ASIAN WELL TECHNOLOGIES LTD v. LEE YEE MAN AND OTHERS

CACV 595/2018

[2020] HKCA 65

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 595 OF 2018

(ON APPEAL FROM HCA NO. 467 OF 2013)

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J U D G M E N T

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Hon Cheung JA:

I. Introduction

1.1  The plaintiff is the registered owner of a piece of land in Sai Kung known as the Remaining Portion of Lot No. 359 in Demarcation District No. 214 (‘RP 359’).  On this land is a house (‘House 220’) now occupied by Mr and Mrs Cheng who control the plaintiff.

1.2  Next to RP 359 is the land known as Section C of Lot No. 359 in Demarcation District No. 214 (‘SC 359’).  Lee Yee Man (the first named defendant) (‘Lee’) is the registered owner of this land and a house (‘House 219’) is built on this land.  Lee and her husband Yau Sek Wah (the second named defendant) (‘Yau Senior’), her son Yau Ying Yeung Dammy (the third named defendant) (‘Yau Junior’) and other family members live in House 219.

1.3  The plaintiff claimed that the defendants have occupied and trespassed certain portions of land in RP 359 and by a writ dated 14 March 2013 sought, amongst other relief, an order requiring the defendants to vacate these portions of land.  These portions of land are identified in the plan attached to the judgment below as Areas X1, X2, Y, Z and Area A.

1.4  The defendants contended that they have been in adverse possession of the Areas X1, X2 and Y for 20 years.  They claimed a possessory title over these areas.  They had originally claimed for Area Z as well but the claim was abandoned on the first day of the trial.  They also claimed that they had acquired a right of way over Area A. 

1.5  Mimmie Chan J decided that the defendants acquired a possessory title over Area X1 and Lee is entitled to a right of way by reason of easement by prescription over a path to pass through Area A.  She rejected the other claims of the defendants.

1.6  The plaintiff now appeals.

II.  Facts

1)  Area X1

2.1  Yau Senior was the owner of RP 359 between 1976 and 1979.  There were later changes in ownership, but for the purpose of this case it is sufficient to state that in 1982 Getright Limited became the owner and House 220 was built in 1983. After a few more changes in ownership, one Mr Merrett became one of the joint owners in 2005 and in 2011 the plaintiff became the owner and the Chengs took up residence in House 220 in 2012.  They discovered the defendants had occupied part of RP 359 after they acquired the land.

2.2  SC 359 originally belonged to the relatives of the defendants.  Lee became the owner in 1987 but her family including Yau Senior and Yau Junior have been residing in House 219 since the 1970’s.

2.3  Area X1 is a narrow lane between House 220 and House 219.  The Judge found that in 1997 Yau Junior put up a glass panel at the back of Area X1.  The panel was attached to the walls on two sides, and hinges were put in place to support the pane to stand up.  Yau Junior also constructed a glass cover over Area X1 and in 1999 he used canvas to extend the glass cover.  Yau Junior was married in 2003 and Area X1 was used by his family as a kitchen with a kitchen stove, cooking utensils and other kitchen items.  Later, another glass panel was installed at the entrance to Area X1.  This front panel was installed next to a stone column.  The glass panel and the stone column effectively obstructed entrance into Area X1 from the open area in front of House 219.  The side of Area X1 between the stone column and the wall of House 219 remained open, but for a person to gain entry into this area from the side, would require him to step into the covered terrace of House 219, and then to enter what was obviously a kitchen area of House 219.

2.4  In 2005, Mr Merrett, the owner of House 220 carried out some construction work on the outer wall of House 220.  According to Yau Junior, he also engaged workers at the same time to construct a brick wall to effectively enclose Area X1 and to extend the canopy over the lane.  From then on the Yau family had used Area X1 as part of House 219 and as their home.

2)  Area A

2.5  There was originally a house built on RP 359 but it was demolished by the early 1980’s and the area became an open space until 1983 when Getright Limited built House 220. 

2.6  Yau Junior claimed that since 1982, he and members of his family had consistently and continuously, on a daily basis, passed through Area A and the open Government land in front of House 219 and House 220, in order to go from House 219 to the main road and back.  He claimed that they had never been stopped in their passage by any of the owners of House 220 and RP 359. 

2.7  Mr Merrett who was called by the plaintiff as witness accepted that since he acquired RP 359 in 2005 he had seen the Yaus passing through Area A on a regular basis and he had never stopped them from using Area A as a means of access to, and from, House 219.  This was so, and the Yau family’s use of Area A had continued, notwithstanding that he had in 2006 demolished a low wall and small gate (identified as G1) which the Yaus had built in Area A in early 2001.

III.  The Judge’s decision

1)  Area X1

3.1  The Judge found the defendants had established adverse possession from 1997 for more than 12 Years.  She held that, bearing in mind the nature, configuration, size and location of Area X1 and House 219, the Yau family’s act of putting up the secured glass panel at the back of Area X1 in 1997, the glass cover above it at about the same time, and later, the erection of another glass panel at the front in 2003, adequately demonstrated to the world at large of their intention to exclude others from entering into and using Area X1. 

2)  Area A

3.2  The Judge found that the Yau family had acquired an easement by prescription over Area A since 1982 :

‘ 43. There is nothing to dispute Yau Junior’s evidence, which I accept as credible, that he and his family had been using and going through Land A since 1982, without any interruption or obstruction by any of the owners of RP 359. I consider that in view of the situation of RP 359, it is credible and probable that the Yau Family would have gone through RP 359 after the House on RP 359 had been demolished in the early 1980’s, and to have continued to use the route of going around House 220 after it was built in 1983. This would necessitate their crossing the open Government land in front of SC 359 and RP 359 and then through Land A which was not built on. With regard to continuity of use and enjoyment, Mr Chan highlighted on behalf of the Yau Family that it is not necessary to show “ceaseless user by day and night”. User whenever circumstances require it is normally sufficient, provided the intervals are not excessive. (Para 28-058, The Law of Real Property by Megarry, 8th Edition, and the cases cited therein.)’

IV.  Principles

1)  Overview

4.1  Although it has been said that there is a growing antipathy to the acquisition of legal rights by prescription or adverse possession : China Field Ltd v. Appeal Tribunal (Buildings) (No 2) (2009) 12 HKCFAR 342 per Lord Millett at [374], the law on adverse possession and easement by prescription is well established in the numerous judgments of the Hong Kong courts.

2)  Adverse possession

4.2  It is sufficient to state that the claimant must establish full factual possession and intention to possess to the exclusion of the rest of world including the true owner.  See Incorporated Owners of San Po Kong Mansion v. Shine Empire Ltd (2007) 10 HKCFAR 588 applying Powell v McFarlane (1979) 38 P&CR 452.

3)  Easement by prescription

4.3  Easement by prescription is the acquisition by the owner of a dominant tenement of a right of way or similar right over a servient tenement through the acquiescence of the owner of the servient tenement in the former’s continuous and uninterrupted use of the right of way for over 20 years.

4.4  Lord Millett in China Field Ltd held :

‘ 71. Such user must be as of right, that is to say not by force, stealth or licence of the owner of the dominant tenement, and must have continued without interruption for at least 20 years.’

4.5  The focus is on acquiescence by the owner.  Megarry and Wade : The Law of Real Property (8^th Ed), [28-049] stated :

‘ The essence of the rule is that the claimant must prove not only his own user but also circumstances which show that the servient owner acquiesced in it as in an established right :

“The whole law of prescription ... [rests] upon acquiescence ... I cannot imagine any case of acquiescence in which there is not shown to be in the servient owner: 1, a knowledge of the acts done; 2, a power in him to stop the acts or to sue in respect of them; and 3, an abstinence on his part from the exercise of such power.” ’ [citing Dalton v Angus & Co (1881) 6 App Cas. 740 at 773, 774, per Fry J.]

4)  Derogation from grant

4.6  It is well established that a grantor is obliged not to derogate from his grant.  Megarry and Wade [19-023] summarised the position :

‘ 2. Obligation not to derogate from his grant

   (a)  The obligation.  It is a principle of general application that a grantor must not derogate from his grant as “a man may not give with one hand and take away with the other”.  This obligation binds not only the grantor himself but persons claiming under him; and the right to enforce it passes to those who claim under the grantee.  In the case of leases, the covenant for quiet enjoyment will often extend to conduct which might be construed as a derogation from the landlord’s grant; but acts not amounting to a breach of the covenant or to a tort may nevertheless be restrained as being in derogation of the grant.’

4.7  In Rank Profit Industries Ltd v. Secretary for Justice [2009] 1 HKLRD 194, Tang VP (as he then was) reviewed a number of authorities in this area. He emphasised that these decisions turned on their own circumstances.

5)  Illegality

4.8  In Loyal Luck Trading Ltd v Tam Chun Wah [2008] 4 HKLRD 681 [43-50] this Court held a tortious act in itself does not prevent the prescriptive acquisition of private right of way.  This Court held that the use of access road over the defendant’s land was not unlawful even if the road leads to the plaintiff’s illegal storage site contrary to the criminal provisions of the Town Planning Ordinance.  Megarry and Wade [28-047] summarised the position on illegality :

‘ While the conduct giving rise to a prescriptive claim is always likely to have been unlawful in the sense of tortious, the extent to which the claimant’s contravention of the criminal law may prevent the acquisition of an easement or profit by long use is more contentious. It had been asserted judicially that the court “will not recognize an easement established by illegal activity.” This principle was, however, considered to have been too widely stated in a case involving the vehicular access to domestic properties over privately owned common land. By s. 193 of the Law of Property Act 1925, it is an offence, punishable by a fine, to drive a vehicle upon common land “without lawful authority”. For over 50 years, owners of properties adjoining a common had gained access to their homes by driving from the highway along tracks and roads on the common, although the owner of the common had never consented to such use.  The House of Lords held that the unlawfulness of the owners’ actions did not prevent the prescriptive acquisition of private rights of way over the common, because it would have been possible for the owner of the common to make a grant of such easements, and by doing so to confer dispensation from criminal liability.’

V.  Grounds of appeal

1)  The plaintiff’s pleaded case at trial

5.1  A number of grounds of appeal are advanced against the Judge’s decision on adverse possession.  The first is that the Judge was wrong to find adverse possession began in 1997 for a period of 12 years when the defendants’ pleaded case (as amended on the second date of trial) was that they had adverse possession for more than 20 years : in respect of Area X, the possession began from 1980 and in respect of Area A, 1982.  The original pleading was that they were in adverse possession for 12 years.

5.2  In my view there is no merit in the argument.  This Court has stated in Yu Siu Cheuk v Realray Investments Ltd (unrep, CACV 181/2009, 10 November 2009) that the claimant is entitled to rely on a shorter period of adverse possession if there is evidence to support it :

‘ 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 (namely in February 1995), I cannot see any reason why the plaintiff is not entitled to rely also on the shorter period to establish his claim.’

5.3  The issue was squarely raised and argued below.  Although the plaintiff in its closing submission referred to the defendants’ case of a limitation of 20 years, it went on to address the issue of 12 years’ limitation and contended that it was not sufficient if factual possession only began in 2003.

2)  Findings on adverse possession

5.4  The plaintiff then challenges the factual finding on adverse possession of Area X1.  It relies on Lee Theatre Realty Ltd v. Tong Wah Jor and Others (CACV 279 of 2009; 2 May 2013) a case involving a narrow lane, where it was held that :

‘ 28. ...... if pedestrians could use and actually used the Lane for access throughout the day, then this is certainly material upon which the Judge could find that the defendants had not exclusive possession to the whole area that they had claimed adverse possession.’

5.5  It submitted that Area X1 was accessible by anyone including any stranger from the front side of the defendants’ land.  The evidence of Madam Chan (Yau Junior’s wife) accepted such free entry in that period up to its full enclosure in 2005. 

5.6  Again this is not a point of substance.  The Judge had actually considered the point of access by others which I have already mentioned.  The Judge held :

‘ 28.  Moreover, by 2003, the front part of the lane comprising Land X1 was also enclosed by another glass panel, which was installed next to the round stone column.  The glass panel and the stone column effectively obstructed entrance into the lane from the open area in front of House 219.  The side of the lane between the stone column and the wall of House 219 remained open, but for a person to gain entry into the lane from the side, this would require stepping into the covered terrace area of House 219, and then to enter what was obviously a kitchen area of House 219.’

5.7  This case is quite different on the facts from the lane in the Lee Theatre which had heavy pedestrian traffic.

5.8  There are two matters that call for comment.  The first is whether the Judge had overlooked two letters dealing with the waiver granted by the Government to one of the former owners of RP 359 to use Area X1 as a kitchen when the Lease condition restricts it to agricultural or garden use.  The terms of the waiver are contained in a letter of 11 August 2003.  By another letter dated 8 October 2003, the Government stated :

‘ Recent inspection by officers of this office revealed that the unauthorised structures on the captioned premises had been removed and an extension at the garden area converted to an open-sided canopy with a covered area of 13.19m². In the circumstance, I am prepared to withhold the lease enforcement action mentioned in my previous letter to you dated 26.7.2002.

However, I must stress that, if the unauthorised building works recur or if the existing canopy is extended or enclosed on any of its sides by glass panes or other construction materials, lease enforcement action will be reactivated and you will be required to demolish all unauthorised structures completely.’

5.9  The Judge did not deal with these two letters.  At trial, the plaintiff referred to the 8 October 2003 letter and expressly informed the Judge that the purpose of relying on this letter is to show Area X1 was not built up in 2003 and also for the purpose of showing the size of that area.  This letter stated that there was only an open-sided glass canopy built in October 2003 and the issue is whether this contradicts the defendants’ case that a back glass panel was built since 1997.  But even assuming that the back glass panel was somehow not there in 2003, it does not mean that the Judge was plainly wrong in her finding.  The Judge was clearly entitled to accept that the back panel was installed in 1997 and that was the time when the defendants commenced their exclusive possession of Area X1.  There was no contrary evidence that in 2003 the defendants were no longer in exclusive possession of Area X1.  On the contrary the evidence shows that they used that area as their kitchen.  There is also no contrary evidence that in 2003 that other pedestrians can use Area X1 for access purposes. 

5.10  The other matter that calls for comment is the period in 2005 during the construction work in House 220 when Area X1 was cleared and became empty. The Judge held :

‘ 30. Yau Junior’s claim and evidence of the manner of use of Land X1 is supported by the photographs taken over the years, notably those taken in August 1997, 1999 and 2003. The photographs which show the lane cleared and empty, without glass panels, were taken at a time when renovation work was being undertaken by workers in 2005, and the panels were removed for such work.’

5.11  Mr Merrett’s evidence as contained in his second witness statement confirms the area was cleared of articles :

‘6. Before I moved into House 220, I did carry out various inspections in relation to House 220 and its surrounding environment. I reiterate that prior to the building of the alleged kitchen area aforesaid, the relevant area was an open passage way covered by a canopy, and one could walk over Land X through such passage way freely without interruption (save for some junk laid on the ground).’

5.12  The evidence of Yau Junior as contained in his first witness statement is that :

‘ 10. In or about 2005, the owner of House 220 had a water seepage problem with their wall. We had been asked by the owner to temporarily remove all the kitchen utensils. The owner hired labours to erect a partition wall for separation, and carried out some waterproof work to solve the water seepage problem. Meanwhile, we also hired workers to add a glass ceiling. We built an interior space by merging Land X and House 219 with a glass door and brick walls. I took some photographs for record during and after the renovation work. It can be seen in the photographs that Land X is part of House No. 219.’

5.13  Again the fact that the area was cleared for a short period of time does not mean that the defendants were no longer in exclusive possession of the area.  It was cleared so that Mr Merrett, as well as the defendants, could carry out construction work there.  The request by Mr Merrett was for the defendants to temporarily remove their belongings in that area.  This is hardly consistent with a paper title owner asserting his ownership to that area or taking steps to dispossess the defendants.  The defendants’ employment of the workers to build the kitchen shows that they were in continuous control and possession of that area.

5.14  The findings on exclusive possession of Area X1 by the defendants cannot be faulted.

3)  Illegality

5.15  The plaintiff argued that the defendants’ claim is not one that ‘the processes of law will allow’ because by illegally building the kitchen on Area X1 in 2003, Yau Junior jeopardised the fire safety of both House 219 and House 220 since it blocked the free access of Fire Services’ personnel and equipment and as long as Yau Junior’s illegal structures remain in place, all of 359 RP is liable to forfeiture, including Area X1.

5.16  Illegality is not relied upon as one of the grounds in the notice of appeal nor was illegality an issue below.  Illegality must be pleaded and it was not.  The only ground remotely touching on the matter is the plaintiff’s reliance on the letter dated 8 October 2003.  But as pointed out earlier, the plaintiff had expressly informed the Judge of its purposes in relying on this letter.  Illegality was not relied upon.  This point is not now opened to the defendants.

4)  Easement

1)  Standing of Lee

5.17  The plaintiff complained that the Judge had disregarded the plaintiff’s challenge to the standing of the defendants other than Lee to the claim for easement.

5.18  The Judge had, in fact, considered the issue of standing.  In her written judgment she had confined granting the declaration in favour of Lee only because she is the owner of SC 359.  She held :

‘ 48. Yau Junior’s evidence of continuous, uninterrupted use of Land A since 1982 was adduced on behalf of himself and members of his family, including Yau Senior and Lee. A declaration in favor of Lee, in relation to her right of way and easement over Land A for herself, her “agents and licensees” (as sought in the Counterclaim) would include the right of Yau Senior and Yau Junior to continue to pass over and use Land A as Lee’s licensees.’

5.19  But in the sealed order the declaration was granted in favour of all the defendants.  This is incorrect and does not reflect the intention of the Judge.  The parties accepted this view when this Court pointed this out at the beginning of the appeal.  Accordingly the sealed judgment was to be amended to confine the declaratory relief to be granted to Lee only.

5.20  There is a subsidiary point raised by the plaintiff that Lee herself did not give evidence.  Again the Judge had held that Yau Junior gave evidence on behalf of himself, Lee and Yau Senior and she accepted his evidence as to why Yau Senior and Lee have not been able to give evidence in this action : Lee is an octogenarian, Yau Senior is over 90 years of age, and both are in ailing health.

2)  Illegality

5.21  The plaintiff complained that the Judge seems to have been unconcerned that the defendants’ claim for easement would facilitate their continued trespass over Government land.

5.22  In my view, each case must be considered in its context.  Here the use of Area A as a footpath is not illegal by itself.  The declaration that the Judge granted is confined to a specific area, namely, Area A.  How the defendants reached this specific area is not a matter of concern for the purpose of granting the relief.  The important point is that there is nothing illegal when the defendants are going through Area A.  Further based on Loyal Luck Trading Ltd, even if, the trespass on government land is to be taken into account, it does not prevent the prescriptive acquisition of a private right of way.

3)  No acquiescence?

5.23  The plaintiff submitted that the Judge failed properly to consider the evidence of Mr Merrett that, in 2006 he had demolished Yau Junior’s boundary wall and gate and that this had resulted in open hostility (including death threats from Yau Junior) between the 359 RP owners and the Yau family.  From that time onwards, there was no acquiescence to the Yau family coming onto 359 RP.  Also Yau Junior’s intentions in building the wall and gate and in threatening the 359 RP owner after he demolished it negative any continuous acquiescence – which was fatal to the defendants’ easement claim.

5.24  There is again nothing in this ground.  The Judge clearly had accepted Mr Merrett’s evidence that the Yau family’s use of Area A had continued even after Mr Merrett demolished the low wall and small gate and he had never stopped them from using Area A as a means of access to and from House 219.

4)  Derogation from grant

5.25  The plaintiff complained that the Judge appears to have ignored the principle on derogation from grant.

5.26  The Judge had referred to this argument at [47] of her judgment :

‘ 47. Mr Chu also argued that as Yau Senior was the registered owner of RP 359 from 1976 to 1979, he should not be permitted to derogate from his grant constituted by the sale and assignment of RP 359.’

5.27  In my view although she did not expressly address this point, she had by [48] of her judgment, in effect, decided that this principle has no application since the declaration was only made in favour of Lee.  Yau Senior is using the path in his capacity as a licence of Lee and not in his own capacity as a grantor.  There are no merits in this ground.

5)  Scope of the right of way

5.28  The plaintiff complained that the undefined right of way that the Judge granted means that she has granted all the defendants and their licensees free-roaming rights over all of Area A (the plaintiff’s garden), without any restriction upon them trampling over the plaintiff’s flower gardens or otherwise, unnecessarily disturbing the plaintiff’s quiet enjoyment of their garden.

5.29  The defendants’ response is that this complaint has never been raised in the notice of appeal.  Further there is no evidence to suggest that the plaintiff’s property has been damaged or that the plaintiff’s quiet enjoyment has been disturbed.  No evidence of such is before the Court and this ground should not be allowed based on the Flywin principle.

5.30  I agree with the defendants’ submission.  But this point can be shortly dealt with.  At trial, the Judge had asked the parties to identify the path used by the defendants and a plan (Exhibit P1) was produced which showed the path.  The path used by the defendants in Area A is between the points identified there as G1 and G2.  This Court indicated at the beginning of the appeal that the declaration should be amended by specifying the right of way over Area A is along the path between G1 and G2 as identified in Exhibit P1. The parties agreed.  This is no longer a live issue.

VI.  Conclusion

6.  Accordingly, the appeal is dismissed with costs to the defendants to be taxed if not agreed.

Hon Chu JA :

7.  I agree with the judgment of Cheung JA and the orders proposed.

Hon Lisa Wong J :

8.  I agree.