KAN KAM CHO AND ANOTHER v. KAN CHIU NAM RAYMOND AND ANOTHER

cacv 91/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 91 of 2005

(on appeal from HCA NO. 18217 of 1999)

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J U D G M E N T

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Hon Rogers VP:

1.  This was an appeal from a judgment of Deputy High Court Judge Saunders given on 21 January 2005.  The matter before the judge was a claim for an injunction to restrain trespass and for an order for delivery up of vacant possession of what it is now admitted to be part of the plaintiffs’ land.  The defence to the claim that is relevant on this appeal is based upon the Limitation Ordinance Cap. 347 (“the Ordinance”).  The allegation is that for more than 20 years prior to the commencement of the action the defendant had undisturbed possession of the relevant part of the land to the exclusion of the plaintiffs and their predecessor in title and had exercised acts of ownership over that part of the land.  There was an alternative plea based on estoppel, that was not pursued on this appeal.

2.  The judge below held that the defendant had had 20 years adverse possession but the defence failed because of the provisions of the New Territories Leases (Extension) Ordinance, Cap. 150 (“the Extension Ordinance”).  At the conclusion of the hearing of this appeal, judgment was reserved which we now give.

Background

3.  The land in question is in Tai Tau Leng Village, Sheung Shui in the New Territories.  The plaintiffs’ land is identified as Lot 3443.  On one side it is bordered by Lot 22, which does not feature as part of this case save in one very minor respect.  On the other side it is bordered by the defendant’s land which is Lot 3590.  The three lots together are no more than 37 ft 5 inches wide.  As long ago as prior to 1898 a house had been erected on Lot 22.  That house remained at least until Lot 3443 had been purchased by the plaintiffs’ father in May 1958.  In that year the plaintiffs’ father built a single storey house on his Lot 3443.  Because there was a house not only on Lot 22 but also on the defendant’s Lot 3590, the plaintiffs’ father found it unnecessary to build sidewalls to his house but used the walls of the houses on the other two lots to form the east and west walls of his house, which was in the middle between the two other houses.  The roof of the house built on Lot 3443 was supported by wooden beams which were erected on top of posts and arranged parallel to the walls of the other two houses.

4.  In about 1983 the house on the defendant’s Lot 3590 was demolished and rebuilt.  Based on aerial photographs taken in November 1983 the judge came to the conclusion that at the time that the defendant’s new house was being built there was no roof on the house on the plaintiffs’ Lot 3443.  By the time of the trial it was admitted that the defendant’s house encroached upon the eastern part of Lot 3443 by 0.554 metres (approx. 1 ft. 10 inches) at the north and by 0.638 metres (approx. 2 ft. 1 inch) at south of the Lot.  There remained two major issues.  The first was whether the new house built on the defendant’s Lot 3590 had extended further than previously and the encroachment on the plaintiffs’ Lot 3443 had commenced when the new house was built or whether the new house was built to the same dimensions as the previous house.  The other issue related to the effect of the Extension Ordinance.  The judge resolved the latter issue on the basis of the decision of this court in Chan Tin Shi v Li Ting Sung and Others CACV 71 of 2003.  Subsequent to the judgment in the court below, the Chan Tin Shi case was heard in the Court of Final Appeal.  As regards the present case, the effect of that decision is that the defendant is entitled to rely upon occupation of the plaintiffs’ lot which occurred prior to the coming into effect of the Extension Ordinance.  Since the judge decided the present case on the basis of this Court’s decision, his decision in that respect now falls to be reversed.

5.  What remains, therefore, is the question as to when the house built in 1983 on Lot 3590 encroached for the first time on Lot 3443.  In that respect the judge heard evidence from the first plaintiff and his sister as well as from their mother and from witnesses on behalf the defendant and also heard evidence from witnesses who were experts in photogrammetry.  In brief the judge considered that he could not rely on any of the evidence from either the plaintiffs or their mother or sister or from the defendants.  He resolved the issue on the basis of the photogrammetry evidence.  On the basis of that evidence the judge concluded that prior to the reconstruction of the house on Lot 3590 in 1982/1983 the dwelling on Lot 3590 encroached upon Lot 3443.  He considered that there was no greater encroachment by the new building than there had been by the old building and he held that the encroachment had continued unchallenged for a period of well in excess of 20 years.

This appeal

6.  On this appeal the plaintiffs have elected not to proceed with an argument that the relevant section of the Limitation Ordinance is contrary to the Basic Law.  For that reason it would be inappropriate for this court to make any decision thereon, particularly as no detailed argument has been addressed.  The matter is of some concern.  Whereas it might have been appropriate in centuries past in other jurisdictions where unregistered land was concerned to resolve issues of uncertainty in respect of title to land by means of a rule preventing litigation after a set number of years, the position may well be different now where there is, at the least, some form of registration of land. 

7.  The application of the provisions of the Ordinance in relation to land in Hong Kong can clearly involve injustice.  A party who has wrongfully appropriated land to himself can simply, by reason of that appropriation, deprive another, who is indisputably the rightful owner, of his land.  Matters are worse because in Hong Kong the original owner will inevitably hold the land under a lease from the Government under which he is obliged to pay rent.  That rent can now be adjusted according to the rateable value.  Whereas, in some cases, this matter can be brushed aside as being an unlikely event, the situation could be exacerbated if a squatter enhances the value of the land and causes the rateable value to increase at no cost to himself.  This area was described by Litton NPJ in the Chan Tin Shi case as a troubling anomaly.  In the present case the plaintiffs will undoubtedly have to pay Government rent in respect of the whole of the land to which they have title irrespective of the fact that they are unable to remove the defendant from part of it.  It might be said, however, that it would be better for this matter to be addressed by law reform, as has happened under the Land Registration Act 2002 in England, rather than by means of the blunt instrument of the courts striking down legislation as being unconstitutional.

The measurements from aerial photographs

8.  As already indicated, the judge based his finding that the defendant’s house as it existed at present extended no further than the earlier house which had been on the site prior to 1982 on the photogrammetry evidence.  There was no specific issue raised as to this in the respondent’s notice and the respondent’s skeleton argument did not seek to challenge the findings made by Dr King, the expert in photogrammetry called by the defendant.  His findings in this respect were summarized in Appendix B of his supplemental report contained in a letter dated 31 August 2001.  Those findings are set out below:

“   Appendix B

Summary of building width ratios measured from Photos, Plans and on Ground
at different years

Year	Type of Measurement	SUTHL 22 d-c	Lot 3443 c-b	Lot 3590 b-a	Remarks
1964	Stereoscopic measurement from Photo	1.32	1.00	1.42	Old Buildings
Direct measurement from Photo	1.24	1.00	1.39	Old Buildings
1972	Direct measurement from Photo	1.26	1.00	1.35	Old Buildings
1985	Direct measurement from Photo	1.21	1.00	1.32	New Buildings
1968	Direct measurement from Plan	1.09	1.00	1.27	Old Buildings
1976	Direct measurement from Plan	1.07	1.00	1.28	Old Buildings
1987	Direct measurement from Plan	1.10	1.00	1.30	New Buildings
1999	Ground measurement by Helen Chan	1.22	1.00	1.34	New Buildings
1999	Ground measurement by Henry Chan	1.22	1.00	1.35	New Buildings

”

9.  In his first report dated 26 October 2000 Dr King had estimated the width of the defendant’s house as it existed in 1964 as being 4.4 metres at the north end (i.e. b-a in Appendix B set out above) and 4.5 metres at the south end.  On the assumption that the north east corner of the defendant’s house did not extend beyond the boundary of the lot, the judge held that this would have entailed the defendant’s house encroaching on the plaintiffs’ land to a similar extent as it does at present.

10.  The plaintiffs’ expert, Mr Thomas Lee, had referred to a number of matters which he said would lead to the defendant’s calculations being unreliable.  The first was the overall accuracy of measurements which could be taken from an aerial photograph.  Because of the inherent distortions which come from the photographic process and the reproduction of a negative in the form of a positive print, such as was used by Dr King, there would be unavoidable inaccuracies.  These would vary from part to part of the particular photograph and the average could be calculated on a statistical basis which is referred to as the root mean square error (“RMSE”).  Although this expression sounds complicated, it is in essence quite simple.  Various data points are taken and the distance is measured from the point to a point on the photograph.  The deviation of the points on the photograph from their true positions are calculated.  The values are then squared.  Then all the values for all data points are added up and divided by the number of points.  The value obtained is the mean square error.  The squaring is done so that negative values do not cancel positive values.  The RMSE is simply the square root of the mean square error.  The RMSE is thus a statistical calculation of the average error.

11.  Importantly, the plaintiffs’ evidence also turned upon the unreliability of using the photographs to measure the distances involved in this case, particularly positive photographs, because of the difficulty in identifying the exact pixel which denoted the outer extremity of a wall.  In this respect Dr King gave evidence that one pixel on the aerial photograph represented 77 mm.  Hence three pixels would represent something in the order of 2.31 cm which is something slightly more than 9 inches.

12.  The judge said at paragraph 23 of the judgment:

“I am satisfied having regard to the short distance being measured in this case no issue arises as to an RMSE error.”

13.  In so saying I can only presume that what the judge must have meant was that because the measurements with which Dr King was concerned involved a small area of the photograph, the errors which were inherent in the photographic and reproductive processes in respect of the whole of the photograph could be discounted and that there were unlikely to be major discrepancies in the small area with which this case is concerned.  The errors which had been calculated were arrived at having regard to a larger area of the photograph.  Put in those terms the conclusion to which the judge came should not be overturned by this court although for 2 reasons I might, myself, have been much more sceptical than the judge.  In the first place the data points on the photographs and on the plans used to calculate the RMSE were in the vicinity of the relevant lots and in a comparatively small area of what, we were told, was a very much larger photograph.  Secondly, the discrepancies noted may well have been indicative of the difficulty in identifying the correct pixels which identified the edge of the relevant walls; this is a matter referred to in the next paragraphs.

14.  What is, perhaps, of more concern is the finding at paragraph 24 where he said:

“It is right, as Mr Lee suggested, that it can be variations in measurement depending upon which particular pixel was chosen for the measurement.  Having regard however to the extent of the encroachment and satisfied that the difference that might result from the various appropriate pixels which may be selected is so small that this issue may be put aside.”

15.  Having regard to the fuzziness of the photographs as demonstrated in some of the reports filed on behalf of the plaintiffs and also having regard to the evidence of Dr King as to the discrepancy which might have arisen if the wrong pixel were chosen to be the basis of the measurement, I would have been more reluctant than the judge to have accepted the photogrammetry evidence as the basis of the decision.  Since however this was not the foundation of the appeal and my own measurements of the photographs through from 1964 to 1985 made using a Vernier caliper with an accuracy down to 0.02 mm concur with the conclusion that the aerial photographs do tend to show that the defendant’s house as it presently exists does not extend further than that the house which existed in 1964, I am prepared to accept that it would not be right to disturb that finding.

The points taken by the plaintiff on this appeal

Lot 3443 had been let out from time to time

16.  It was said that the house on the plaintiffs’ Lot 3443 had been let out from time to time in particular between May 1965 and May 1984.  It was said that during the period during which the house had been let out time would not run against the plaintiffs under the Ordinance.  It was said that whatever the position was under the Limitation Acts in the United Kingdom they dealt with an estate in fee simple.  The argument ran that an estate in fee simple was an estate in possession whereas in Hong Kong the holder of an estate from the Crown or Government which had been leased to another party held an estate in reversion or remainder.  The primary support for the proposition came from the judgment of Lord Cozens-Hardy MR in Wakefield and Barnsley Union Bank, Limited v Yates [1916] 1 Ch 452 at 457.  That distinction was disapproved by the House of Lords in the case of Fairweather v St Marylebone Property Co. Ltd [1962] 2 WLR 1020: see the speech of Lord Radcliffe at page 1027.

17.  The proposition that an owner of land in Hong Kong may prevent time running under the Ordinance by letting his land after a squatter has commenced adverse possession would be incongruous.  It is not supported by any authority.  In my view on basic principles it must be clearly wrong.

18.  In any event in this case the evidence was clear that the plaintiffs and their predecessor in title had only rented out the house as it existed on the lot and had not rented out Lot 3443 as such.  Given the encroachment by the defendant’s house on to the plaintiffs’ Lot 3443 there could have been no letting of the part encroached on at the time.

The gap

19.  The next point taken on behalf of the plaintiffs was that the judge had not considered the question of a gap which was said to have existed between the posts holding up the roof beams and the walls of the first house on the defendant’s lot.  The first plaintiff’s evidence was that the house on the defendant’s land which had been there when his father first built his house in 1958 had been constructed with side walls made of mud and straw.  The same was true of the house on Lot 22.  The plaintiffs’ father had constructed his house with front and rear walls made of brick.  The roof, as already noted, was supported by beams which were held up on posts.  The judge noted in paragraph 17 of the judgment that the first plaintiff and his sister gave evidence that prior to the construction of the defendant’s present house there was a sufficient gap between the poles which supported the roof beams of the plaintiff’s father’s house for them to be able to walk through the gap between the poles and the walls, when they were children.

20.  It is evident from the photographs which were available at the trial that the roof beam adjacent to the defendant’s present house is, at the very least, cemented against the wall of the defendant’s present house.  It is impossible to tell from the photographs whether it is embedded in the wall and we were informed that there was no inspection of property which would have determined the matter.

21.  Based upon those facts Mr Yip, who appeared on behalf of the plaintiff, argued that the judge had omitted to take this matter into account.  Whilst other evidence which the plaintiffs and their witnesses had given might be discounted by the judge, it was said that this was evidence which was inherently believable.

22.  As Mr Mok, who appeared on behalf of the defendant, pointed out this matter only came out in oral evidence and was not predicated in any of the written witness statements.  He argued that it would have been an obvious point to have made at an early stage if it had been correct.  There is also the point that in the period of 1982/3 it would appear that the roof on the plaintiffs’ father’s house had been removed.  In so far as anything can be determined from the photograph at the time it would appear that there was scaffolding surrounding the house being erected on the defendant’s lot.  Whether or not the poles and beams which supported the roof on the plaintiffs’ father’s house had been removed and only replaced once the defendant’s new house had been completed is another imponderable.

23.  In paragraph 19 of the judgment the judge had said that he was satisfied that it would be “quite unsafe” to rely upon any of the oral evidence from either the plaintiffs or the defendant.  Having considered large sections of the transcript it is a clearly the case that much of the oral evidence was inherently unbelievable.  It was therefore open to the judge to take the course that he did in respect of the oral evidence.  Whether another judge might have accepted this part of the evidence is a moot point.

Pegging of the boundary of Lot 3590

24.  In the affirmation made by Kan Chau Chi who had been the manager of the defendant T’so, it was stated at paragraph 8 that the boundaries of the Lot 3590 had been demarcated by pegs placed in position by staff of the District Office in about 1952.  Based on this statement Mr Yip sought to argue that that would have meant that the first house erected on that lot would have been within the confines of Lot 3590.  However, as Mr Mok pointed out, the whole of the affirmation has to be taken together and in paragraph 13 it is clearly stated that the new house built in 1982/3 was constructed within the same area and that the boundaries of the earlier house and the later house were exactly the same.

The overhang

25.  Mr Yip also took this court to various parts of the transcript of the evidence at the trial and to various photographs in an attempt to demonstrate that the judge may well have underestimated the extent of the overhang of the roof of the house which had been on Lot 3590 originally.  This might have made a difference in the interpretation of the aerial photographs since an extended overhang might have led the 1964 photographs and those prior to 1982 being interpreted on the basis that the defendant’s house walls were further out towards and on Lot 3443 than was the case.  Whilst many of the points appeared valid, for example evidence was given by the experts in photogrammetry as to the likely extent of the overhang of the tiles on the previous house on the defendant’s lot, it would appear that this was clearly beyond their expertise.  In so far as questions were asked by the court of those witnesses in respect of the overhang this was inadmissible evidence.  Nevertheless, the evidence taken in its totality including that of the photographs of the older houses in the village appeared to me to be so inconclusive that it would not be possible for this court to draw any firm conclusions on the matter.

Conclusion

26.  In the light of the foregoing, I regret I have to conclude that this appeal should be allowed and the respondent’s notice dismissed.  There should be an order nisi of costs in favour of the defendants.  The result of this appeal gives me little satisfaction.  Not only has the defendant illegitimately appropriated to itself part of the plaintiffs’ land but it has done so in circumstances where if their original defence was straight forward it did not consider that it had encroached.  The result leaves the plaintiffs having to pay rent for the land so encroached.  This result is achieved on the basis of evidence which was far from ideal.

Hon Le Pichon JA:

27.  I agree.

Hon Sakhrani J:

28.  I also agree.