LAW BING KEE v. PERSON(S) IN OCCUPATION OF RP AND ANOTHER

HCMP 2270/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2270 OF 2009

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BETWEEN

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J U D G M E N T

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1.  The Plaintiff is the registered owner of the piece of land in Tong Yan San Tsuen in the New Territories known as the Remaining Portion of Section H, Lot 2008, Demarcation District 121 (“Lot 2008 HRP”). Lot 2008 HRP is shaped like an “L” and approximately 11,792 sq ft or 1,095 sq m in size.

2.  In dispute in these proceedings is an area at the southwestern part of Lot 2008 HRP.  The disputed area is about 154.6 sq m (“the Disputed Portion”).

3.  The Disputed Portion adjoins the neighbouring land, Lot 1819.  Lot 1819 in fact shares boundary with Lot 2008HRP on both limbs of the “L” shape.

4.  Despite being the registered owner of Lot 2008 HRP, the Plaintiff is not currently in possession of the Disputed Portion.  In these proceedings, he seeks recovery of the Disputed Portion from the occupants, and specifically, from the 2^nd Defendant who claims to be in possession.

5.  The 2^nd Defendant, on the other hand, counterclaims for a declaration that the Plaintiff’s right to claim possession is barred and his title to the Disputed Portion extinguished by operation of the Limitation Ordinance.

6.  In this context, it would be relevant to note that the present proceedings were commenced in November 2009.

The Plaintiff and Lot 2008 HRP

7.  The history of Lot 2008 HRP can be traced through documentary evidence.  By a New Grant (No. 3493) dated 1 October 1985, Lot 2008 (comprising about 26,910 sq m or 289,657 sq ft) was granted by the Government to Homing Co Ltd and a number of individuals.  By a Deed of Division dated 2 December 1985, Lot 2008 was divided into Sections A to W and the Remaining Portion.  The area of Section H was about 16,722 sq ft.

8.  On 6 October 1989, a portion of Section H of about 4,930 sq ft was resumed by the Government.  The remaining part became Lot 2008 HRP.

9.  On 25 March 1986, the Plaintiff, together with his brother (Law Ki Chuk) and mother (Madam Leung Ting Yee) became the registered owners of Lot 2008 HRP as tenants-in-common.  Later on 13 February 1987, Madam Leung transferred her share to the Plaintiff and his brother.

10.  On 7 December 1992 the Plaintiff acquired his brother’s share and has thenceforth become the sole owner of Lot 2008 HRP.

The 2^nd Defendant and its Predecessors

11.  As earlier noted, Lot 2008 HRP adjoins Lot 1819.  To the south of Lot 1819 is Section A of Lot 1092 (“Lot 1092A”).

12.  From 1954, Lots 1819 and 1092A were under the ownership of Madam Lui Kung Pik.  In 1994, both properties were transferred to Champwing Limited, which was a family company comprising Madam Lui’s 8 children as shareholders.  The transfer to Champwing was intended as a division by Madam Lui of her properties among her children.  Among her children was Mr Wong Fook Hing, who has testified at this trial on behalf of the 2^nd Defendant.

13.  Champwing sold both Lot 1819 and Lot 1092A to the 2^nd Defendant on 16 March 2009.

The Facts

14.  It is the case of the 2^nd Defendant that from about 1954, Madam Lui had operated a poultry farm on Lots 1819 and 1092A (“the Wong Family Properties”) by the name of Tung San Farm (東生農場) (“the Farm”).  It is alleged that the Disputed Portion was always incorporated within the fenced area of the Farm.  The Disputed Portion had been exclusively occupied by Madam Lui and her family.  Exclusive occupation remained unchanged on the ground notwithstanding that ownership of the Wong Family Properties was transferred to Champwing in 1994.  When the 2^nd Defendant later acquired the Wong Family Properties in 2009, the 2^nd Defendant also obtained possession of the properties together with the Disputed Portion as well.

15.  It is the case of the 2^nd Defendant that the relevant limitation period has run under the Limitation Ordinance by reason of the continuous and exclusive possession of the Disputed Portion by the 2^nd Defendant and its predecessors-in-title.

16.  At the invitation of the parties, I have visited the location in question.  In addition to the factual evidence, the parties have also adduced survey reports prepared on behalf of the respective parties.  The parties are content for me to have regard to those reports even though the experts had not been called to testify at the trial.  Their reports are by and large uncontroversial.

17.  As for the factual evidence, I accept Wong Fook Hing’s evidence that after acquiring the Wong Family Properties in 1954, Madam Lui and the Wong family moved to live in a house erected on Lot 1819.  Besides their residence, Madam Lui operated the Tung San Farm as a poultry farm.

18.  Mr Wong was then about 16 years old.  Although after 1954 there had been periods of time when Mr Wong had stayed away from Tong Yan San Tsuen, he returned regularly during weekends even while he was staying elsewhere.  On the other hand, there had been some years when Mr Wong was staying with Madam Lui at the Wong Family Properties.  After Mr Wong’s retirement at the age of 65, he had been living at the properties until they were sold in 2009.  Mr Wong, I accept, is in a good position to testify from his own knowledge regarding the state of occupation of the Wong Family Properties as well as that of the Disputed Portion.

19.  One notable feature of the landscape (which has been pointed out to me during the site visit) is that the Disputed Portion is situated on a terrace.  The terrace is at the same level as Lot 1819 and is appreciably higher than most other parts of Lot 2008 HRP.

20.  During the site visit, parts of a collapsed and rusty wire-mesh fencing remained in existence.  I accept on a balance of probabilities that the wire-mesh fences were put up by the Wong family in the 1950s to keep the chickens within the Farm.  I also find that the Wong family had enclosed the Disputed Portion within the wire-mesh fences as part of the Farm as it was thought that the boundary of their land ran along the terrace.  The Disputed Portion was used to store miscellaneous items used in connection with the Farm.

21.  Sometime in the early 1980s, a single-storey structure was built by Mr Wong’s brother.  According to the survey sheets, the structure (“the Temporary Structure”) was already in existence by 1984. It was used by Madam Lui to store livestock feed until about 1988 when she ceased to keep poultry.  It is significant to note that the Temporary Structure extended beyond the Wong Family Properties with its western end actually situated on the Disputed Portion.

22.  The wire-mesh fences had fallen into disrepair as Madam Lui was no longer keeping chickens on the Farm.  The Disputed Portion was not put to any specific use by the Madam Lui or the Wong family.

23.  On the other hand since about 1984, Madam Leung Yau Ho and her husband Mr Lee became neighbours of the Wong family.  They were the tenant on a piece of land to the south of the Disputed Portion which was identified as Short Term Tenancy 754.  Mr and Mrs Lee operated a cloth factory on their property.

24.  It was Madam Leung’s (Mrs Lee) evidence, which I accept, that in 1995 she had rented the Temporary Structure from Madam Lui for the purpose of storing cloth and rags as well as doing some packing in connection with her business.  Mr and Mrs Lee paid a monthly rent of $3,000 to the Wong family for the use of the Temporary Structure.  The Lee’s only ceased renting the Temporary Structure in March 2009 when the Wong Family Properties were sold to the 2^nd Defendant.

25.  Turning to the Plaintiff who, as already noted, became one of the co-owners of Lot 2008 HRP in 1986.  Since then two structures were built on their land and were used as workshops.  One of the workshops was let to a tenant who runs an iron work factory there.  The other workshop was until 2000 retained by the Plaintiff for his own business in the production of animal feed.  From 2000, it was also rented out to a car‑repairer who occupied it as a garage.

26.  Sometime in the 1990s, corrugated metal plates were erected as fences by the tenant.  The area bounded by the metal plates however did not include the Disputed Portion.  There was no disturbance of the wire‑mesh fencing put up by the Wong family, although by then the fences were already in disrepair.  The Plaintiff and his co-owners were evidently not aware at the time that the Disputed Portion (which lies on the terrace) was in fact part of Lot 2008 HRP.

27.  It was not until a survey conducted in 2006 did the Plaintiff realise that the Disputed Portion in fact formed part of Lot 2008 HRP.  I accept on the evidence that upon such discovery, the Plaintiff and Mrs Law approached Madam Lui and told her that the Disputed Portion in fact belonged to them (the Plaintiff).  In reply, Madam Lui said that if the land really belonged to the Plaintiff, it would be impossible for her or the Wongs to take it away from him or to sell his land.

28.  I further accept on the evidence that there had been subsequent occasions when Madam Lui told the Plaintiff of her intention to sell her properties and suggested that the Plaintiff should join her in selling the Disputed Portion. Madam Lui had also proposed to the Plaintiff to exchange the Disputed Portion for some of her property, but her proposal was rejected by the Plaintiff.

Relevant Limitation Period

29.  As already noted, Lot 2008 was the subject of a New Grant by the Government in October 1985.  There is no evidence before me that prior to 1985 the parcel of land in question was already granted by the Government to another lessee.  In the absence of such evidence, I would find that the land was in fact previously held by the Crown before the New Grant in 1985.  Accordingly, by the application of the proviso to Section 7(2) of the Limitation Ordinance, the limitation period will be either 60 years from the date when the right of action first accrued to the Crown, or alternatively the shorter period of 12 (or 20) years from 1985, whichever period first expires.

30.  On the facts of the present case, since the earliest time when adverse possession allegedly taken of the Disputed Portion is 1954 and not before, there is no question of expiry of a 60-year period. Therefore, the period first to expire under the proviso to Section 7(2) will be either 12 or 20 years from 1985, depending on whether the transitional provision under Section 38A(1) is applicable.

31.  Section 38A provides that:

“(1) The time for bringing proceedings in respect of a cause of action –

(a) To recover any land;

……

which accrued before 1 July 1991 shall, if it has not then already expired, expire at the time when it would have expired apart from the provisions of the Limitation (Amendment) Ordinance 1991 (31 of 1991).”

32.  The operation and effect of Section 38A is illustrated in the following passage of Cheung JA’s judgment in Yu Siu Cheuk v Realray Investments Ltd, CACV 181 of 2009:

“10. The plaintiff claimed that he entered into possession in 1979. By 1 July 1991 the cause of action by the defendant’s predecessor in-title to recover the property had not expired because the then limitation period was 20 years. By then the plaintiff would only have occupied the property for about 12 years. The time for bringing proceedings would only have expired in 1999. By virtue of 38A(1) the shortened 12 year limitation period is therefore not applicable.”

33.  Applying the same approach to the facts of the present case, since the Plaintiff’s cause of action under the proviso to Section 7(2) could only have accrued in 1985 at the earliest, by 1 July 1991 the limitation period has not expired.  Hence, by operation of Section 38A, the relevant limitation period for the purpose of the Plaintiff’s claim remains 20 years and is unaffected by the 1991 amendment to the Ordinance.

34.  Mr Chain, counsel for the 2^nd Defendant, however argued that the relevant limitation period should be 12 years, although at the trial he added 20 years as an alternative.  In support of his primary contention, Mr Chain argued that the cause of action in trespass accrued every day continuously.  The court need only be concerned with the events within the 12 years immediately before the commencement of the action.

35.  With respect to Mr Chain, I do not think that is the correct understanding of the effect of the transitional provision.  It is pertinent to note another passage in the judgment of Cheung JA in Yu Siu Cheuk’s case (supra):

“29. At the hearing before us, I raised the issue whether the plaintiff could also rely on 12 years’ adverse possession to defeat the title of the defendant. In the statement of claim the plaintiff has certainly pleaded that he has been in adverse possession of the property in excess of 20 years and also ‘in excess of 12 years’ before the commencement of the action. It is true that for the purpose of deciding whether a 20 years’ or 12 years’ limitation period will apply, the plaintiff has said that he has entered prior to the cutoff date of 1991 and hence has to establish a 20 years’ adverse possession. But if the objective evidence shows that adverse possession only began at a much later day but is long enough to cover a period of 12 years prior to the commencement of the action ……, I cannot see any reason why the plaintiff is not entitled to rely also on the shorted period to establish his claim.” (emphasis added)

36.  What is relevant for consideration is when it is alleged the adverse possession began.  In the present case, as adverse possession was alleged to have begun in the 1950s, the right of action would have first accrued before “the cutoff date of 1991”.  The transitional provision under Section 38A is therefore engaged and the limitation period remains 20 years.  It is only in cases where adverse possession is alleged to have begun after 1 July 1991 would the 12-year period be applicable.

Discussion

37.  In order to succeed, the 2^nd Defendant would have to establish adverse possession for 20 years before the commencement of these proceedings.

38.  Mr Ko, counsel for the Plaintiff, submitted that the fencing of the Disputed Portion was equivocal as it was not solely for the purpose of marking the boundary but at least partly for the reason of preventing the chickens from running away.

39.  In response, Mr Chain referred me to the following comments of Millett LJ (as he then was) in The Mayor and Burgesses of the London Borough of Hounslow v Minchington (1997) 74 P & CR 221 at p 233 (adopted by Etherton and Lewison LJJ in Terence Chambers v London Borough of Havering [2011] EWCA Civ 1576):

“So far as the defendant’s animus possidendi is concerned, Mr Lewison relied upon the fact that Mrs Ritter and after her the defendant or Mr Collin’s enclosure of the land was in order to keep their dogs in rather than other persons out. But their motive is irrelevant. The important thing is that they were intending to allow their dogs to make full use of what they plainly regarded as their land, and which they used as their land. They wanted to keep their dogs within the boundaries of their own land. That was a perfectly understandable usage, but the enclosure which it made necessary was inconsistent with any continuance of possession of the council. The defendant and his predecessors in title had to keep the council out if they were to keep their dogs in.”

40.  I am conscious that the facts of each case are different.  But I think the passage quoted above is helpful in illustrating the application of the principle.  As would be remembered in our case, the wire-mesh fences enclosing the Disputed Portion were put up by the Wong family in the 1950s.  To me, such an act is clear indication of their intention to take possession of the area including the Disputed Portion.  I also find it significant that the Temporary Structure, built by Mr Wong’s brother in the 1980s, was located partly on the Disputed Portion.  Until about 1988, Madam Lui had been using it to store livestock feed.  All the circumstances clearly indicate, and I so find, that Madam Lui and the Wong family had all along regarded the Disputed Portion as part of their property for the purpose of operating the Farm.  By enclosing it with fences, they had taken possession of the Disputed Portion and had unequivocally asserted exclusive possession over that area of the land.

41.  Mr Ko submitted that as from the 1980s, the Wong family’s possession over the Disputed Portion, even if previously found to exist, was effectively abandoned.  He referred in particular to the closing down of the Farm, the wire-mesh fences being allowed to fall into disrepair, the fact that the Disputed Portion was not put to any specific use, as well as the evidence of the Plaintiff and Mrs Law that there had been occasions when they had crossed over to the Disputed Portion to trim the trees.

42.  In this connection, I agree with Mr Chain’s submission that what is required to establish adverse possession is the taking of possession, and not continuous use.  I would adopt the following observations of Lewison LJ in Chambers v London Borough of Havering (supra):

“57. …… In addition at this point in his judgment he seems to have been looking for ‘continuous use’. But in my judgment continuous use is not the test. It is the taking of possession that is critical. If possession passed to Mr Chambers at any point then he would not have needed continuous use to have maintained possession: Bligh v Martin [1968] 1 WLR 804, 811; Generay Ltd v The Containerised Storage Company Ltd [2005] EWCA Civ 478 §49.”

43.  It is clear that even after Madam Lui had ceased to operate the Farm, she and the Wong family had continued in possession of the Disputed Portion, whether or not it had been put to specific use.  All the time, the Temporary Structure remained standing on part of the Disputed Portion, which the Wong family had rented out to Mr and Mrs Lee later in 1995. I do not consider the occasional presence of the Plaintiff or his wife on the Disputed Portion to trim the trees is sufficient to interrupt the possession of Wong family.  Indeed, as was held in Zarb v Parry [2012] 1 P & CR 10, once an adverse possessor has taken possession, time starts to run against the paper title owner.  In order to prevent time running against him, it would be necessary for the paper title owner to bring the factual possession of the wrongful possessor to an end, which would require the former to take back possession to the exclusion of the squatter.  The matters relied upon by Mr Ko are in my view quite insufficient to amount to either putting an end to the Wong family’s possession of the Disputed Portion, or proving that the Plaintiff had taken possession of that area.

44.  Mr Ko further referred to the conversations between the Plaintiff and Madam Lui in 2006 and on subsequent occasions.  It was submitted that the conversations evidenced abandonment of possession of the Disputed Portion by Madam Lui, or that she did not have the requisite animus possidendi at the relevant time.  Mr Ko submitted that Section 13(2) was engaged and the Disputed Portion had ceased to be in adverse possession.

45.  I do not agree.  I note that the issue here is not whether Madam Lui had accepted or acknowledged the Plaintiff’s title, but whether the conversations in fact demonstrated abandonment of factual possession or lack of intention to possess.  From the evidence already discussed, it is clear to me that Madam Lui and her family had enjoyed possession of the Disputed Portion through the years and that had remained so at the time of the conversations.  Rather than showing abandonment, in fact Madam Lui’s proposal to exchange the Disputed Portion for some of her own property indicates her intention to rectify her lack of paper-ownership over the Disputed Portion which she and her family had been in continuous possession over the years.

Conclusion

46.  For the foregoing reasons, I would dismiss the Plaintiff’s claim.  I would make a declaration in favour of the 2^nd Defendant that the Plaintiff’s right to claim possession of the Disputed Portion (as identified in the Statement of Claim) is time-barred as such right did not first accrue to the Plaintiff within 20 years before the commencement of these proceedings.  The Plaintiff’s title to the Disputed Portion has been extinguished by virtue of Section 17 of the Limitation Ordinance.

47.  I would also declare that the 2^nd Defendant has possessory title to the Disputed Portion by way of adverse possession.

48.  I would make an order nisi that the Plaintiff do pay the 2^nd Defendant’s costs of these proceedings.