CHONG YUK POR v. CHAN KAM MUK

DCCJ 3826/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3826 OF 2007

-----------------------------

BETWEEN

-----------------------------

-----------------------------

Judgment

-----------------------------

BACKGROUND

1.  These proceedings arise from the occupation by the plaintiff and his family members of all that piece or parcel of ground registered in the land registry as Lot no 5 in Demarcation District no 1, no 23 Pak Kok San Tsuen, Lamma Island (“the Land”).  The defendant is the current registered owner of the Land.

2.  On 28 August 2007, the plaintiff commenced these proceedings claiming against the defendant for adverse possession and seeking inter alia declarations that the plaintiff has acquired a possessory title to the Land and that the defendant’s title has been extinguished.

3.  In short, the plaintiff’s case is that since around 1958 and for more than 20 years, his parents and subsequently himself have been in continuous, uninterrupted and exclusive possession of the Land and that the title of the defendant and/or his predecessors-in-title to the Land have thus been extinguished.

4.  The plaintiff claims that since around 1958, the plaintiff’s parents went into possession of the Land and built a wooden hut upon it as their residence.  The plaintiff contends that his parents took possession of the Land without payment nor consent from anyone.  The plaintiff’s parents continued to reside at the Land until around 1970 when they moved to reside at Pokfulam Village and the plaintiff’s parents licensed the Land to a Chau family.  The plaintiff’s father, Chong Cheong（莊昌）also known as Chong Tong Hing（莊通興）passed away intestate in 1975.  In around 1976, the plaintiff’s mother, Choy Choi Chun（蔡賽春）was diagnosed with cancer and had to retire.  According to the plaintiff, his mother then terminated the license granted to the Chau family and returned to reside at the Land in or around 1977.  Before the plaintiff’s mother returned to the Land, in around 1977, the original wooden hut was demolished and a new wooden hut erected.  The plaintiff came to Hong Kong from Mainland China as an illegal immigrant in around October 1979.  After hiding in his sister’s place in the Western District, Hong Kong for about a month, the plaintiff obtained a Hong Kong Identity Card in November 1979 and had since late November 1979, been residing at the Land continuously with his mother and his youngest sister, Chong Pak Lan.  The plaintiff claims that after his mother’s death in 1989, he had continued to reside at the Land till this date.

5.  On his pleadings, the defendant does not appear to dispute that the plaintiff’s parents and subsequently the plaintiff have been in continuous possession of the Land at least since around 1970.  What is in dispute is the nature of that possession.  In short, the defendant says that at all times, the plaintiff and his parents have only be occupying the Land as tenants.  The defendant claims that his mother, Ng Ying Tai（吳英梯）and the wife of Chan Yi Hing（陳義興）(who was the defendant’s grandfather and predecessor-in-title to the Land) had on behalf of Chan Yi Hing orally leased the Land to Chong Cheong and/or Choy Choi Chun (ie the plaintiff’s parents) from about 1970 to 1980 for the annual rent of HK$20.  The defendant alleges that in or about 1980, after the death of Chong Cheong and/or Choy Choi Chun, the plaintiff became the tenant of the Land and continued to pay annual rent of HK$20 until 1999 when the annual rent was increased to HK$200 pursuant to a written tenancy agreement which I shall elaborate below.

6.  In 1999, the plaintiff signed a written Tenancy Agreement dated 15 October 1999 with the defendant’s son, Chan Chun Man (who was also one of the defendant’s witnesses in these proceedings, DW3) for the lease of the Land at the annual rent of HK$200 for a fixed term of 5 years from 15 October 1999 to 14 October 2004 (“the Tenancy Agreement”).  It is pertinent to note that DW3 had signed the Tenancy Agreement as landlord of the Land and that the Tenancy Agreement is in Chinese and appears to be in standard form (one that is readily available on the shelves in stationary shops) setting out fairly comprehensively the terms of the lease.

7.  The defendant’s case is that the Tenancy Agreement was simply a continuation of the lease of the Land by the plaintiff albeit now recorded in writing.  The plaintiff denies this and claims that the Tenancy Agreement was of no effect.  The plaintiff claims that he had entered into the Tenancy Agreement under duress.  He also pleads non est factum on the ground that he is illiterate and was misled by DW3 into believing that the Tenancy Agreement related to the lease of a farmland (“Farmland”) which the plaintiff claims to be distinct from the Land (I shall explain this in paragraphs 9 to 12 below).  Further, the plaintiff claims that the Tenancy Agreement was executed after the title of the defendant and/or his predecessors-in-title to the Land had extinguished.  Mr Patrick Szeto, counsel for the plaintiff submits that once the registered title is extinguished, the same cannot be revived and the acts done by the plaintiff thereafter are irrelevant. The plaintiff also attacks the validity of the Tenancy Agreement on the ground that it was only entered into with DW3 in his personal capacity as opposed to as agent for and on behalf of the defendant.

8.  Mr Szeto submits that the plaintiff’s plea of duress and non est factum is not so much to seek to set aside the Tenancy Agreement (given that (and on the assumption that the Tenancy Agreement is valid) it had already expired by effluxion of time by October 2004) but to displace any allegation of submissive intention and/or acknowledgement by the plaintiff to the defendant’s title to the Land.

9.  Insofar as the defendant’s allegation that since around 1970, the plaintiff’s parents and subsequently the plaintiff have been paying annual rent (see paragraphs 5 and 6 above), the plaintiff’s position is that at no time was rent paid for the Land.  However, prior to 1999, he and his parents had been paying annual rent of HK$60 to a Tam Chau（譚就）for the lease of the Farmland which is and according to the plaintiff, adjacent to the Land for farming purposes and that subsequent to October 1999, the plaintiff had paid annual rent of HK$200 for the Farmland to DW3 which the plaintiff had understood to be the effect of the Tenancy Agreement.

10.  The plaintiff claims that the Farmland does not form part of Lot no 5 ie the Land and that the Farmland is “next to and below” the Land.  I have considered the various photographs of the Land and its vicinity adduced by the plaintiff as evidence (which the defendant does not appear to have challenged) and the parties’ single joint expert survey report of Leung Shou Chun dated 12 October 2011 (“Joint Expert Report”) and I make the following observations:

(1)  during the course of giving evidence, the plaintiff identified from his photographs, the Farmland being located outside the house built upon the Land;

(2)  although the Report does not make specific reference to the Farmland, the aerial photos appended to the Report show that:-

(a)  aerial photo no 8754 dated 13 February 1963: a structure (“S1”) had been erected on the Land with its footprint more or less along the boundaries of the Land;

(b)  aerial photo no 22174 dated 5 July 1978: S1 had been removed with a new structure (“S2”) replaced.  S2 is also built on the Land with its footprint more or less along the boundaries of the Land;

(c)  aerial photo no CN7834 dated 9 July 1994: the North-Western side of S2 was extended beyond the boundaries of the Land.  Otherwise, S2 remained in place;

(d)  aerial photo no CW40100 dated 7 May 2002: S2 remained in place.  A new structure (“S3”) was erected adjacent and on the North-Eastern side of S2 and outside the boundaries of the Land; and

(e)  aerial photo no RW05377 dated 5 March 2005: S2 remained in place.  A new structure (“S4”) was erected adjacent and on the North-Western side of S2 and outside the boundaries of the Land.

11.  It is evident from the Joint Expert Report that a house had been erected on the Land as early as since 1963.  According to the Joint Expert Report, Mr Leung only studied the aerial photos of the Land and its vicinity taken after 1963 (and up to 2007) as the aerial photos before that date were taken too high in altitude and were thus not clear on the location of Lot no 5 ie the Land.

12.  From my observations in paragraphs 10 and 11 above, I am satisfied that the Farmland exists and that it is not within Lot no 5 ie the Land but adjacent to it.

LEGAL PRINCIPLES

13.  Pursuant to Sections 7(2) and 38A(1) of the Limitation Ordinance Cap 347, no action shall be brought by any person to recover land after the expiration of 20 years from the date on which the right of action accrued to him or if it first accrued to some person through whom he claims, to that person.  In this case, a limitation period of 20 years is applicable as the right of action accrued before 1 July 1991.

14.  Sections 8 and 13 of the Limitation Ordinance explain when the right of action to recover land shall or shall not be deemed to accrue:-

(1)  by section 8(1):-

“Where the person bringing an action to recover land, or some person through whom he claims, has been in possession thereof, and has while entitled thereto been dispossessed or discontinued his possession, the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.”

(emphasis added)

(2)     by section 13(1):-

“No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) and where under the foregoing provisions of this Ordinance any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date, the right of action shall not be deemed to accrue unless and until adverse possession is taken of the land.”

(emphasis added)

15.  The principles for the application of the above provisions in the Limitation Ordinance are well established and have been conveniently set out by the Court of Final Appeal in Wong Tak Yue v Kung Kwok Wai and Another (No 2) (1997-98) 1 HKCFAR 55 - a person claiming to be in adverse possession must be shown to have both factual possession and the requisite intention to possess ie animus possidendi.

16.  In J A Pye (Oxford) Ltd and another v Graham and another [2003] 1 AC 419, the House of Lords (citing Powell v McFarlane (1977) 38 P & CR 452) held that factual possession requires an appropriate degree of physical control and that it must be a single and exclusive possession:-

“In Powell’s case Slade J said, at pp 470-471:

‘(3) Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed… Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.’

I agree with this statement of the law which is all that is necessary in the present case.”

(emphasis added)

17.  In Wong Tak Yue (at 68), again citing Powell, held that the intention to possess:-

“…involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the process of the law will allow.”

18.  Further, Li CJ (as he then was) said (at 69):-

“The question of intention to possess, as with any other question of intention, is one of fact. Whether it can be established depends on an assessment of all the circumstances in a particular case.

Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism.  The courts would scrutinise the circumstances in which they were made and would give them such weight if any as they may deserve.  Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.”

19.  In respect of the last sentence of Li CJ’s judgment quoted above, Mr Szeto submits that the Tenancy Agreement does not assist the defendant as once the registered title is extinguished, the same cannot be revived.  As I understand, Mr Szeto puts the plaintiff’s case that the plaintiff had through himself and his family members, been in adverse possession of the Land since around 1958.  Accordingly, the title of the defendant and/or his predecessors-in-title would have extinguished by around 1978.  Alternatively, Mr Szeto submits that on the defendant’s case that the plaintiff through himself and his parents have been in possession of the Land since around 1970 (see paragraph 5 above), the title of the defendant and/or his predecessors-in-title to the Land would have extinguished by around 1990.  On either case, the Tenancy Agreement was entered into (in 1999) well after the title of the defendant and/or his predecessors-in-title have extinguished.  In support of his proposition, Mr Szeto relies on Cheung Yat Fuk v Tang Tak Hong and Others [2004] 2 HKLRD 86 and HSBC Private Trust (Hong Kong) Ltd v Au Yeung Chung (for herself and the estate of Lau Hak, deceased) CACV 69/2008 (unreported, 26 February 2009).  I accept Mr Szeto’s submissions on the law.  It has been well established since the English Court of Appeal’s decision in Sanders v Sanders (1881) 19 ChD 373 that once an owner’s title is extinguished, a subsequent acknowledgment cannot revive it.  In that case, Jessel MR said that:-

“…when a title has been extinguished by the statue, no mere acknowledgement by the person who has acquired under the statue as good a title as if a conveyance had been made to him can restore the old title.”

20.  Similarly, paragraph [230.852] of volume 16 of Halsbury Laws of Hong Kong (2010 reissue) provides that “an acknowledgment of title made after the expiry of the limitation period will not suffice to revive the owner’s title.”

21.  The significance of the acknowledgement is that pursuant to section 23 of the Limitation Ordinance, where there has accrued any right of action to recover land, and the person in possession of the land acknowledges the title of the person to whom the right of action has accrued, the right of action shall be deemed to have accrued on and not before the date of that acknowledgement.  In other words, where there is an acknowledgment of title by a squatter, the owner’s right of action accrues afresh from the date of the acknowledgement.  Section 24 provides that such acknowledgment has to be made in writing and signed by the person making the acknowledgment.  Section 24 also provides that the acknowledgment shall be made to the person, or to an agent of the person, whose title is being acknowledged.

THE ISSUES

22.  Having considered the parties’ pleadings, I see the main issues to be as follows:-

(1)  whether the plaintiff and his family members have factually been in continuous and exclusive possession of the Land since around 1958;

(2)  whether the plaintiff and his family members have the requisite intention to possess the Land; and

(3)  what is the effect of the Tenancy Agreement (if any) on  the plaintiff’s claim for adverse possession.

ANAYLSIS OF THE EVIDENCE

23.  During the trial, the plaintiff gave evidence.  He also called his younger sister, Chong Mei Bik (“PW2”) to give evidence.  Apart from himself, the defendant called Chow Hing Fuk (translated verbatim)（周慶福）(“DW2”), brother-in-law of the defendant and chief representative of Pak Kok San Tsuen, Lamma Island, and DW3 to give evidence.

24.  For the reasons I shall explain below, I accept the evidence of the plaintiff and his witness.  Where the evidence of the defendant and his witnesses conflicts with that of the plaintiff and his witness, I prefer the latter evidence.

Evidence of plaintiff & PW2

25.  The plaintiff was born in Guangdong, Mainland China.  He is now 63 years old.  At the time when he entered into the Tenancy Agreement, he would have been around 50.  The plaintiff claims that he did not receive any formal education and can be considered illiterate.  The plaintiff is a farmer and a casual labour.

26.  As mentioned in paragraph 4 above, according to the plaintiff, he has been residing at the Land continuously since late November 1979.  The plaintiff said that when he first resided at the Land, there was a wooden hut built upon it and his mother (who was a farmer) had been using the land outside the wooden hut as a small farm growing various vegetables and raising chickens for self use.

27.  The plaintiff claims that he was told by his mother that since around 1958, his parents have been in possession of the Land by building a wooden hut upon it and residing there without payment of rent and/or permission from anyone.  He was also told by his mother that between around 1970 and 1977, his parents had moved to reside at Pokfulam Village and that the Land had been licensed to the Chau family.  The plaintiff’s mother went back into occupation of the Land in 1977.  According to the plaintiff, in 1977, the original wooden hut was demolished and replaced with a new one and that since 1979 when he began to reside at the Land, he had over the years refurbished/renovated the wooden hut.

28.  The plaintiff has not been able to adduce any primary evidence to support his claim that his parents have been in possession of the Land since around 1958.

29.  It is unfortunate that the aerial photos appended to the Joint Expert Report only go as far back as 1963.  The plaintiff’s case nevertheless appears to be supported by the available aerial photos.  As observed in paragraph 10 above, the aerial photos show that:-

(1)  at least since 1963, there had been a structure erected on the Land ie S1.  According to the Joint Expert Report, S1 appears to be a 2-storey structure with a flat roof;

(2)  by 1978, S1 had been removed and replaced by S2.  According to the Joint Expert Report, S2 is a pitched structure.  S2 appears to have remained throughout on the available aerial photos which are up to 2007;

(3)  by 1994, the North-Western side of S2 had been extended;

(4)  by 2002, S3 had been erected adjacent to the North-Eastern side of S2; and

(5)  by 2005, S4 had been erected adjacent to the North-Western side of S2.

30.  Further, aerial photo no A46605 dated 16 September 1997 appended to the Joint Expert Report shows that the roof of S2 had been repaired as two different hues could be observed.

31.  In addition, PW2 said in her witness statement filed on 5 January 2011 that before her mother returned to the Land in or around 1976, she and her husband had assisted her mother to engage workers to demolish the original wooden hut and build a new one.

32.  In my judgment, the observations in the Joint Expert Report support the plaintiff’s chronology of events on the wooden hut built upon the Land in particular, that the original wooden hut had been demolished in 1976/1977 and replaced with a new one and that subsequent refurbishment/renovation work had been carried out to the hut.

33.  Although the defendant’s pleaded case is that Ng Ying Tai and the wife of Chan Yi Hing had let the Land to the plaintiff’s parents since around 1970, in the defendant’s witness statement filed on 3 January 2011 and in his oral evidence, the defendant said that Ng Ying Tai had in fact let the Land to the plaintiff’s parents as early as since the 1960s.  In my judgment, it makes little difference whether the plaintiff’s parents were in possession of the Land since around 1958 (on the plaintiff’s case) or since the 1960s (on the defendant’s evidence).  In either case, if the ingredients of adverse possession are present, the title of the defendant would have extinguished by the latest, 1989 (20 years from 1969) which well pre-dates the Tenancy Agreement made in 1999.

34.  The plaintiff has also not been able to adduce any direct evidence on his claim that the original wooden hut was built by his parents when they first occupied the Land since around 1958.  However, the following would appear to support the plaintiff’s case.

35.  The defendant claims that the hut was there since he inherited the Land from his ancestors in the 1950s.  I have not seen any evidence on this.  The defendant denies that the hut on the Land was ever demolished.  This is evidently inconsistent with the Joint Expert Report (see paragraphs 10 and 29 above).  The defendant said that if the hut were to be demolished, the plaintiff and/or his parents would have had to seek his approval.  The defendant confirmed in his oral evidence that at no time, did the plaintiff and/or his parents sought such approval.  No doubt, if the wooden hut was indeed the defendant’s and the plaintiff’s parents had demolished the wooden hut without the defendant’s approval, there would have been evidence of the defendant complaining about this.  I have not seen such evidence.  The evidence before me suggests that the plaintiff’s parents demolished the original wooden hut without any protest from the defendant.  For the above reasons, I am satisfied that the original hut was indeed built by the plaintiff’s parents. 

36.  Turning to the payment of rent, the plaintiff says that he and his parents have never made such payment for the Land.  The plaintiff’s assertion is supported by PW2’s evidence.  During cross-examination, PW2 explained that the reason why her parents moved to Pokfulam Village in around 1968 (as opposed to around 1970 as suggested by the plaintiff) was that her parents were not able to earn a living from farming.  PW2 said that this was only a temporary arrangement as it was not known whether living in Hong Kong Island would suit the family and whether her father was able to maintain his job there. According to PW2, if anything uneventful occurred, for instance, her father lost his job, she and her family would return to reside at the Land.  PW2 explained that whilst her family had moved out to Pokfulam Village, they had a Mr Chau look after the hut on the Land. PW2 confirmed that the hut was not rented to Mr Chau.  I accept PW2’s evidence.  If the plaintiff’s parents have been paying rent for the Land, logically, they would have charged rent to Mr Chau to cover the rent payable to the defendant.  This is particularly significant given that the plaintiff’s parents would appear to have been earning a limited income.  PW2 also confirmed that at no time did her parents pay rent for the Land but that her parents did pay rent for the Farmland.  Mr Danny Fung, counsel for the defendant sought to challenge PW2’s evidence on the basis that she was too young at the material time to have any personal knowledge of the matters testified above.  PW2 disputes this.  PW2 was born in 1952. According to her witness statement, she started to reside at the Land with her parents since around 4 to 5 years old and had continued to do so (apart from the period when she and her parents moved out to Pokfulam Village) until she married in 1976.  By the 1960s and certainly whilst PW2 and her family had moved out to Pokfulam Village, PW2 would have been between 10 to 20 years old. For this reason and given that she had been living with her parents until she got married in 1976 (which by then, she would have been around the age of 24), I am satisfied she would have had personal knowledge of the matters testified. Further, having heard PW2’s evidence and seen her demeanour in court, I find PW2 to be a reliable witness and I accept her evidence.

37.  The plaintiff had consistently said in his evidence that he did not pay rent for the Land and that he had only paid rent for the Farmland initially to Tam Chau and subsequently to DW3 (which the plaintiff had understood to be the effect of the Tenancy Agreement).  I accept the plaintiff’s evidence.  In doing so, I bear in mind the observations made in Wong Tak Yue referred to in paragraph 18 above and I have also taken into account the evidence that the plaintiff gave in the Lands Tribunal (LDPD 269/2007) in respect of DW3’s application for recovery of vacant possession of the Land on the ground of expiration of the Tenancy Agreement (“the Lands Tribunal proceedings”).  The proceedings have been adjourned sine die, which I presume is pending the determination of these proceedings.  According to the transcript for the Lands Tribunal proceedings, the plaintiff (who is there the respondent) initially said that the payment of rent by him and his parents was for the Land. However, later in his evidence, the plaintiff clarified that the rent actually related to the Farmland.  The plaintiff explained the inconsistency to have been a slip of the tongue.  I accept this.  Having heard the plaintiff’s evidence and seen his demeanour in court during the trial of these proceedings, I accept that the plaintiff did not receive formal education and that he can be considered illiterate.  Whilst the plaintiff may have been clumsy in expressing himself in the course of giving evidence, the plaintiff has impressed me as an honest and truthful witness.

38.  Further, in the plaintiff’s Notice of Opposition in the Lands Tribunal proceedings dated 8February 2007 (which according to the plaintiff was written by his neighbour, Ah Tai as the plaintiff is illiterate), the plaintiff already said that rent was only paid for the Farmland and not for the Land.  The plaintiff was not legally represented in the Lands Tribunal proceedings.  In addition and in these proceedings, the plaintiff said that since he had resided at the Land in late November 1979, and over the years, he had carried out refurbishment/renovation work to the hut.  The extensive refurbishment/renovation work is evident from the Joint Expert Report (see paragraphs 10 and 29 above).  In my judgment, it would be odd for a tenant to carry out the various extensions to the hut as observed in the Joint Expert Report.

39.  Turning to the defendant’s evidence on the topic, the defendant said that the issue of receiving rent from the Land was handled by his mother, Ng Ying Tai and/or his wife and that he had no involvement in this.

40.  On 10 November 1959, and by way of succession to property, the defendant with Chan Choy（陳才）as his trustee, inherited over 30 pieces of land in Demarcation District no 1, Lamma Island including the Land from his grandfather, Chan Yi Hing.  On 29 May 1980, and by way of assignment, Chan Choy assigned the legal title to those various pieces of land including the Land to the defendant.  During cross-examination, the defendant was asked whether apart from the Land, he had also rented out his various lands.  It is curious that the defendant only recalls having rented out the Land but not the remaining 30 odd pieces of land.  The defendant sought to explain this by suggesting that he was often out of Hong Kong because he was a sailor and had left the collection of rent to be handled by his mother and/or his wife.  The defendant claimed that during the 1960s, earning a living was difficult, his focus was therefore on his job and not on collection of rent from his lands.  The general impression that the defendant sought to give in his evidence was that he left the collection of rent from his lands entirely to his mother/wife as he had to focus on his job and that collection of rent was perceived by him to be unimportant.  I am not persuaded by the defendant’s explanation.  In my view, if every penny were so important to the defendant, he would have closely monitored the collection of rent from his lands bearing in mind he had over 30 pieces of land, the amount of rent receivable would not have been insignificant.  Further, the above testimony of the defendant still does not explain why he only recalls renting out the Land but not the other 30 pieces of land.  The defendant admitted during his evidence that he did not know the names of the plaintiff’s parents. This is surprising if the defendant had indeed rented out the Land to the plaintiff’s parents for 10 odd years (on the defendant’s case, between the 1960s to 1980 when the plaintiff allegedly took over the lease of the Land from his parents).  It is also of significance that the defendant said that he has no record of renting out his lands and nor does he know whether his mother and wife had kept such records.  The defendant appears to me to be evasive on the topic.  If indeed the defendant had rented out so many pieces of his land, in all probabilities, the defendant’s mother, wife or himself would have kept some sort of written record of which land had been rented out.  Such record would probably have shown whether the defendant had indeed rented out the Land to the plaintiff and his parents.  Throughout the defendant’s oral evidence, my impression has been that the defendant is trying to distant himself from the question of whether the plaintiff’s parents and the plaintiff had paid rent for the Land and have been attempting to pass the question to his mother and wife who cannot now give evidence on this as they passed away in around the 1990s and 1986/87 respectively.

41.  DW2’s evidence did not advance matters further for the defendant. During cross-examination, DW2 admitted that he only knew of the alleged lease of the Land by the plaintiff’s parents and the plaintiff as he was told of the same by the defendant’s mother, Ng Ying Tai and Tam Chau.  DW2 also admitted that he did not know how much and when rent was allegedly collected from the plaintiff’s parents and the plaintiff.  In my judgment, DW2 simply has no personal knowledge of the alleged lease of the Land to the plaintiff’s parents and plaintiff.  I place no weight on DW2’s assertions.

42.  DW3 said that he had personal knowledge of his grandmother, Ng Ying Tai receiving rent from the Land since the 1960s.  According to DW3, his grandmother had also been receiving rent from other lands of the defendant, however and like the defendant, he only has specific recollection of the Land. The question again is how does he have that specific recollection?  Apart from saying that he acquired the personal knowledge from the fact that he was living with his grandmother at the material time, DW3 was not able to explain the basis of his specific recollection.  DW3 was born in 1961 and thus in the 1960s, he would have only been of a tender age and certainly well below 10 years old.  It strikes me that DW3 is able to stretch his memory so far back and have specific recollection of the Land being leased to the plaintiff’s parents when at the time, there were many other of the defendant’s land being rented out.  DW3 has not satisfactorily explained the basis of the specific recollection.  For the reasons above and for the reasons I shall explain below regarding DW3’s testimony, I find myself unable to rely on this aspect of DW3’s evidence.

43.  As to the events which lead to the signing of the Tenancy Agreement, the plaintiff’s evidence is that he had a total of four encounters with DW3 and/or three other individuals at the Land between mid-September and mid-October 1999.  On the first and second occasions, only DW3 was present at the Land. According to the plaintiff, DW3 said that the plaintiff need not make any further payment of rent for the Farmland to Tam Chau and that in future, he should pay the rent to DW3.  The plaintiff replied that this was unreasonable as he had always been paying rent to Tam Chau.  On the third occasion, three individuals went to the Land.  DW3 was not present.  The three individuals said that the Land was theirs and that the plaintiff should not place anything there and if the plaintiff continued to do so, they would demolish/dispose of the same.  The plaintiff refused.  The three individuals then started to break things in the house including breaking the plaintiff’s stereo and kitchen hood.  They also pulled down the metal ceiling panels in the house.  On the fourth occasion, DW3 came with three individuals and continued to break things in the plaintiff’s house.  They said that the Land was theirs and that the plaintiff had used the Land.  DW3 and the three individuals threatened to break everything in the house.  DW3 then said to the plaintiff that he need not pay further rent for the outside Farmland to Tam Chau as the same would be collected by DW3.  The plaintiff again refused to do so saying that he did not know DW3.  DW3 then produced the Tenancy Agreement and said that as the plaintiff did not know DW3, the plaintiff should sign the Tenancy Agreement. DW3 requested the plaintiff’s telephone number and identity card (it is evident that DW3 had at some stage requested the plaintiff’s identity card as the plaintiff’s identity card number is recorded on the covering page of the Tenancy Agreement).  The plaintiff told DW3 that he did not have to pay anything for the Land.  DW3 assured the plaintiff that the payment was only for the Farmland and said that the rent would be increased to HK$200 per annum. DW3 also said that the lease would be on a five year basis and requested the plaintiff to pay HK$1,000 (ie payment of the entire five years rent). According to the plaintiff, on the fourth occasion, the plaintiff’s wife and his two sons were present (aged 7 and 8 years old at the time).  The plaintiff’s evidence is that his wife and his two sons were frightened having seen what had happened during the fourth encounter with DW3 and the three individuals and told the plaintiff to sign the Tenancy Agreement which the plaintiff claims he could not read and was mislead into believing that it related to the Farmland.  The plaintiff also said that he was frightened at the time and worried for the safety of his wife and sons.  According to the plaintiff, it was under such circumstances that he signed the Tenancy Agreement.

44.  On the other hand, DW3 denies having made threats of violence against the plaintiff and misleading the plaintiff into believing that the Tenancy Agreement related to the Farmland.  During cross-examination, DW3 said that prior to signing the Tenancy Agreement, he had read the document to the plaintiff.

45.  For the reasons mentioned in paragraph 37 above, I accept the plaintiff’s evidence in paragraph 43 above.  It is of significance that the plaintiff had made a one off payment of HK$1,000 to DW3 for the rent payable for the entire five years.  In my judgment, there would have been no reason for the plaintiff to have made the payment given the fact that he had previously been paying rent to Tam Chau on an annual basis.  There obviously must have been something which triggered the plaintiff to make the one off payment.  In my view, it was because of the threats of violence by DW3 and the three individuals.  Indeed, DW3 was not able to offer any explanation as to why the plaintiff made the one off payment.  Further, DW3’s suggestion that he had read the Tenancy Agreement to the plaintiff prior to signing was not mentioned in his witness statement which merely said that the plaintiff signed the Tenancy Agreement “after fully understanding it.”  DW3’s statement did not state the basis of the “understanding”.  The absence of such explanation is telling when the plaintiff’s main complaint of the Tenancy Agreement in these proceedings is duress and non est factum.  In my judgment, DW3’s claim that he had read the Tenancy Agreement to the plaintiff is a recent invention by him.  As I have mentioned in paragraph 6 above, the Tenancy Agreement is fairly comprehensive. In my view, a person of the plaintiff’s background and the fact that he is illiterate would not be able to understand the Tenancy Agreement without being properly explained to him.

46.  Mr Fung submitted that the alleged threats of violence and misrepresentation on the part of DW3 is improbable because after signing the Tenancy Agreement, the plaintiff did not seek to have someone who is literate to explain the Tenancy Agreement in order to ascertain the true effect of the document and that the plaintiff did not report the matter to the police immediately after any of the four occasions.  With respect, I do not see the logic of this insofar as the plaintiff’s claim that he had been mislead into signing the Tenancy Agreement.  It is the plaintiff’s case that he had signed the Tenancy Agreement as he had understood the document to be referring to the Farmland.  With such a belief, it is difficult to see why it would have been necessary for the plaintiff to have asked someone to explain the Tenancy Agreement to him.  Further, insofar as reporting the incident to the police is concerned, the plaintiff already said in his evidence that he did so but no statement was taken.

Evidence of defendant & DW2

47.  I have more or less covered the evidence of the defendant and DW2 in above section concerning the evidence of the plaintiff and PW1. 

48.  As I have mentioned in paragraph 40 above, during the course of his evidence, the defendant was evasive.  He had sought to distant himself from the core issue of whether the plaintiff and his parents had rented the Land by passing the question onto his mother, Ng Ying Tai and wife who have since passed away.  In my judgment, the defendant’s evidence does little, if any to advance his case.  I attach no weight to the defendant’s evidence.  Further and in any event, having heard the defendant’s evidence and seen his demeanour in court, I find him to be an unreliable witness.

49.  As to DW2’s evidence, I repeat paragraph 41 above.  In my judgment, DW2 is only giving evidence to lend support to the defendant’s case, who is his brother-in-law.

DW3’s evidence

50.  I have already made various observations on DW3’s evidence.  By reason of those observations and the observations in the following paragraphs, I find DW3 not to be telling the entire truth.  At times, he has been evasive to the questions raised by Mr Szeto.  He has also been giving inherently inconsistent answers.  I find myself unable to rely on DW3’s evidence.

51.  In his witness statement, DW3 asserted that the house built upon the Land is divided into two parts – one facing the footpath being no 23 Pak Kok San Tsuen, and the other facing North opposite the footpath known as no 22 Pak Kok San Tsuen.  According to DW3, no 22 Pak Kok San Tsuen was rented to one Cheung Ma Hon.  In other words, DW3 asserts that there are two units under the same roof top on the Land.

52.  The plaintiff disputes the existence of no 22 Pak Kok San Tsuen.

53.  In support of his claim of the existence of no 22 Pak Kok San Tsuen, DW3 has produced four tenancy agreements which he had signed with Cheung Ma Hon purportedly to be in respect of the lease of no 22 Pak Kok San Tsuen for the period from 15 December 1998 to 1 May 2003 and initially for an annual rent of HK$200 and subsequently for the period between 1 May 2001 and 1 May 2003, at a monthly rent of HK$500.  The defendant did not call Mr Cheung to give evidence.  DW3 sought to explain this by saying that he could not find Mr Cheung as he had since moved out of no 22 Pak Kok San Tsuen.  I do not accept this explanation.  DW3 said in his evidence that he had Mr Cheung’s telephone number but stop short of mentioning that he had tried to contact Mr Cheung.  In my view, DW3 simply did not make any effort to contact Mr Cheung.  Further, I have not seen any photographs in support of the existence of no 22 Pak Kok San Tsuen.  I have also not heard any evidence from the defendant nor DW2 on the topic in particular that there are two units under one rooftop on the Land. Where a party fails to adduce evidence which is material to an issue, this court is entitled to draw from the facts which have been disclosed all reasonable inferences as to what are the facts in respect of which that party has chosen not to adduce evidence (see British Railways Board v Herrington [1972] AC 877).

54.  Apart from The New Territories Lot/Address Cross Reference Table (8^th edition) (“NT Lot/Address Table”) which I shall explain below, no 22 Pak Kok San Tsuen does not appear in any of the survey sheets and lot index plan adduced as evidence.  The Joint Expert Report has appended survey sheets from the Survey and Mapping Office of the Lands Department for 1963, 1973, August 1981, October 1987, September 1998, December 1999, January 2003 and August 2007.  No 22 Pak Kok San Tsuen does not appear on any of those survey sheets.  The Lot Index Plan no 14-NE-5D for Demarcation District no 1 dated 27 August 2007 (also appended to the Joint Expert Report) again does not show no 22 Pak Kok San Tsuen.

55.  However, no 22 Pak Kok San Tsuen is referred to in the NT Lot/Address Table which provides that nos 22 and 23 Pak Kok San Tsuen are situated on Lot no 5.  According to the introduction of the Table, “the 8^th edition shows the position as at 31 December 2006, according to data supplied by the Rating and Valuation Department and information available in the Land Registry up to that date.”  As apparent from paragraph 54 above, the relevant survey sheets and lot index plan produced after 31 December 2006 make no reference to no 22 Pak Kok San Tsuen.  I have not been given any explanation as why the Government publications may be internally inconsistent.  Nevertheless and for the purposes of this judgment, I need not make a finding either way as to whether no 22 Pak Kok San Tsuen exists.

56.  Taking the defendant’s evidence at its best, it only shows that the defendant had rented out part of the Land ie no 22 Pak Kok San Tsuen since December 1998.  The defendant has not adduced any evidence to suggest that no 22 Pak Kok San Tsuen had been rented out at an earlier date.  As I have mentioned in paragraph 33 above, if the ingredients of adverse possession are present, by the latest, 1989, the title of the defendant to the Land would have extinguished in which case, it matters not whether DW3 (and assuming that he had authority on behalf of the defendant which I will discuss in the paragraphs below) had indeed rented out part of the Land, no 22 Pak Kok San Tsuen in 1998.

57.  On the issue of whether DW3 had the authority to enter into the Tenancy Agreement on behalf of the defendant, according to DW3’s witness statement, since 1999, DW3 has been acting as agent for the defendant in attending to all tenancy matters in relation to the Land allegedly in place of Tam Chau who was already 80 years old at the time.  The terms of what DW3 was allegedly authorised to do appear to be somewhat inconsistent with the defendant’s witness statement which provides that in 1999, he had appointed DW3 in place of Tam Chau to collect rent from the Land (as opposed to attending to all tenancy matters in relation to the Land as alleged by DW3).  Further, the alleged timing of the authorisation in 1999 does not fit in well with the defence’s evidence that in 1998, Chan Chun Man had on behalf of the defendant entered into a tenancy agreement with Cheung Ma Hon in respect of no 22 Pak Kok San Tsuen which also allegedly is situated on Lot no 5 ie the Land (see paragraph 53 above).  During cross-examination and when questioned on the circumstances in which the defendant gave the alleged authority, DW3 initially said that this was given casually over a cup of tea.  When questioned further on the topic, DW3 said that in the 1980s, the defendant had given a written authorisation to DW3 but whether that written authorisation included the Land, DW3 said he could not recall.  The defendant has not adduced that written authorisation as evidence in these proceedings.  DW3 claims that he had produced this in the Lands Tribunal proceedings.  According to the written transcript for those proceedings, it appears that DW3 had produced some sort of written authorisation but dated 1 August 2001 (ie which post dates the Tenancy Agreement) and not a written authorisation of the 1980s as suggested by DW3. There is no evidence before me as to the terms of the 2001 written authorisation.

58.  Whilst it appears that at some stage, the defendant did give some sort of authorisation to DW3 to deal with the defendant’s land(s), on the available evidence, the terms of the authorisation and when it was given is far from clear.  In my judgment, the defendant has failed to prove on a balance of probabilities that DW3 had the necessary authority to enter into the Tenancy Agreement.

MY FINDINGS

59.  Having analysed the evidence, I make my findings as follows.

60.  I am satisfied that the plaintiff’s parents have been in occupation of the Land since around 1958 or by the latest in the 1960s.  That in going into occupation, the plaintiff’s parents had built a wooden hut upon the Land which extended beyond the boundaries of the Land.  The plaintiff’s parents have since been residing at the Land until around 1968/70 when the plaintiff’s parents moved to reside at Pokfulam Village in the hope of being able to earn a better living.  I accept that the arrangement was temporary and that in the meantime, the plaintiff’s parents had Mr Chau to occupy and look after the hut on the Land rent free.  The plaintiff’s mother returned to reside at the Land in around 1977.

61.  I accept that in substance, Mr Chau had occupied the Land between 1968/70 and 1977 on the basis of a license granted by the plaintiff’s parents. It is well established that a squatter can be in adverse possession of land through his licensee’s occupation of the land (Cheung Yat Fuk v Tang Tak Hong and Others referred to in paragraph 19 above).

62.  Since late November 1979, the plaintiff has been residing at the Land till this date.  I am satisfied that the plaintiff through his parents, Mr Chau and himself have been in continuous possession of the Land since around 1958 or the 1960s.  In any event, the defendant does not appear to dispute that the plaintiff and his parents have been in continuous possession of the Land since the 1960s.  As I have mentioned above, what the defendant does dispute is the nature of that possession.  From my analysis of the witnesses' evidence above, I am satisfied that on balance, at no time did the plaintiff and his parents pay rent for the Land.  I am also satisfied that the rent which they did pay was in relation to the Farmland which is separate and distinct from the Land.

63.  In order to determine whether the plaintiff has been in adverse possession of the Land, I need to consider whether the plaintiff has shown both factual possession and the requisite intention to possess.

64.  As I have mentioned above, continuous factual possession does not appear to be disputed by the defendant at least since from the 1960s.  In any event, I am satisfied from the fact of the plaintiff's parents occupying and building the wooden hut on the Land in around 1958 and subsequently demolishing and rebuilding a new one in 1977 without requiring the approval of the defendant and that the plaintiff had since 1979 been residing at the Land and over the years he had carried out refurbishment/renovation work, the plaintiff and his parents have been dealing with the Land as an occupying owner might have expected to deal with.  I am also satisfied from such facts that the plaintiff has shown the requisite intention to possess.

65.  In the circumstances, whether the plaintiff's parents started to be in adverse possession of the Land since around 1958 or the 1960s, I find that by the latest 1989 (20 years from 1969), the defendant's title to the Land would have extinguished.

66.  In the light of the conclusion that I have reached in paragraph 65 above and that given that an owner's title once extinguished, a subsequent acknowledgement cannot revive the title (see paragraphs 19 and 20 above), it is strictly not necessary for me to determine the effect of the Tenancy Agreement.  However, given that the parties have argued the issue at some length and for completeness, I shall deal with this issue briefly.

67.  I have found that DW3 did not have the necessary authority to enter into the Tenancy Agreement.  Further, for the reasons set out in paragraphs 43 to 46 above, I am satisfied that the plaintiff's case of non est factum and duress have been made out.  The plaintiff is illiterate.  At the time when he entered into the Tenancy Agreement, he was misled by DW3 into believing that the Tenancy Agreement related to the Farmland when in truth, the Agreement concerned the Land.  The plaintiff was also subject to threats of violence by DW3, fearing for himself and his wife and children, the plaintiff signed the Tenancy Agreement.  In Lloyd v Coote and Ball [1915] 1 KB 242, it was held that an acknowledgment obtained by undue influence is of no effect.  I cannot see why and I so rule that this should not equally apply to acknowledgments obtained by duress or one where a person had been misled into making.

68.  For the above reasons, I find that the Tenancy Agreement cannot constitute a valid acknowledgement by the plaintiff of the defendant's title to the Land for the purposes of Section 23 of the Limitation Ordinance.

CONCLUSION

69.  In the circumstances, I am satisfied that the plaintiff is entitled to the declarations sought.  I give judgment to the plaintiff for declarations that:-

(1)  the plaintiff has acquired and is entitled to the possessory title, interest and/or rights in and/or over the Land ie all that piece or parcel of ground registered in the Land Registry and Lot no 5 in Demarcation District no 1, no 23 Pak Kok San Tsuen, Lamma Island; and

(2)  the defendant’s title, interests and/or rights in and/or over the Land have been absolutely extinguished.

70.  In his Amended Statement of Claim filed on 28 February 2012, the plaintiff also seeks an order that he be at liberty to register this judgment with the Land Registry.  I do not consider such an order to be necessary as this will be sufficiently catered for in the Land Registration Ordinance Cap 128.

71.  For the above reasons, it follows that the plaintiff should be entitled to his costs of this action together with certificate for counsel.  I make such an order on a nisi basis.