YIM YAU YING v. WONG CHE (or CHEE) SING

DCCJ 1899/2019

[2024] HKDC 480

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1899 OF 2019

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JUDGMENT

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1.  This is an adverse possession claim.

Background

2.  The defendant is the registered owner of a building known as 50, 52 Battery Street, Kowloon (“the Building”) on Kowloon Inland Lot No. 8768 (“the Lot”). The plaintiff’s husband, Yeung Yuen (deceased) (“the late Mr. Yeung”) was a tenant of the Defendant by a written Tenancy Agreement dated 5 June 1969 (the “Tenancy Agreement”) regarding a flat within the Building known as 6^th Floor, No. 52, Battery Street, Kowloon, Hong Kong (“the Premises”).

The plaintiff’s case

3.  After signing the Tenancy Agreement, the late Mr. Yeung, the plaintiff and their 4 children (including the plaintiff’s witnesses, Ms. Yeung Yuk Ying (“YYY”) and Mr. Yeung Yu Tak (“YYT”)) moved into the Premises on 7 June 1969. The defendant attended the Premises every month to collect rent and issue a receipt.

4.  According to paragraphs 5-10 of YYY’s witness statement and paragraphs 5-10 of YYT’s witness statement (both witness statements being substantially identical), Trial Bundle p. 95-97 and p. 105-107):

a.  After the Tenancy Agreement expired on 6 June 1972, the late Mr. Yeung did not sign another written tenancy agreement with the defendant but instead (as I translate):

“renewed the tenancy orally (without specifying the rental period)… with an increase of monthly rent from HK$240 to HK$276, and then later in 1974 an increase of monthly rent from HK$276 to HK$330”

b.  The defendant last attended the Premises to collect rent in the afternoon of 2 March 1976. On this occasion, after collecting the rent and issuing the receipt for January 1976, the defendant informed the late Mr. Yeung that after this time, he would no longer attend personally to collect rent. Instead, he instructed the late Mr. Yeung to pay the rent directly into the defendant’s bank account, the number of which he wrote down on a piece of paper.

c.  The defendant did not turn up to collect rent in June 1976 so the late Mr. Yeung asked the plaintiff to pay the rent of February to April 1976 into the defendant’s bank account as instructed.

d.  Around mid-July 1976, the late Mr. Yeung told the plaintiff that he had tried to call the defendant on the telephone but could not contact him, and that they still had not received any receipt for the rent paid, so they decided not to pay any rent further.

e.  Around the end of July 1976, the late Mr. Yeung told the family that he heard from a neighbour, a Mr. Au, that the defendant had been working for the government but had left Hong Kong to escape investigation by the ICAC.

f.  The defendant had not re-appeared since 2 March 1976 nor sent any representative or agent to seek rent from the family. The late Mr. Yeung had not paid any more rent and had not attempted to contact the defendant since that one phone call in June 1976.

5.  Around late 1976, the plaintiff and the family had already treated the Premises as their own and they took care of the Premises as well as the common areas of the Building from then until present time (paragraph 9 of the Amended Statement of Claim, Trial Bundle p. 6).

6.  YYY and YYT gave examples of such in paragraphs 11-18 of their respective witness statements (Trial Bundle p. 97-100 and p. 107-110): painting and repairing of the walls, replacing electrical wiring, drainage, window frames, front gate etc. of the Premises, as well as, various works in the common areas of the Building including painting the walls, installing wiring cables and lightings on the 6^th floor, contributing towards replacement of front entrance gate of the Building etc.

7.  The 4 children had moved out of the Premises between 1980 and 1995. The late Mr. Yeung passed away on 28 October 2001. However, the plaintiff continued to occupy the Premises until the present day. (paragraphs 15 and 16 of the Amended Statement of Claim, Trial Bundle p. 8).

8.  The water supply to the Premises, previously registered under the name of the defendant, was changed to be under the name of one of plaintiff’s son, Mr. Yeung Yu Fai (“YYF”) on 18 October 1997. The electricity supply, previously also registered under the name of the defendant, was changed to be under YYT’s name on 15 October 2003. Bills from both supplies had all along been posted to the Premises and paid by the family (paragraphs 13 and 14 of the Amended Statement of Claim, Hearing Bundle p. 8).

9.  It is not in dispute that the defendant, via his solicitors, served a Notice to Quit to the occupants of the Premises on 25 January 2018.

10.  The plaintiff’s case is that the defendant’s title to the Premises has been extinguished pursuant to s. 17 of the Limitation Ordinance, Cap. 347 and the plaintiff has acquired a possessory title to the Premises.

Legal principles

11.  This is trite and not in dispute. I need not recite it in details here.

12.  In short, the burden of proof is on the plaintiff to prove that she has, in respect of the Premises: (i) factual possession; (ii) requisite intention to possess (“animus possidendi”); (iii) the possession was adverse, as of wrong; and (iv) for a period of 20 years or more.

Considerations

13.  Without even considering the dispute in evidence, there is one glaringly obvious flaw in the plaintiff’s claim.

14.  The plaintiff’s case is that she has acquired the animus possidendi since late 1976.

15.  However, the defendant has all along been dealing with the Ratings and Valuation Department (“RVD”) and paying for (when required) the rates of the Building. The defendant has only disclosed Demand Notes for rates dating back to the first quarter of 2018 in the Hearing Bundle. However, from the already voluminous documents disclosed (Trial Bundle p. 1033 to 1054), it is clear that there are no outstanding rates relating to the Building and the Premises. As such, I am satisfied that it can be reasonably inferred that the defendant has, all these years, kept his account in RVD in good standing.

16.  Of course, there is no dispute that (from the information sourced from RVD’s website as produced by the defendant) both the owner and the occupier are liable for rates but in the absence of any agreement to the contrary, liability for rates rests with the occupier.

17.  It is the plaintiff’s evidence that the plaintiff has not approach RVD for enquiry regarding rates payment until May 2018 (paragraph 23 of YYY’s witness statement and paragraph 23 of YYT’s witness statement, Trial Bundle p. 101 and 111). Even then, YYY (on the instruction of the plaintiff) only enquired about the payment of rates and did not make any attempt to change the name of registration at RVD. The plaintiff also does not claim that she has paid rates (as the occupier of the Premises) at any point of time.

18.  During cross-examination, YYY told the court that the reason that the plaintiff instructed her to approach RVD in May 2018 was because the plaintiff wished to sell the Premises. YYY also agreed that the plaintiff knew that as the “owner”, she should be paying the rates.

19.  On further questioning, YYY seemed to agree that although the plaintiff was all along aware of the need to pay rates since 1976, she did not seek to approach the RVD until 2018. When asked why the plaintiff did not approach the RVD in 1976, YYY explained that the plaintiff was healthy at the time and had not thought of selling the Premises. It was only in 2018 when the plaintiff found it difficult to walk up the stairs that she thought of selling the Premises and thus instructed YYY to approach RVD to seek to pay rates.

20.  On re-examination, YYY again confirmed that May 2018 was the first time that the plaintiff discussed paying government rates with YYY and also the first time that the plaintiff instructed her to approach the RVD.

21.  In any case, it is not in dispute that even now, the defendant is still the registered payee for rates: the Demand for Rates for April to June Quarter 2023 is still addressed to the defendant (Trial Bundle p. 1054).

22.  It is trite that:

“Intention to possess or aminus possidendi is the intention to possess the land in one’s own name and on one’s own behalf, to the exclusion of the world at large, including the owner with the paper title so far as reasonably practicable and so far as the process of law will allow. In the case of the paper owner, the slightest act done in manifestation of his title is sufficient evidence of that intention which may negative intention to discontinue or abandon possession. By contrast, for a squatter, he has to make it perfectly plain to the world at large by his actions or his words that he is enjoying the land openly as of right as if he is the rightful owner. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the court will treat him as not having the requisite intention and consequently as not having dispossessed the owner: Powell v McFarlane…” (paragraph 74 of the judgment of Chan Mei Lin v Lee Hong [2018] HKCFI 2441

23.  The plaintiff’s case was that the defendant has disappeared since March 1976 and has since abandoned the Premises.

24.  The fact that the defendant, as the paper owner, has all along been involved with the RVD and still is the registered payee for government rates is clearly sufficient as “the slightest act done in manifestation of his title” and therefore “is sufficient evidence of that intention which may negative intention to discontinue or abandon possession.”

25.  On the other hand, the plaintiff only sought to change the registration for water supply in 1997 and the registration for electricity supply in 2003. Further, she only enquired with RVD but never attempt to change the registration even in 2018. This is clearly a failure “to make it perfectly plain to the world at large by his actions or his words that he is enjoying the land openly as of right as if he is the rightful owner”. The plaintiff has not adequately demonstrated the requisite intention to possess in 1976 or indeed, even as late as in 2018.

26.  There are other evidence to show that the defendant did not have any “intention to discontinue or abandon possession” all along.  

27.  The defendant has produced evidence that he was involved with the Office of the Water Authority (the “Water Authority”, now called the Water Supplies Authority) since July 1977. There was, for example, a letter dated 12 July 1977 addressed to the defendant concerning a defective water meter of the Building (Trial Bundle p. 806-807), a water account dated 7 December 1979 addressed to the defendant (Trial Bundle p. 808-809), a letter dated 23 February 2000 concerning a problem with the fire service or communal water service of the Building addressed to the defendant as well as other registered consumer at the Building (including YYF who has registered by this time) (Trial Bundle p. 810-813).

28.  In this last letter, the Water Authority notified that the repair should be:

“carried out by a licensed plumber within 14 days and to report as soon as the work is completed…”

“…the Water Authority may disconnect a fire service or inside service if the consumer or agent, on receipt of a notice under Section 16, fails to carry out the repairs…specified on the notice.”

29.  The defendant also produced a letter dated 12 March 2019 from the Water Authority to a company called “俊海工程有限公司” discussing the work on the fire service water supply of the Building (Trial Bundle p. 814-815). The defendant claimed that this was his contractor. The plaintiff does not dispute this.

30.  More importantly, the daughter of the defendant, Ms. Lilian Wong (“LW”), has written to the Water Authority which replied in a letter dated 20 March 2020 that:

“Please be advised that rectification work is considered as complied with if the disconnection of fresh water supply is not carried out by this Department after due date of the repair notice.”

31.  There was no evidence from the plaintiff that water supply has ever been disconnected by the Water Authority or that the plaintiff has done any repair to, for example, the fire service or communal water service of the Building in 2000 subsequent to the relevant repair notice. As such, it can be inferred that the defendant must have, on balance of probability, complied with the requirements of the Water Authority all along.

32.  Further, the defendant also disclosed his handwritten notebook which contains 2 pages of records relevant to the late Mr. Yeung and the plaintiff (the “Handwritten Records”, Trial Bundle p. 993-1020 and Exhibit D1).

33.  Although the defendant has no mental capacity to give evidence in this trial, I have assessed the weight of the Handwritten Records by considering the following:

a.  the defendant disclose a Form TR9A from the RVD dated April 1995 concerning an increase in rent for the Premises (Trial Bundle p. 804);

b.  In the Handwritten Records, the defendant had accurately documented the telephone number of the Premises (as confirmed by YYY at the trial);

c.  It recorded failed attempts to contact the occupants of the Premises on 3 separate dates: 17, 19 May 1995 and 1 June 1995;

d.  It accurately recorded the then monthly rent and the increase in rent which corresponded to the Form TR9A;

e.  It also contained a name, Yeung Yu Keung, whom YYY confirmed was one of the sons of the plaintiff.

34.  Such details are therefore consistent with evidence from YYY and contemporaneous records like the Form TR9A. Further, the Handwritten Records also contain an abundance of details unlikely to be faked since such do not advance the defendant’s case (e.g. multiple dates of “failed” contacts). On balance, I am of the view that these are genuine and contemporaneous records of his attempts in around 1995 to demand an increase in rent from the late Mr. Yeung.

35.  Of course, the fact that I accept that this is genuine contemporaneous records does not mean that I must accept that some of the records (e.g. the record that on 27 June 1995, the late Mr. Yeung said he would only be willing to pay the new rent but not the arrears) to be accurate.

36.  However, at the very least, I accept that the Handwritten Records show that the defendant has contacted the late Mr. Yeung and the plaintiff in 1995 to chase rents and to seek an increase in rent. As such, the plaintiff’s pleaded case that “the Yeung Family heard nothing from the defendant” since March 1976 (paragraph 8 of the Amended Statement of Claim, Trial Bundle page 6) is clearly wrong.

37.  Having accepted that such encounters did occur in 1995, one might also question why the plaintiff never mentioned such encounters in any of her evidence. Surely, if the plaintiff and the late Mr. Yeung had truly treated the Premises as their own for some 20 years, the plaintiff should have provided evidence of how she and the late Mr Yeung had make it “perfectly plain” to the defendant “by their actions or their words that they were enjoying the land openly as of right as if they were the rightful owner”. One would reasonably expect that they would tell the defendant that they were the owners and politely asked him to leave. Certainly, the plaintiff would have given evidence of how they have outright rejected any attempt for rent negotiation.

38.  As such, although it must be fairly said that the defendant, for whatever reasons, has been quite neglectful in collecting rents and performing various maintenance works in the Building etc. over the years, he has shown reasonable evidence of acts “done in manifestation of his title” and such acts are sufficient to negate any “intention to discontinue or abandon possession”.

39.  According, I will dismiss the plaintiff’s claim.

The Tenancy Agreement

40.  In her own witness statement, YYY claimed that after the Tenancy Agreement expired in 1972, the tenancy was renewed orally without specifying the rental period. Despite this, YYY claimed in court that in fact, the late Mr. Yeung orally renewed the agreement with the defendant for a period of two years, and after that expired in 1974, orally for another two years.

41.  On questioning, YYY accepted that she did not witness such oral agreements and was not told by anyone: she was merely looking at the rental receipts and assumed that any rent increase would correspondence to a new rental agreement, and the rental increase was in 1974 or roughly two years.

42.  I would not accept such new evidence from YYY: the rental increase was in February 1974. If there was a two-year rental agreement, the rental increase should be in June 1974. As such, YYY self-admitted pure speculation is in any case inconsistent.

43.  Therefore, there was no convincing evidence to support any express agreement for a fixed term tenancy after the Tenancy Agreement expired.

44.  As submitted by Mr. Chan (counsel for the defendant), under the circumstances, upon the expiry of a tenancy for a fixed term (i.e. the Tenancy Agreement), given that there was no express agreement on renewal or on any other terms, the fixed term would automatically be converted to a periodic tenancy by operation of law, of the same duration as the periodic rental payable under the expired tenancy.

45.  Further, it is trite that a periodic tenancy does not expire without notice at the end of the period or each succeeding period which is determined only by a proper notice to quit (Halsbury’s Laws of Hong Kong [235.191]).

46.  Therefore, after the expiry of the Tenancy Agreement, the late Mr. Yeung became a hold over tenancy of a monthly tenancy. (Ford Chung v Ho Wai Man [1959] HKCU2)

47.  This periodic tenancy is continued until a notice of termination was served either by the tenant or the landlord (Halsbury’s Law of Hong Kong [235.192]).

48.  There was no evidence that the late Mr. Yeung had served such a notice. Of course, if he had done so, his status would convert from a tenant to a trespasser.

49.  As such, I would not accept the plaintiff’s claim that the tenancy agreement was in any way “invalid” since late 1976.

50.  Indeed, it was the defendant who served the Notice to Quit dated 25 January 2018 (Trial Bundle C2 page 963-964). Therefore, the defendant’s right of recovery must be deemed to have accrued on that date (Halsbury’s Law of Hong Kong [230.833] and Section 9(1) of the Limitations Ordinance, Cap. 347).

51.  The defendant is counter-claiming against the plaintiff for rent for 6 years in arears and/or mesne profits at the then market rate (paragraph 20A(1) of the Amended Defence and Counterclaim, Trial Bundle p. 17).

52.  I accept that the Rateable Value of the Premises according to the Demand for Rates of the Ratings & Valuation Department for the 2^nd Quarter of 2019 is HK$64,800 per annum or HK$5,400 per month (paragraph 20A(2) of the Amended Defence and Counterclaim, Trial Bundle p. 17).

53.  As such, the rental arrears for 6 years and/or mesne profits should amount to HK$388,800 and continuing at the rate of HK$5,400 per month or HK$178 per day (paragraph 20B of the Amended Defence and Counterclaim, Trial Bundle p. 17) until delivery of vacant possession.

Order

54.  I will according give the following order:

a.  The plaintiff’s claim be dismissed;

b.  There be a declaration that the defendant is the legal and beneficial owner of the Premises (otherwise known as 6^th Floor, No. 52, Battery Street, Kowloon, Hong Kong situated on Kowloon Inland Lot No. 8768);

c.  The plaintiff do deliver vacant possession of the Premises;

d.  The plaintiff do pay arrears of rent and/or mesne profit specified in paragraph 53 above;

e.  There be interest payable on the sum of HK$388,800 plus outstanding rent from date of the Writ (15 April 2019) to the date of this Judgment at Judgment rate from the date of this Judgment until the date of payment; and

f.  Costs of the action be to the defendant to be taxed if not agreed with certificate for counsel.