreed issue is : Has the defendant occupied the property by adverse possession as alleged by the defendant or by licence of the mother of the plaintiff's immediate predecessors-in-title as alleged by the plaintiff? That being so, the two questions raised in counsel's closing submissions are irrelevant.

56. In any event, there is no merit in the two matters raised by counsel for the defendant.

57. Under a joint grant of representation the act of one representative is to be regarded as the act of all the representatives unless there is statutory provision to the contrary. (Williams, Mortimer & Summicks on 'Executors, Administrators and Probate, 17th Edn. page 690). Statutory provision to the contrary can be found in s. 54(1) of the Probate and Administration Ordinance, Cap. 10 where it is provided that no conveyance of immovable property of a deceased person shall be made without the concurrence of all the personal representatives of the deceased or an order of the court. The disposal of property by a personal representative in contravention of the provisions of s. 54 makes the disposal voidable at the instance of any other person interested in the property (s. 54(5)). The disposal is voidable but not void. However, one representative can make a valid contract for the sale of real estate (Williams, Mortimer & Summicks on 'Executors, Administrators and Probate, 17th Edn. page 692). It seems to me that as one executor can lawfully make a valid contract of sale there is no reason why one executor cannot grant a licence. There is no merit in the question raised.

58. By the Assent dated 12 Dec 1966 section G, inter alia, was vested in Ng Man Chiu. The evidence of Ng Man Fong, which I accept, was that Ng Chan Shi was in charge of managing Lot No. 533 where Ng Yuen was situated and the other members of the Ng family abided by her decisions. She also said that after the vesting of section G to Ng Man Chiu in 1966 Ng Man Chiu was not in Hong Kong and the property was managed by his mother Ng Chan Shi for him.

59. The documentary evidence referred to by Mr. Mok also supported the evidence of Ng Man Fong that her mother Ng Chan Shi managed the property on behalf of the members of the family. In the Modification of Tenancy dated 26th February 1959 annexed to the sale and purchase agreement, Exh. D2, the owner was described as "Ng Chan Shi of Shatin Ng Yuen". Only her name was given as the owner in this document. The other executor Leung Sau Chun was not named as the owner. It seems that Ng Chan Shi was the person in charge of the matters concerning Lot No. 533. This lends support to Ng Man Fong's evidence that Ng Chan Shi was managing the matters on behalf of the family and the family abided by her decisions. Even after his mother's death in 1981 Ng Man Chiu must have affirmed the licence granted by his mother as he did not try to evict the defendant after her death.

60. I fail to see how the two matters raised by counsel assists the defendant. What is important to bear in mind is that even if the licence was not validly granted by the mother the defendant, on my findings, must have thought that he was occupying the premises with the permission of the owner. That being so, there could never have been any intention to adversely possess the property.

61. Issue (2) is resolved in favour of the plaintiff. In my judgment the defendant had not occupied the property by adverse possession as alleged but by licence of the mother of the plaintiff's immediate predecessors-in-title. The plaintiff is entitled to judgment and the counterclaim should be dismissed.

62. In case this matter goes further and I am held to be wrong on Issue (2), I go on to consider Issue (1). I shall assume for this purpose that the defendant was in adverse possession of the property since 1962.

63. The purpose of the Extension Ordinance was to provide for the extension of certain leases of land in the New Territories. By s. 2, the Extension Ordinance applied to every New Territories lease that existed at the commencement of the section and that, but for the Ordinance, would expire before 30 June 1997, not being (a) a short term tenancy; (b) a lease for special purposes; or (c) a lease in respect of which the lessee registers a memorandum under s. 5. By s. 6, the term of a lease to which the Extension Ordinance applied was extended, from the date on which it would, apart from the Extension Ordinance, expire, until the expiry of 30 June 2047, without the payment of any additional premium.

64. It is common ground that the lease of the property was a lease which was extended under the provisions of s. 6 of the Extension Ordinance until the expiry of 30 June 2047, without payment of any additional premium. The commencement date in respect of s. 6 was 25 April 1988.

65. The preamble to the Extension Ordinance stated as follows :

" Whereas the Joint Declaration of the Government of the United Kingdom and the Government of the People's Republic of China on the Question of Hong Kong signed in Beijing on 19 December 1984 provides that certain leases of land expiring before 30 June 1997 may be extended until not later that 30 June 2047".

66. The Extension Ordinance was, as Mr. Ng submitted, enacted for convenience reasons, i.e. to avoid the administrative inconvenience of multiple extensions. However, there can be no doubt, as Mr. Mok submitted, that when the original Government lease was granted to the lessee no one could reasonably have anticipated that the United Kingdom and Chinese Governments would in 1984 enter into a Joint Declaration on the Question of Hong Kong and provide that certain leases of land expiring before 30 June 1997 would be extended for 50 years to expire not later than 30 June 2047.

67. It was the defendant's contention that the defendant had already acquired an accrued right of a possessory title to the property when s. 6 of the Extension Ordinance took effect and that such accrued right could not be taken away by the enactment of the Extension Ordinance. It was further contended that by s. 7 of the Extension Ordinance such accrued right was expressly preserved.

68. S. 7(1) provided that :

" During the period of the extension of a lease under section 6, the lease and any interest therein created by or under an instrument registered in the Land Registry shall, unless the contrary intention appears from the instrument, be subject to -

(a) the same encumbrances and interests as applied immediately before the period of extension, including -

(i) ...............................................................

(ii) ...............................................................

(iii) any .......... rights, .......... or other burdens of whatsoever kind or nature".

69. It was the defendant's case that he had been in adverse possession of the property from 1962 and that by 1982 he had acquired a possessory title to the property. That, it was submitted, was an accrued right and could not be taken away by the Extension Ordinance in the absence of a clear intention to the contrary.

70. It is important to bear in mind the effect of the relevant provisions of the Limitation Ordinance, Cap. 347. These were examined and analysed in the speech of Lord Nicholls in the Privy Council in Chung Ping Kwan v. Lam Island Development Co. Ltd. [1997] A.C.38. After setting out the relevant provisions of the Limitation Ordinance, namely s. 7(2), s. 8(1), s. 9 and s. 17 Lord Nicholls said at page 46 :

" From these provisions several conclusions emerge. Time begins to run against a lessee when he is dispossessed by a trespasser. In the present case time ran against the plaintiff's predecessor Mak Yung from the date when the defendants took possession and thereby dispossessed him : section 8(1). If continued for the prescribed period of 20 years, this adverse possession would have barred the right of Mak Yung to recover possession. It would similarly have barred those claiming under him.

However, dispossession of a lessee by a squatter does not set time running against the lessee's landlord. The landlord's right to recover possession from the squatter on the determination of the lease is not barred by a squatter's adverse possession against the lessee, however long this continues. In the ordinary course the landlord's right of action accrues when, but only when, the lease ends and the landlord's reversionary interest falls into possession : section 9(1). Only then does time start running against the landlord.

The rationale of this provision is that so long as the legal estate created by the lease remains in existence, the landlord has no right to obtain possession of the land from a squatter. The squatter dispossessed the lessee, not his landlord. If the lessee seeks to recover possession it will be sufficient for him to prove he was in possession and that the squatter dispossessed him. But if the landlord, not having been dispossessed by the squatter, comes along and seeks to eject the squatter, he must set up and rely upon his title. He has to show a better title to possession than the squatter. Herein will be his difficulty. So long as the lease is extant, his title to present possession of the land is deficient. This is so even if the title of the lease, as between himself and the squatter, has been extinguished by section 17. These established principles are conveniently displayed in Megarry & Wade, The Law of Real Property, 5th ed. (1984), pp 103-109, 1037.

On the determination of the lease, therefore, the landlord is entitled to oust the squatter however long he may have been on the land. Those claiming through the landlord are similarly entitled : their right to possession is no better, and no worse, than the right of the landlord from whom they derive their title. So if the landlord grants a new lease, the lessee of the new lease may eject the squatter."

71. It is important to firmly bear these principles in mind. In the present case, assuming that the defendant has been in adverse possession since 1962, he would have acquired a possessory title against the lessee by 1982. The lessee's right of action would be statute barred by s. 7(2) of the Limitation Ordinance and the title of the lessee to the land was extinguished by s. 17 of the Limitation Ordinance. However, the reversioner's cause of action does not commence until after the lease is determined. On determination of the lease the reversioner and anyone claiming through him is entitled to oust the squatter however long he may have been on the land. And if the reversioner grants a new lease the lessee of the new lease may eject the squatter. It makes no difference if the lessee under the new lease is same person as the lessee under the original lease (per Lord Nicholls in Lam Island at page 47).

72. In Lam Island the Privy Council was examining the New Territories (Renewable Government Leases) Ordinance, Cap.152 ("the Renewable Leases Ordinance"). The Renewable Leases Ordinance was also enacted for administrative reasons to make provision for the renewal of certain Government leases of land in the New Territories. It is important to bear in mind that there was already a right of renewal contained in such Government leases. By s. 4 of the Renewable Leases Ordinance it was provided that the right of renewal contained in the lease shall be deemed to have been exercised by the person entitled to that right and there shall be deemed to have been granted a new Government lease of the land for a term of 24 years less three days from 1 July 1973, subject to such rights as the land and the existing Government lease were subject to immediately before 1 July 1973. The Privy Council held that a squatter who was in adverse possession for 20 years before 30 June 1973 had a right within the meaning of s. 4 (4)(c) and that the new Government lease deemed to have been granted on 1 July 1973 was subject to that right. But, as Mr. Mok correctly submitted, it is plain for the speech of Lord Nicholls that the reason why the Privy Council came to that view was because of the right to renew contained in the Government lease.

73. Dealing with the right to renew, Lord Nicholls said at page 48 :

" The lessee has a right in respect of the property which he can enforce against the landlord. Thus the question to be addressed is whether adverse possession bars the lessee from asserting against the squatter this specifically enforceable right, and the legal estate which flows from this right, as much as it bars the lessee from asserting against the squatter the other rights granted to him by the lease.

Their Lordships consider that an affirmative answer to this question will accord better with the legislative intention inherent in the scheme of the Limitation Act 1980 and the Limitation Ordinance. The principle underlying section 9(1) is that time should not run against a reversioner so long as there is a prior estate or interest standing between him and the right to retake the property. Until the preceding estate or interest falls into possession, the reversioner is not sleeping on his rights.

This principle applies to a prior legal estate such as a lease. This principle seems apt to be applied also to a specifically enforceable prior right to call for a legal estate, such as a lessee's renewal option, when the person having the right is already lawfully in possession. In the latter case, as much as the former, the reversioner has no right to enter and eject the trespasser. If the lessee validly exercises the option the landlord is bound to renew the lease. He can be compelled to do so. He is not entitled to eject the lessee at the expiration of the lease. This is the crucial feature. The landlord is not entitled to possession. This pre-existing interest of the lessee, precluding the landlord from ejecting the lessee, would be a fatal flaw in a claim by the landlord to oust a trespasser. The trespasser is as much entitled to set up and rely upon this interest as a deficiency in the landlord's right to possession as he is entitled to set up and rely upon a lease for this purpose."

74. And at page 49 in dealing with the relevant provisions of the Limitation Ordinance he said :

" In their Lordship's view, where a new lease is granted pursuant to a lessee's option in the original lease the right to bring an action to recover the land from a trespasser within the meaning of section 7(2) accrues to the lessee on the date of the dispossession. Section 8(1) is applicable to such a case, and as against the trespasser section 17 operates to extinguish his title to the new lease as much as the original lease. Conversely, in such a case section 9(1) is inapplicable and does not operate to set a new limitation period running in favour of the lessee. The lessee's claim in right of the new lease is not a claim to an estate or interest in reversion within the meaning of section 9(1), because the lessee's right to the new lease, subject to satisfying any prescribed conditions, was a right he already had as lessee."

75. Mr. Ng contended that s. 7 of the Extension Ordinance had the effect of preserving the defendant's possessory title against the plaintiff who were the successors in title of Ng Man Chiu and Ng Man Fong. He submitted that s. 7 of the Extension Ordinance was similar to s. 4(4)(c) of the Renewable Leases Ordinance. It was contended that the defendant had already acquired an accrued right which could not be taken away by the Extension Ordinance. He relied on Yeung Kong & Anor v. Fu Mei Ling Mary (Administratrix of the Estate of Fu Tong, Deceased) & Anor [1994] 2 HKC 1 where the defendants had been in adverse possession of the land for over 20 years. The defendants contended that the possessory title which they had acquired by 1969 continued to subsist after 30 June 1973 by virtue of s. 4(4)(c) of the Renewable Leases Ordinance. It was held, inter alia, that the rights of a squatter prior to the determination of the lease, where he has acquired a possessory title by adverse possession, are rights enforceable not only against the lessee, whose rights as against the squatter had been extinguished, but also against everyone other than the former lessor. Therefore, the determination of the old lease did not mark the end of the squatter's title. However, the court in Yeung Kong did not specifically consider the right to renew point which was a crucial feature in Lam Island. The court in Yeung Kong treated the renewed lease as a true new lease rather than one granted pursuant to a right to renew. (see Leonard J at page 4 B-D). Yeung Kong was cited and considered in Lam Island.

76. I accept Mr. Mok's submission that the reason why the Privy Council in Lam Island decided that a squatter who was in adverse possession for 20 years before 30 June 1973 had a right within s. 4(4)(c) of the Renewable Leases Ordinance and that the new Government lease deemed to have been granted on 1 July 1973 was subject to that right was because of the crucial feature that there was already a right to renew in the Government lease. If it were not for the right to renew contained in the Government lease the right of action by the reversioner to recover land shall be deemed to accrue on the date the estate or interest fell into possession by the determination of the preceding estate or interest (s. 9(1) Limitation Ordinance).

77. It seems to me to be clear from the reasoning in Lam Island that if the lessee obtains a new lease from the reversioner the lessee has a new cause of action to evict the trespasser as from the commencement of the new lease. The dispossession during the original lease does not operate against the new lease if such new lease is not granted pursuant to a lessee's option to renew in the original lease. In so far as it can be said that Yeung Kong supports the proposition that the trespasser could enforce his possessory title even against a lessee seeking to enforce a new cause of action under a new lease which was not granted pursuant to a lessee's option to renew in the lease this can no longer be maintained in view of the later Privy Council decision in Lam Island. Yeung Kong provides no assistance to the defendant.

78. Mr. Ng also relied on Leung Yiu & ors v. Birkenhead Properties and Investments Ltd. [1998] 1 HKC 561 where Mayo JA (as he then was) said at page 566 :

" Mr. Jat for the respondent submitted that as the rights had been acquired by 1973 they fell squarely within the ambit of Yeung Kong v. Fu Mei Ling Mary and that the Lam Island case had no application whatever to the present situation. The law was clear from 19 August 1994 onwards that the squatters could assert their rights. In my view this contention is correct."

79. It has to be borne in mind that what was said was in the context of an application for leave to appeal out of time. Mayo JA did not refer to the reasoning in Lam Island and Yeung Kong. I do not read the above passage as any indication by Mayo JA that he considered that the detailed reasoning by the Privy Council in Lam Island was wrong. I accept Mr. Mok's submission that the Court was doing no more than expressing the view that at least since 19 August 1994, the date of the judgment in Yeung Kong, the appellant in Birkenhead ought to have been in a position to lodge his appeal and ought not to have delayed until August 1996 when the notice to appeal out of time was lodged. Again, this case provides no assistance to the defendant.

80. By s. 6 of the Extension Ordinance the term of the Government lease was extended until the expiry of 30 June 2047, without payment of any additional premium. As the preamble to the Ordinance stated, it was because of the Joint Declaration that this Ordinance was enacted to provide for the extension until not later than 30 June 2047. I accept Mr. Mok's submission that effectively there has been the grant of a new Government lease for 50 years. It was, however, not a new lease granted pursuant to an option or right to renew contained in the original Government lease. If it were not for the Extension Ordinance the Government lease would have expired by effluxion of time in June 1997. That there has been the grant of a new lease cannot be doubted. As Russell L.J. said in Jenkin R. Lewis Ltd. v. Kerman [1971] 1 Ch 477, at page 496 :

" If a tenant holding land under a lease accepts a new lease of the same land from his landlord he is taken to have surrendered his original lease immediately before he accepts the new one. The landlord had no power to grant the new lease except on the footing that the old lease is surrendered and the tenant by accepting the new lease is estopped from denying the surrender of the old one. This "surrender by operation of law" takes effect whether or not the parties to the new lease intend it to take effect. Moreover, even if there is no express grant of a new lease the old lease will be surrendered by operation of law if the arrangements made between the landlord and the tenant are such as can only be carried out so as to achieve the result which they have in mind if a new tenancy is in fact created.

If, for example, a tenant holds a lease of land for 20 years and he and his landlord wish the period of his right to hold the land to be extended by a further 20 years, their object can be achieved by the landlord granting the tenant a reversionary lease to take effect on the expiry of the existing lease, but if they wish a single term for the extended period to come into being that result can only be achieved if the existing term is surrendered and a new term is created. It is not possible simply to convert the existing estate in the land into a different estate by adding more years to it, and even if the parties use words which indicate that this is what they wished to achieve the law will achieve the result at which they are aiming in the only way in which it can, namely by implying a fresh lease for the longer period and a surrender of the old lease : see In re Savile Settled Estates [1931] 2 Ch. 210; Baker v. Merckel [1960] 1 Q.B. 657."

81. I also accept Mr. Mok's submission that the new lease commenced either in June 1997 (if it took effect as a reversionary lease) or in April 1988 which is the commencement date of s. 6 (if it took effect by way of a surrender and regrant). As the action was instituted in 1998 it matters not whether the new lease commenced in June 1997 or in April 1988 as the limitation period of 20 years had not expired at the time the action was commenced.

82. I am unable to accept the defendant's contention that the defendant had already acquired an accrued right which could not be taken away by the Extension Ordinance. It seems to me that the defendant's contention has already been effectively rejected by the Privy Council in Lam Island. Setting out the submission made in that case by counsel for the trespasser, Lord Nicholls said at page 47 :

" He submitted that the combined effect of sections 7(2) and 8(1) is that once the prescribed period of 20 years has run against a lessee, the lessee is barred from bringing an action to recover the land from the squatter and that he remains barred even if he acquires another source of title he did not have when the 20-year period expired. It would be extraordinary, so the argument runs, if a lessee whose right to bring possession proceedings against a squatter has become time-barred could set time running anew against the same squatter by obtaining another lease.

Their Lordships are unable to accept this submission. A lessee's ability to regain possession in reliance on a new lease is no more than a striking illustration of the principle that dispossession of a lessee sets time running against the lessee and those claiming through him as lessee, but not against the landlord and those claiming through him as reversioner. A trespasser on leased property is more vulnerable than a trespasser on property occupied by the freeholder. In the latter case the title which the squatter bars is the freehold title. In the former case the title which is barred is leasehold only, because that is the extent of the title of the person who has been disposed. Adverse possession defeats the rights, whatever they may be, of the person against whom the possession is adverse. It does not defeat the rights of others."

83. What Lord Nicholls said is in my judgment equally applicable in this case. I am unable to accept the defendant's contention.

84. Mr. Ng also submitted that the Extension Ordinance should not be examined in accordance with common law principles. He contended that the Extension Ordinance merely implemented the agreement reached by the Governments of the United Kingdom and the People's Republic of China as to extending certain leases of land expiring before 30 June 1997 until not later than 30 June 2047 in the Joint Declaration. That being so, it was contended that common law principles did not apply in the examination of the Extension Ordinance.

85. I am unable to accept this submission. It must be recognised that whatever may have been agreed by the Joint Declaration, what the Court is concerned with is the construction of the Extension Ordinance. This must be construed in accordance with established legal principles and in accordance with the law which includes the common law. There is no merit in the defendant's contention.

86. Issue (1) is resolved in favour of the plaintiff. In my judgment the Extension Ordinance gives the plaintiff a new lease and source of title to commence the present action to evict the defendant notwithstanding that the defendant might have accumulated 20 years of adverse possession (before 25th April 1988 or 27th June 1997) over the property.

87. As both Issues (1) and (2) are determined in favour of the plaintiff, I give judgment to the plaintiff for possession of the property excluding the land as coloured pink hatched black and green hatched black and the land as coloured green on the said plan. I also make an order nisi for costs of the action in the plaintiff's favour against the defendant. The defendant's own costs are to be taxed in accordance with Legal Aid Regulations.