ON YIP PROPERTY DEVELOPMENT CO LTD v. KWOK TAI KUEN ALAN

DCCJ 1154/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1154 OF 2010

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RULING

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INTRODUCTION

1. These are the respective leave applications of the plaintiff and the defendant for leave to appeal against the following orders:-

(i)  the plaintiff’s claims against the defendant for possession of the portion and damages for trespass be dismissed;

(ii)  a declaration that the defendant was and is in adverse possession of the portion and has the possessory title thereto;

(iii)  a declaration that the title of the plaintiff or its predecessor in title to the portion has been extinguished and that the plaintiff does not have any title thereto;

(iv)  the defendant’s counterclaim in respect of Site B (except the portion) and Site C be dismissed; and

(v)  there be an order nisi that there be no order as to costs. 

2. The plaintiff seeks leave to appeal against (i) to (iii) and (v) above and the defendant seeks leave to appeal against (iv) and (v).  Both parties have filed detailed written submissions supplemented by concise oral submissions in court, to all of which I am greatly indebted.

3. Shortly stated, the plaintiff was the owner of the paper title of a piece of land (“the Land”) in Mui Wo, Lantau comprising what were called Sites A, B, C & D at the trial.  The subject matters of the trial were Sites B and C only.  The plaintiff, by their action, sought possession of a small part of Site B (“the Portion”) on which the defendant’s squatter house was built and also damages for trespass.  On the other hand, the defendant counterclaimed for adverse possession of the whole of Site B and Site C, relying on the alleged aggregated period of adverse possession by his parents and himself commencing in 1950s. The facts and the evidence are those as stated in my judgment (“the Judgment”) handed down on 23 August 2013 which I am not going to repeat. 

THE TEST

4. The test for the granting of leave to appeal is well-known and not in dispute.  It is for the applicant to show that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard: see s63A(2) of the District Court Ordinance, Cap 336.  A “reasonable prospect of success” means that there is an arguable case such that the chance of success is more than “fanciful” but without having to be “probable”: see Wing Tat Haberdashery Company Limited v Elegance Development & Industrial Co Limited [2011] 5 HKC 474, 476B-C; and also Ma Bik Yung v Ko Chuen [2009] 3 HKC 359, 360H-I, 361A-C.

THE PLAINTIFF’S APPLICATION

5. It would be more convenient for me to deal first with the plaintiff’s application then the defendant’s application.

6. By a summons dated and filed on 18 September 2013, the plaintiff seeks leave to challenge my findings that the Portion had been adversely possessed by the defendant’s family since 1954/1956 and that the title of the plaintiff’s predecessor in title and hence that of the plaintiff would have been extinguished by as early as 1974 or 1976 at the latest.  The basis of the plaintiff’s contention is that there is no or no sufficient evidence to support the above findings.  There is no complaint of any error of law.

7. Mr Leung, counsel representing the plaintiff in this application but not at the trial, summarized the complaints in his oral submissions as follows:-

(i)  the lack of evidence to show the adverse possession by the defendant’s family commenced in 1954;

(ii)  the lack of evidence to show the animus possidendi on the part of the defendant’s parents; and

(iii)  the deficiency of the defence evidence.

CONSIDERATION OF PLAINTIFF’S APPLICATION

8. With great respect to Mr Leung, who skillfully advanced everything that could be said on behalf of the plaintiff, the court was fully alive to and took into account the evidential points he raised in the present application, including (i) the hearsay nature of the defence evidence regarding the defendant’s parents and their intention in particular (§15 & 22, Judgment); (ii) that the defendant and his siblings were of very young age at the material time (§23, Judgment); and (iii) the brevity and inadequacies of the defence evidence and in particular that of DW2, who is the defendant’s eldest brother (§§13 & 26, Judgment). Indeed, these concerns were among the considerations that caused the court to attach greater weight to the objective, independent and agreed evidence of the experts (§§21 & 25, Judgment). 

9. Besides, the court is unable to agree with the descriptions given by Mr Leung that the aerial photographs were “equivocal” and that there were only “limited farming patterns” in “other parts” of the Land.  As said at § 26 of the Judgment,

“From what can be seen in the aerial photographs taken between 1956 and 1963, the farming patterns and cultivation activities in both Site B and Site C were clear and extensive and they covered almost the whole of the two sites in question.”

In any event, assessment of evidence is a matter for the trial court.

10. Mr Leung also emphasized that the farming patterns only covered the “other parts” of the Land, not the Portion.  With respect, this point is not a good one.  As the Portion was used for the building of first the small huts and subsequently the squatter house, it could not be for farming.  The point, however, is that the extensive farming patterns which covered most of the Land is indicative of possession of the whole lot (which included the Portion) by the defendant’s family at the relevant time.

11. As regards animus possidendi, the court had taken into account the fact that the re-marriage of the defendant’s mother in and her moving out of the squatter house since 1963.  However, it does not follow that she had given up possession of the Portion there and then.  The farming activities in Sites B and C continued until sometime before 1973 and presumably it was the defendant’s mother who had farmed the lands.  Her sons (DW3 and the defendant) continued to live in the squatter house.  DW3 lived in the squatter house with the defendant up to 1973 and afterwards he would return to the squatter house on holidays.  The defendant continued to live in the squatter house until 1978 when he moved out to live with the mother.  Besides, even though the defendant was only a teenager during the time when he was living in the squatter house alone, it would be unrealistic to say that he did not have the intention to exclude outsiders from his residence. 

12. As regards the alleged deficiency of the defendant’s evidence, without delving into each and every minute evidential points raised by Mr Leung, all of which had already been canvassed in the Judgment, it has to be pointed out that the proper way is not to look at each and every piece of evidence in isolation, as Mr Leung seems to have done in his submissions.  In arriving at the findings as it did, the court should consider and in fact had considered all the relevant evidence as a whole before arriving at the relevant findings: see J A Pye (Oxford) Ltd v Graham.[1] Take the example of when the adverse possession had started, the court relied not only on the evidence of DW2 that he came with his grandmother to Hong Kong to reunite with his parents in 1954, but also the circumstantial evidence like the fact that he graduated from primary school in 1959, the agreed expert evidence on the presence of extensive farming patterns as late as 1956 and the aerial photos. 

13. Mr Leung suggested that there was inconsistency between the defendant’s and DW3’s evidence on the one hand and the aerial photographs on the other as to when the squatter house came into being.  Whilst it is true that the squatter house can be seen in the aerial photograph taken on 22 January 1962, it was not the defence evidence that the squatter house only came into being after the passing of Typhoon Wanda in August 1962.  The defence evidence was that after the damage of the ruined house by Wanda in 1962, their family converted the squatter house, which had previously been used as a store, into a residence and moved in there.  There was in fact no inconsistency between the defence evidence and the agreed expert evidence in this regard (See §14, Judgment). 

14. In relation to all of the plaintiff’s complaints, it has to be noted that assessment of evidence and fact finding are generally matters for the trial judge.  The Court of Appeal would be slow to interfere with the factual findings unless they are plainly wrong: Ting Kwok Keung v Tam Dick Yuen & Ors[2]. Furthermore, the Court has already given detailed explanations and reasons for its findings that the Portion had been in adverse possession for more than 20 years (§§28 & 29, Judgment). 

RULING ON PLAINTIFF’S APPLICATION

15. Having considered all the points raised by Mr Leung, both in his written and oral submissions, I am unable to say that the plaintiff’s proposed appeal has a reasonable prospect of success.  Also, I do not see any reason in the interests of justice that their appeal should be heard.  As a result, the plaintiff’s leave application is dismissed. 

THE DEFENDANT’S APPLICATION

16. The defendant’s summons for the present application was dated and filed on 17 September 2013. The complaints listed in the draft notice of appeal prepared by Mr Lam for the defendant, which cover both legal and evidential issues, can be briefly summarized as follows:-

(1)  the court erred in holding that the burden of proof on the issue of abandonment lied on the defendant;

(2)  the court erred in holding that the defendant and his family had abandoned possession of Site B in about 1973 or had not been in continuous possession thereof for more than 20 years;

(3)  the court similarly erred in holding that the defendant and his family had abandoned possession of Site C in about 1973 or had not been in continuous possession thereof for more than 20 years; and

(4)  the court erred in failing to consider whether the defendant had been in adverse possession of both Sites B and C for 12 years since 1996.

CONSIDERATION OF DEFENCE APPLICATION

As to Ground (1): Abandonment

17. I am unable to agree with Mr Lam that the court erred in holding that the burden of proof lied on the defendant on the issue of abandonment.  The reasons are as follows:-

(a)  It was the defence case that the defendant’s parents and the defendant had been in successive adverse possession of Sites B and C since 1950s.  Therefore, the main issue in this case was whether the defendant’s family had at any stage been in continuous physical possession of two sites for a period of 20 years or more since 1950s.  (§22, Judgment) 

(b)  Since it was the defendant who claimed adverse possession, there can be no dispute that it was up to the defendant to prove that his family had been in continuous possession of the two sites for 20 years or more since 1950s.  Mount Carmel Ltd v Peter Thurlow Ltd[3] stands for the proposition that the party who alleges that a version of events in his favour did occur bears the burden of establishing it.

(c)  Even though the word “abandonment” did not appear in the plaintiff’s pleadings, the defence was aware that the issue had always been a part of and in substance the same as the plaintiff’s case that the defendant’s family had not been in continuous adverse possession.  It had all along been the plaintiff’s case, as appeared in their written opening, that there were “breaks” in the defendant’s possession of Sites B and C such that there was no continuous possession for a period of 20 years. 

(d)  The principle firmly established by Powell v McFarlane[4] and followed by the Court of Final Appeal in Incorporated Owners of San Po Kong Mansion v Shine Empire[5] is that:-

“(1) In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prime facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner. (2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess (‘animus possidendi’).” (Emphasis added)

(e)  With the greatest respect to Mr Lam, in the present case it cannot be right to say that “continuous possession” and “abandonment” were “two separate and distinct issues with burdens of proof on different parties”.  In my judgment, the issues of “abandonment” and “continuous possession” were so inseparably intertwined that it follows logically that the squatter should bear the burden of proving that there had been an unbroken chain of possession, that is, the absence of any abandonment. 

Thus, as a matter of principle, logic and authorities, the burden is plainly on the squatter to show that he had been in adverse possession for the whole of the limitation period.

18. Mr Lam submitted that after the defendant’s parents taking possession of the Land in 1954, short of abandonment, the defendant’s family was “deemed in law to be in continuous possession”.  Mr Lam based his submission on one sentence (underscored below) taken out of the judgment of Lord Hope of Craighead in J A Pye (Oxford) Ltd v Graham:-[6]

“70 The general rule, which English law has derived from the Roman law, is that only one person can be in possession at any one time. Exclusivity is of the essence of possession. The same rule applies in cases where two or more persons are entitled to the enjoyment of property simultaneously. As between themselves they have separate rights, but as against everyone else they are in the position of a single owner. Once possession has begun, as in the case of the owner of land with a paper title who has entered into occupation of it, his possession is presumed to continue. But it can be transferred from one person to another, and it can also be lost when it is given up or discontinued. When that happens, possession can be acquired by someone else. The acquisition of possession requires both an intention to take or occupy the land (“animus”) and some act of the body (“corpus”) which gives effect to that intention. Occupation of the land alone is not enough, nor is an intention to occupy which is not put into effect by action. Both aspects must be examined, and each is bound up with the other. But acts of the mind can be, and sometimes can only be, demonstrated by acts of the body. In practice, the best evidence of intention is frequently found in the acts which have taken place.” (Underline added)

19. With respect, I am unable to accept the submission that once a squatter is shown to have taken possession of the subject land, he is “deemed in law to be in continuous possession”.  My reasons are as follows:-

(a)  According to Powell v McFarlane, it is the owner of the paper title who is deemed to be in possession of the subject matter in the absence of evidence to the contrary. Moreover, a clear distinction has to be made between the lawful owner and a trespasser.  Slade J said,[7]

“The question of animus possidendi is, in my judgment, one of crucial important in the present case. An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment, is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. 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 courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.” (Emphasis supplied)

(b)  In the leading judgment of Lord Brown-Wilkinson in J A Pye, to which Lord Hope and other law lords agreed,[8] Powell v McFarlane was cited with approval.[9] 

(c)  Reading in context, that sentence of Lord Hope underlined above is not referring to the position of a squatter or addressing the issue of burden of proof at all.  In that paragraph, Lord Hope was making a general exposition about the exclusivity of the concept of possession, the fact that possession may change by various means and the elements which constituted possession.  Lord Hope’s judgment is not intended to and does not in fact support Mr Lam’s submission.

(d)  If a trespasser who had taken possession “is deemed in law to be in continuous possession”, then the owner of the paper title would be obliged to prove the otherwise. That would in effect reverse the burden of proof which is contrary to the principle laid down in Powell v McFarlane above.

20. Mr Lam also submitted that, since the court found that the defendant’s family had been in possession of the Land for about 19 years since 1954, there was a strong “presumption” in the defendant’s favour that the possession had continued. Reference was again made to the one sentence taken out of Lord Hope’s judgment quoted above. 

21. With respect, I am unable to accept that there was such a “presumption”.  My reasons are as follows:-

(a)  I accept Mr Leung’s submission that in the sentence under consideration, Lord Hope was there referring to the position of the owner of the paper title rather than that of the squatter.  Reading in this light, Lord Hope was simply echoing what Slade J said in Powell’s case that:-

“In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prime facie right to possession.”[10]

Lord Hope was not saying that there should be any presumption in favour of a squatter.

(b)  If one accepts in principle that the burden should be on the squatter to show that he had been in possession of the subject land for the whole of the limitation period, then there should not be any “presumption” in favour of the squatter no matter how long he had been in possession prior to the completion of the limitation period.  It is difficult to see any justifications, whether as a matter of policy or authority, to confer on a squatter (who is basically a trespasser) the benefit of a presumption to the detriment of the legal owner.

(c)  Mr Lam’s proposition of a “presumption” in favour of the squatter would unnecessarily complicate the law which has been relatively clear and straight forward, namely that it is for the squatter to prove that he has factual possession of the subject land coupled with the intention to exclude the others from it for the entire limitation period. 

22. With respect, I am unable to see any merits in this ground.

As to Ground (2): factual findings re Site B

23. In relation to Mr Lam’s challenge to the finding in respect of Site B that since 1973 there had been a long period of voluntary abandonment of the use and control of the land by the defendant and his mother, the finding was based on a consideration all the relevant evidence, including (i) the cessation of farming activities sometime before 1973 (§§34-37, Judgment); (ii) the emergence of the footpaths between 1973 and 1982 which showed that the defendant did not have exclusive possession (§§39-42, Judgment); and (iii) the defence evidence about the defendant’s family planting and tending trees (§44-46, Judgment).  The first two factors were in favour of the plaintiff.  The third one did not assist the defendant because of its various unsatisfactory aspects as discussed in the Judgment.

24. As regards the cessation of farming activities, it was based on the agreed evidence of the experts which was supported by the defendant’s own evidence about the changes occurred in his family. 

25. As regards the emergence of the footpaths, the Court of Appeal’s decision in Lee Theatre Realty Limited and Tong Wah Jor[11] was considered and applied.  It should be noted that the network of footpaths ran from east to west and also from north to south across Site B.[12]  Once the defendant’s evidence was rejected that the footpaths were the result of the usage by and the work of the defendant and his family, then the reasonable interference, which the court was entitled to draw as it did, was that the footpaths were caused by the usage of villagers.  As said in the Judgment, the presence of the footpaths was relevant to the exclusivity of the possession and animus possidendi of the defendant and/or his mother. 

26. As regards planting and tending of trees, as noted by the Court, its relevancy and weight depends on the particular circumstances of each case.  The case of Chow Tin Sang also known as Chau Tin Sang as manager of Chau Fuk Tso v Citihero International Limited[13] was considered and applied.  (§45, Judgment)  After consideration of the evidence, the court came to the following conclusion:-

“I accept that the defendant and his mother might have on occasions after 1973 picked some fruits from the trees which had been in existence on the sites. However, in view of the unsatisfactory state of the evidence as aforesaid, and given that the defendant’s mother had not been in good health since 1973, I am not satisfied that the defendant and/or his mother had carried out any systematic and regular planting or tending of fruit trees in or after 1973 which may be evidence of their physical possession of the land. Furthermore, in my assessment the acts, if any, of the defendant and his mother in relation to the trees are open to more than one interpretation and they had not made it perfectly plain to the world at large by their actions or words, if any, that they had intended to exclude the others as best they could. I find that there is not sufficient evidence that they had the requisite animus possidendi.” (§47, Judgment) (Emphasis supplied)

27. It is plain that the Court had not, as Mr Lam seems to suggest, treated the evidence of planting and tending of trees as evidence of “a new claim of possession”.  The Court was saying, against the backdrop that farming activities had ceased in both Sites B and C and against the unsatisfactory evidence of the defendant about the alleged tree planting and tending, that the occasional picking of fruits from the trees by the defendant and his mother was not of a sufficient nature, extent and regularity as to show physical possession of the land or to evince an unambiguous intention to exclude others. 

28. Thus, the present case is factually different from Williams & Anor v Usherwood & Anor[14] on which Mr Lam relied.  In that case, in 1974 the defendants paved an area of land with decoration crazy-paving stones, at some expense, which went beyond any normal maintenance requirements, replacing the tarmacadam surface.  Counsel for the plaintiffs submitted that that activity was at most an equivocal act, as the defendants had the right to repair the surface of the subject land over which there was a right of way.  In rejecting that argument, the English Court of Appeal held that the work was evidence of the defendants’ adverse possession since 1962 and was not to be regarded as evidence of a new claim of possession made when the work was done.  It should be noted that apart from the evidence about the defendants’ expending money on paving the subject land, there was also other evidence of adverse possession including the enclosure of the land by a fence and the parking of the defendants’ cars there.  In the circumstances, the English Court of Appeal held that there was evidence on which the trial judge could find that the defendants had proved adverse possession.[15] 

29. As aforesaid, assessment of evidence is a matter for the trial court.  As regards the present case, the finding of the Court was that the defendant’s mother and his activities in relation to the trees in and after 1973 were open to more than one interpretation and was not sufficient proof of either physical possession or animus possidendi.  This is a finding which that the Court, as the tribunal of fact, was entitled to draw. 

30. As regards whether the defendant’s possession of the Portion, the court had also considered its implications on the defendant’s claim regarding Site B (§62-63, Judgment):-

(a)  It was not the Court’s finding that the defendant’s possession of the Portion was not evidence of his possession of Site B.  As noted by the court, “The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances … acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole and whether or not acts of possession done on parts of an area established title to the whole are must, however, be a matter of degree.”  (§7, Judgment) 

(b)  The court’s finding that was “the defendant’s possession of the Portion did not mean that he was in possession of the whole of Site B”.  Reasons were given for the finding.  It is pertinent to note that the Portion occupied about 3.56% of the whole of Site B and was situation at its south-eastern end.  The Portion was adjacent to the public footpath on the east side of the Site B.  There was no evidence before the court that the defendant had to pass through parts of Sites B and C in order to gain access to the Portion.  In any event, even assuming that it was the case, that in itself did not give him any right or interest over the small part of land that he had to pass through.

31. The Court had also considered events subsequent to 1973.  It was found that after a short period between 1982 and 1984 during which farming activities resumed in Site B, there was yet another lengthy period of voluntary abandonment of the use and control of the land by the defendant at least after 1986.  It was only in 1998 that farming pattern was once again observed.  (§§53-54, Judgment)  As regards the activities of the defendant and his wife, based on the evidence the court said that:-

“52. Whilst I accept that the defendant and his wife might have done some gardening and picking of fruits as leisure activities, I am not satisfied that the defendant has proved that what they did constitutes a sufficient exclusive control and possession of the land and/or evidences an intention to exclude others. … I agreed with the submission of Mr Shum that with the evidence of the defendant that very little time and efforts were required to take care of the trees once they were grown and the fact that no one was living on Site B at the time, the presence of fruit trees on the land is not sufficient to establish the two elements of adverse possession.”

In short, evening assuming that there were intermittent periods of possession by the defendant after 1973, they were not sufficient in the present case to support the defendant’s claim of adverse possession.  This, again, is a finding that the Court was entitled to make.  Cadija Umma V S Don Manis Appu[16] relied upon by Mr Lam is factually distinguishable and does not assist the defendant. 

As to Ground (3): factual findings re Site C

32. In respect of Site C, the situation was similar to that of Site B, only that the defendant’s case was even weaker in that farming activities had not resumed after 1973. 

As to Ground (4): adverse possession after 1996

33. It has to be pointed out that the defendant had never pleaded an alternative case relying on the defendant’s own possession of the subject lands in 1990s:-

(a)  In the defendant’s Defence and Counterclaim dated and filed on 9 August 2010, the defendant’s case for the counterclaim was that:-

“9. The Defendant and his family members have been in adverse possession of Sites B and C of the Land at all material times since about early 1950s.

…

10. In the circumstances, pursuant to section 8(1) of the Limitation Ordinance (Cap 347) (“the Ordinance”), the Plaintiff predecessor in title’s right to recover Sites B and C of the Land accrued at the time when the Defendant’s parents first entered into possession thereof in about early 1950s.

11. Pursuant to sections 7(2) and 38A(1)(a) of the Ordinance, the Plaintiff predecessor in title’s right to recover Sites B and C of the Land expired 20 years after early 1950s i.e. early 1970s.

12. As a result, pursuant to section 17 of the Ordinance, the title of the Plaintiff’s predecessor in title to Sites B and C of the Land was and should have been extinguished by the time the Plaintiff acquired the Land from it on 24 November 1978. Alternatively, even assuming that the Plaintiff’s predecessor in title’s title to Sites B and C of the Land had not yet been extinguished by 24 November 1978, the Plaintiff’s title thereto was and must have been extinguished before the commencement of these proceedings by writ on 31 March 2010.”[17]

  It should be noted that although the word “alternatively” appears in paragraph 12, it was not to advance a different and alternative case, but to cater for the perceived uncertainty as to when the adverse possession commenced.  That can be seen from the following paragraph in the defendant’s opening submission:-

“3.9 The Defendant cannot tell precisely when adverse possession began. However, this is immaterial. As Cheung JA observed in Yu Siu Cheuk v Realray Investments Ltd, CACV 181/2009 (10/11/2009), §17:-

“For the purpose of deciding whether the defendant’s title has been defeated by limitation the Court does not need to decide the precise point of time when the plaintiff entered the property so long as it is satisfied that the plaintiff has proved that he has been therefore twenty years with the necessary intention to possess. This is what the Court which is seized of the matter should decide.””

The true effect of this passage in Yu Siu Cheuk’s case will be considered in due course.

(b) The matter was further put beyond any doubt by the Agreed Statement of Issues signed by the respectively legal representatives of the parties, which was recited in the Judgment (§4). The parties put the relevant issues as follows:-

“(2) Whether the defendant has been in adverse possession (ie factual possession coupled with the requisite intention to possess (animus possidendi)) of Site B of the Land (as defined in the Defence and Counterclaim) or any parts(s) thereof for a period of not less than 20 years before the issuance of the writ herein?

(3)  Whether the defendant has been in adverse possession (ie factual possession coupled with the requisite intention to possess (animus possidendi)) of Site C of the Land (as defined in the Defence and Counterclaim) or any parts(s) thereof for a period of not less than 20 years before the issuance of the writ herein?”

(c)  As a result, the parties had conducted the trial on the basis that the applicable limitation period was one of 20 years.  Mr Erik Shum, counsel for the plaintiff at the trial, opened the plaintiff’s case in the following terms:-

“6. As to the applicable limitation period it is agreed that since the Defendant alleges adverse possession since 1950’s, i.e., before the cut off date of 1^st July 1991 under section 38A(1) of the Limitation Ordinance, the old law of 20 years limitation period applies. …” (Original emphasis)

  Mr Lam opened the defence case as follows:-

“3.5 The relevant limitation period in this case is 20 years … According to the defendant’s case, the registered owner’s legal title to Sites B and C was distinguished by the early 1970s.”

  Then, in his written closing submission, Mr Lam said:-

“4.30 The relevant limitation period in this case is 20 years …”

“5.35 As submitted above, the Defendant’s case is that the limitation period should start to run since 1954 (so that the limitation period would expire by 1974); or alternatively, 1/4/1955 (so that the limitation period would expire by 1/4/1975); or, alternatively, by the latest, 27/12/1956 (so that the limitation period would expire by 27/12/1976).”

34. The first time in the whole trial when Mr Lam hinted the possible application of the 12 year limitation under “the new law” was towards the end of his written closing submission:-

“5.57 For the sake of argument, even assuming that there was any break in possession or insufficient evidence of possession at all, the said evidence shows that, by the latest, in early 1990s, the Defendant was in possession of both sites by various acts the details of which will not be repeated (including for example cultivation activities in Site B in 1996). By then, the limitation period has been shortened from 20 years to 12 years. In such scenario, in any view, the limitation period must have expired by 31/3/2010 when the Plaintiff commenced the present action.”

35. That was a completely new case, as the defendant’s position had always been that his family was in “continuous possession” of the subject law ever since 1950s. Understandably, Mr Shum was taken aback by this new position of the defendant. In his written closing submissions, Mr Shum responded by saying:-

“11. Further, the Defendant in its Opening Submission stated that pursuant to sections 7(2) and 38A(1)(a) of the Ordinance, the relevant limitation period applicable in the present case is 20 years. No alternative case is put forward by the Defendant to reply on the new 12 years limitation period. The same point is re-iterated in paragraph 4.30 of the Defendant’s Closing Submission. Therefore, the Court is only concerned to resolve one single case of the Defendant, i.e. adverse possession commencing before 1991 (when the Limitation Amendment Ordinance came into effect), and since 1950’s.

  …

  13.  For the avoidance of any doubt, the Court is reminded that there is no claim of adverse possession of 12 years by the Defendant pursuant to Section 38A(1) of the Ordinance whatsoever.  Therefore, any act done on the Sites by the Defendant after 1991 is not directly relevant and could not be relied on as part of the Defendant’s case of adverse possession.”

36. In the circumstances, it is simply not open to the defendant now to pursue a new case, which had never but should have been pleaded, that he could rely on his own possession so as to benefit from the shorter limitation period of 12 years. Had the plaintiff been informed of this new case before or during the trial, the way Mr Shum cross-examined the defence witnesses might have been different.  It was more than probable, given the level of experience of Mr Shum, that he would have cross-examined the defendant in far greater details in relation to the activities on Sites B and C after 1996.  It would now be unfair to the plaintiff to allow the defendant to reply on the new case on appeal: see Flywin Co Ltd v Strong & Associate Ltd.[18]

37. Furthermore, although the defendant had adduced evidence of his possession of the subject lands after 1996, that was done in the context of his pleaded case that his family’s possession of the lands had been continuous since 1950s.  It would therefore not be permissible for the defendant to raise unpleaded issues out of the evidence adduced: Kwok Chin Wing v 21 Holdings Ltd.[19]

38. The case of Yiu Siu Cheuk v Realray Investments Limited[20] is factually distinguishable and does not assist the defendant:-

(a)  In that case, the plaintiff’s case was that he was in adverse possession of the subject land since 1979.  The learned recorder disbelieved the plaintiff as to when the adverse possession had commenced and dismissed his claim altogether.  There was no finding as to when the adverse possession had commenced and for how long it had persisted.  In allowing the appeal and ordering a re-trial, the Court of Appeal said that even if the plaintiff could not establish that he first entered in 1979, the court still had to address the issue of the 20 years’ adverse possession.  Whilst it was true that the plaintiff had not put forward some other specific alternative date or dates when he entered into possession of the property, it did not mean that the court could ignore the plaintiff’s case that he had been in continuous possession since 1979 which encompassed the 20 years’ adverse possession issue. 

(b)  In the present case, the defendant’s new case was based on a wholly different factual situation (that there was a break of continuity between his parents’ possession and his) which was not covered by his pleadings and also a different applicable limitation period. 

It is also pertinent to note, as Mr Leung pointed out, that Mr Shum was counsel representing the plaintiff on appeal in Yu Siu Cheuk’s case.  Therefore, Mr Shum would be conversant with the relevant principles involved in the decision of the Court of Appeal.

39. Furthermore, the court had not overlooked that the applicable time limitation under “the new law” is only 12 years:-

(a)  The defendant’s statement was that 1996, he used a piece of land behind the squatter house to teach his sons (aged 7 and 5) how to plant vegetables.  He also tended the fruit trees.  In 1998, he used the piece of land behind the squatter house to plant vegetables for self-consumption and he continued to tend the fruit trees.[21]

(b)  The defendant’s evidence had to view against the following evidence of the plaintiff’s witness and the agreed expert evidence:-

“11. It is apparent from their evidence that the plaintiff did not know until 2005 at the earliest that the Land had been occupied by others. The combined effect of their evidence is that in 2005 when PW1 visited the Land neither Site B nor Site C was enclosed, although the rear (north) side of the Squatter House, which was a single storey structure erected next to a footpath between the two sites, was fenced up by some rough fence. At the time, the Squatter House showed no sign of being inhabited. There was no real obstacle or difficulties for anyone to enter Site B and Site C or to walk through the whole open land which was barren with the presence only of the Squatter House and scattered fruit trees which did not seem to have been taken care of. When PW2 first visited the Land in 2007, the fruit trees still appeared to have been abandoned. The Squatter House, however, showed signs of recent renovation or reconstruction. It was in 2009 when PW2 visited the Land again that the trees appeared to have been trimmed. Before that, in February 2008 PW3 caused a notice to be posted at the Squatter House saying that it was private property. A few days later, PW3 received a phone call from a Mr Chow (DW4) who made inquiries with him. None of PW1, PW2 and PW3 had been stopped by anyone during their visits to the Land and they had not met anyone either.” (§11, Judgment)

“54. … the experts agreed that in 1998, farming pattern was observed at the northwest of the Squatter House and also some small trees were observed at the western portion of Site B. The situation continued and the small trees grew taller until 2006 when the farming lands there seemed to have been less attended. The experts said that in 2010, Site B was fully covered by tall trees and the cultivation activities could no longer be observed.” (§54, Judgment)

(c)  When the court said that “even assuming that the defendant had re-possessed the land from 1996 onwards, it would not have given him a sufficient length of occupation for the purpose of adverse possession”, that remark was only made “for the sake of completeness”.  As aforesaid, it had never been the defendant’s pleaded case that the adverse possession began in 1990s. 

(d)  Moreover, the court was saying that was that, even assuming that the plaintiff had re-possessed the land from 1996 onwards, it was not satisfied that the defendant had been in continuous possession from 1996 onwards for a sufficient period of time.  Based on the evidence of the plaintiff’s witnesses, there had been breaks in the defendant’s possession, such evidence was supported by the agreed expert evidence that there had been no farming activities after 2006. 

RULING ON DEFENDANT’S APPLICATION

40. Having considered all the points ably raised by Mr Lam, both in his written and oral submissions, I am unable to say that the defendant’s proposed appeal has a reasonable prospect of success.  Also, I do not see any reason in the interests of justice that his appeal should be heard.  As a result, the defendant’s leave application is also dismissed. 

COSTS

41. As both the plaintiff’s and the defendant’s application for leave to appeal are dismissed, I make an order nisi that there be no order as to costs.