CHEUNG CHUNG YAN v. CHAN MAN KWONG AND OTHERS

CACV268/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 268 OF 2003

(ON APPEAL FROM DCCJ NO.19667 OF 2001)

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J U D G M E N T

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Hon Ma CJHC :

Introduction

1. In the present proceedings, the defendants appeal, with leave, the judgment of HH Judge Wesley Wong handed down on 21 January 2003 after a 3-day trial in which vacant possession of some land situate at Tsuen Wan was ordered in favour of the plaintiff against the defendants together with an order that damages be assessed.

2. The land in question is registered in the Tsuen Wan New Territories Land Registry as Lot No.747 in Demarcation District No.453 ("the Land"). The registered owner of the Land is the plaintiff. Adjacent to the Land is Lot No.1259 ("Lot 1259") which is jointly owned by the defendants.

3. The relationship of the defendants to the plaintiff is as follows:-

(1) Chan Man Kwong (D1) is the husband of Cheung Chok Ying (D2) who is the elder sister of the plaintiff.

(2) Chan Yuk Kwan (D3) is the daughter of D1 and D2 and hence the plaintiff's niece.

4. The plaintiff's claim against the defendants can be described simply. It is on the basis that on various dates over the past 30 years or so, the defendants have been permitted to occupy parts of the Land under licence from the plaintiff. That licence, according to the plaintiff, was terminated by a letter dated 25 September 2001 from the plaintiff's solicitors to the defendants. Proceedings were issued by the plaintiff in the District Court on 9 November 2001. The pleaded particulars of the licence granted to the defendants refer to specific events in 1973, 1985 and 1988, as to which I will further refer below.

5. The defendants' defence is on the basis of adverse possession. As pleaded in the Re-amended Defence and Counterclaim, the material facts and averments are as follows:-

(1)	In or about 1951, D2 was allowed by her (and the plaintiff's) father, one Cheung Wun Ting, to work on a portion of the Land.
(2)	Since then, D1 and D2 have fenced off a portion of the Land, built on Lot 1259 a two-storey house which has protruded into the Land and also erected a wall around the house. A canopy was built on the Land as well.
(3)	At no stage has the plaintiff granted any sort of licence to the defendants to occupy the Land or any part thereof. The critical assertion made by the defendants is that they have been in adverse possession of the Land in excess of 20 years before the action was commenced.
(4)	Reliance is accordingly placed on sections 7(2) and 17 of the Limitation Ordinance, Cap.347 ("the Ordinance") for the averment that the plaintiff's title to the Land has been extinguished and instead, it is the defendants who have acquired rights of ownership in respect of the same. A declaration is sought in the Counterclaim to this effect.

The judgment below

6. In the course of a 3-day hearing, Judge Wong heard testimony from the plaintiff's wife, Cheung Loo Sioe Yien ("Mrs Cheung"), D2 and D3. All three provided witness statements. The plaintiff also provided a witness statement but he did not give evidence, having recently suffered a stroke. Mrs Cheung, however, adopted (and was permitted by the judge, in the absence apparently of any objection from the defendants, to do so) the contents of the plaintiff's witness statement as her own evidence, although it was made clear at the commencement of her testimony that she could only do so in relation to events after 1961 from her own personal knowledge. The facts set out in the following paragraph are therefore to be taken to be from Mrs Cheung's personal recollection. No criticism has been made in the Notice of Appeal on the basis that she did not have personal knowledge nor was this knowledge challenged in her cross-examination at trial.

7. In his judgment, the learned judge set out the effect of Mrs Cheung's testimony as follows:-

(1)	At one stage at least, she and the plaintiff had a very good relationship with the defendants and were on good terms with them.
(2)	In 1973, when the defendants wanted to build a house on Lot 1259, the plaintiff helped them apply for the necessary permission from the Tsuen Wan District Land Office. After permission was granted, when the house was being built, the plaintiff allowed the defendants to extend the balcony of the house to protrude into the Land upon their agreement, however, to demolish the same if so demanded by the plaintiff. This incident in 1973 is in my view important.
(3)	Between 1973 and 1985, the plaintiff's servants grew vegetables and mowed grass on a part of the Land. In her evidence, Mrs Cheung said that she and the plaintiff would go to the Land from time to time and visit the defendants.
(4)	In 1985, when the plaintiff and Mrs Cheung were thinking of emigrating, they went to the Land. At that time, they saw that a concrete wall or fence had been built on the Land. When asked for an explanation, D2 made some reference to keeping out stray dogs. Approval was given for the wall. In the plaintiff's witness statement, it was said that the plaintiff expressly allowed the defendants to occupy the Land free of rent on the mutual understanding that this licence would be terminated upon reasonable notice being given.
(5)	After emigrating to Canada, the plaintiff and Mrs Cheung returned in 1988 (just before Chinese New Year) and visited the defendants. They noted that a canopy had been built. At that time, D2 told them that whenever they (the plaintiff and Mrs Cheung) might need the Land, the defendants would demolish the canopy.
(6)	In subsequent visits, the position was made clear to the defendants by the plaintiff that although he did not have any plans to develop the Land at the time, should the Land be so required, the defendants had to return it. In her evidence-in-chief, D2 said this:-
	" 'If I [the plaintiff] want to use this piece of land you [D2] have to return it to me.' And every time she mentioned that, 'If you [the plaintiff] really want to use it, this piece of land, I [D2] will return it.' Every time she told her younger brother, Cheung Chung-yan [the plaintiff], about this."

8. The judge also set out the material parts of the testimony of D2 and D3.

9. In evaluating the testimony and credibility of the witnesses, the judge stated he had considered the evidence before him including photographs. He found that each of the witnesses had not been telling the whole truth. Mr Sammy Hui, who appeared for the defendants, submitted that this meant the judge must have rejected the whole of the evidence of the witnesses, especially that of Mrs Cheung. I cannot agree with this submission. The judge clearly meant that only certain parts of the witnesses' evidence were to be rejected, but not all. This is not uncommon in the assessment of the testimony of witnesses in a trial. It is clear from the judgment that where he did not accept the particular witness's testimony in any respect, this was spelt out. As far as Mrs Cheung was concerned, the learned judge said this:-

"Equally Mrs Cheung had not been telling the whole truth. Mrs Cheung adopt the statement of the Plaintiff. The Plaintiff in his statement said 'up to 1985 my wife and I had no particular plan for the development or use of the land'. However she in the witness box said that between 73-85 her servants grew vegetables and mould [sic] grass in that land. Further she said that in 1985 she saw a fence surrounding the pink portion. However from the aerial photo taken in 1980 it shows that there was already some sort of fence in that area."

10. Accordingly, in my view, the judge must be taken to have accepted those other parts of Mrs Cheung's testimony set out in paragraph 7 above. It is true that in his judgment, the judge expressly found D2 knew that the Land belonged to the plaintiff, that in 1985 he allowed D1 and D2 to use the Land (thereby acknowledging the plaintiff's title to it) and that the defendants had abandoned the Land when they emigrated to the US in 1992 (with D3 joining them in 1999). However, these express findings did not exclude the making of other findings, although it may have been more desirable had he done so in clearer terms.

The issue on appeal

11. It was clear from Mr Hui's written submissions (and this was confirmed in the course of his oral submissions) that the fundamental question before the judge was whether the defendants were in adverse possession of the Land or any part thereof prior to the issue of the writ for the requisite stipulated period under the Limitation Ordinance so as to bar the plaintiff's action. Mr Hui submitted that even if in 1985 there had been an acknowledgment of title by the defendants, the plaintiff's title had already by then been extinguished by reason of over 20 years' adverse possession by the defendants. The relevant period under section 7(2) of the Ordinance is now 12 years but at that time it was still 20 years. The acknowledgment in 1985 was, he also submitted, an oral one and this was therefore of no effect given that any acknowledgment sufficient to reactivate the limitation period under section 23 of the Ordinance, had to be in writing:- see section 24.

12. The simple question for determination in this appeal is therefore: Was there sufficient evidence of adverse possession? I now deal with this crucial issue.

Was there sufficient evidence of adverse possession?

13. In my view, the answer is No.

14. Before identifying the reasons for arriving at this conclusion, I would briefly just set out the well-known principles regarding adverse possession:-

(1)	There are essentially two requirements. A person claiming to be in adverse possession must be shown to have both possession and the actual intention to possess and treat the land as his own, to exclude all others including the true owner:- see Wong Tak Yue v Kung Kwok Wai (No.2) (1997-1998) 1 HKCFAR 55, at 68E-J; Tang Tak Hong v Cheung Yat Fuk [2002] 3 HKLRD 743, at 745 (paragraph 6).
(2)	These requirements are questions of fact:- see Wong Tak Yue at 69A.

15. There is no doubt that the first requirement is satisfied. The evidence shows clearly that the defendants (or some of them) have been in occupation of parts of the Land since about 1951.

16. However, I am equally in no doubt that the second requirement (the intention to possess as defined by the Chief Justice in Wong Tak Yue) has not, on the facts, been satisfied in the present case:-

(1)	Even at the commencement of the occupation of the Land by D2 (and her husband, D1) in 1951, this would appear to have been by way of licence since she was asked by her father to work on a portion of the Land. Although she did not have to pay any rent or fee for this occupation, it can be inferred that she could not have been under any impression that she was somehow occupying the Land to the exclusion of the true owner (at that time her father). When this point was put to Mr Hui during his submissions, he appeared to accept this but argued instead that the defendants' case was really that the licence granted to D1 and D3 must have expired with the death of Cheung Wun Ting in 1964. This was therefore the relevant time from which adverse possession commenced for the purposes of the Ordinance. It may not matter but this was not the way the defendants' case was pleaded.
(2)	More important, nothing in the evidence demonstrates that as from 1964, the defendants had the intention to exclude the true owner (the plaintiff) from the Land. The evidence and the judge's acceptance of those facts set out in paragraph 7 above, demonstrate quite the contrary.
(3)	The occurrences in 1973 (paragraph 7(2) above) give rise to the inference not only that the defendants knew the plaintiff to be the true owner of the Land, but, more important, that any occupation by them of the Land would be allowed only for as long as the plaintiff tolerated it. In other words, a licence to terminate upon notice can be implied. The force of this is not taken away by the finding of the judge that in fact the balcony did not protrude into the Land. The important fact is what the plaintiff said to the defendants.
(4)	This inference is considerably reinforced when the other events (see paragraphs 7(3) to 7(6) above) are taken into consideration. The picture that emerges from the facts is that the plaintiff and Mrs Cheung were occasional visitors to the Land and on each occasion, it was made clear to the defendants that the Land belonged to the plaintiff and they were regularly reminded (and they accepted) that if the Land was required by the plaintiff, he could have it back. This was at its clearest as in 1985 when a licence to occupy was expressly granted on these terms to the defendants.

17. As a matter of law, where a person occupies land as a licensee or otherwise with the permission of the true owner, he is not in adverse possession, for he enjoys his occupation under lawful title:- see Buckinghamshire County Council v Moran [1990] Ch 623, at 636.

18. Mr Hui made a number of submissions on the evidence which can be disposed of as follows:-

(1)	It was said as a legal proposition that enclosure of a property is the strongest possible evidence of adverse possession and the defendants in this case had built a house that encroached on and occupied a part of the Land, fenced it in and built a wall as well. The evidence also showed that the plaintiff and Mrs Cheung had to go through the defendants' house using a gate in order to gain access to the Land. Reliance was placed on Seddon v Smith (1877) 36 LT 168 for the above proposition. I accept this, but it must firmly be borne in mind that the potency of such evidence of enclosure is premised entirely on the fact that the true owner is intended to be excluded. In the present case where the true owner of the Land regularly (at least occasionally) visited it (and indeed used it by growing vegetables and mowing the grass), not to mention the constant affirmations of ownership, not much significance is to be placed on the fact that the defendants enclosed the Land. Such enclosure was consistent with the exclusion of the world at large except the true owner.
(2)	It was also argued that the judge was wrong in attaching any significant weight to Mrs Cheung's testimony given the inconsistencies in her evidence and also the presence of evidence to the contrary. In particular, emphasis was laid on Mrs Cheung's adoption of that part of the plaintiff's witness statement relating to the events in 1985. In the witness statement, he referred to the granting in 1985 of a licence to the defendants to occupy the Land. The plaintiff added it was then that the defendants built a wall at the side or back of their house. An aerial photograph taken in 1980, however, shows the existence of the wall at that time. When giving evidence as to this 1985 incident, Mrs Cheung said that when they visited the Land in 1985, the wall was already there. This was clearly inconsistent with what the plaintiff said about the wall being built only in 1985. According to Mrs Cheung, D2 was asked why the wall had been built, to which the reply was that it was needed to keep dogs out. Mr Hui argued that this (and other matters) should somehow have persuaded the judge to reject the entirety of Mrs Cheung's evidence and correspondingly, to have accepted D2 and D3's testimony. I disagree. The matters outlined above were expressly referred to by the judge in his judgment and he has fully taken them into account in his appraisal of the whole of the evidence. For my part, I see nothing to leave me to doubt that the judge was anything but entitled to make the findings and reach the conclusions he did. I have already earlier mentioned how common it is in trials for parts of a person's testimony to be accepted and other parts to be rejected. It is not for the Court of Appeal to substitute its own views of the case and the evidence for the views of the court below. The test has recently been reiterated by the Court of Final Appeal in Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336, at 350 (paragraph 42) where Bokhary PJ said,
	"The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand, it is nevertheless satisfied that his conclusion on the facts is plainly wrong. The Court of Appeal should intervene if so satisfied. But if not so satisfied, the Court of Appeal should defer to the trial judge's conclusion even if in some doubt as to its correctness." (emphasis added)
	I am not satisfied that we should interfere in the present case.
(3)	Ultimately, on the facts, Mr Hui was really inviting us to re-hear the case as though this was another trial of the action. With respect, this is not the role of the Court of Appeal. I perceive that most, if not all, of the submissions made to us in this appeal, were also made to the judge below and were duly considered by him.

Conclusion

19. For the above reasons, I would dismiss the appeal and make an order nisi that the costs of this appeal be to the plaintiff.

Hon Rogers VP :

20. I have had the advantage of reading the judgment of Ma CJHC. I agree that this appeal should be dismissed. I do not wish to repeat what has been said already but I would like to add a few words.

21. As is obvious, it is crucial to the defence to the plaintiff's claim to possession that the defendants establish that there has been adverse possession. Two matters seems to me to be important in this respect. In the first place it was the 1st and 2nd named defendants' case in their witness statements that they did not know that the plaintiff was the owner of the land. The judge expressly held that the 2nd defendant was aware at the relevant times that her father had been the owner of the land and that her brother had inherited it on the father's death, in accordance with the law applicable in the New Territories. Coupled with that the judge also found that the 2nd named defendant had started using the land to grow vegetables on the instruction of her father. It might be noted that her witness statement and the defence says that the father "allowed" her to use the land. Evidently that use had carried on after the father's death.

22. Although Mr Hui argued that the death of the father would have terminated any licence to occupy the land, that it seems to me, is not the point. The defendants seek to establish that they have been in adverse possession. Clearly on the judge's finding the possession cannot have been adverse during the father's lifetime. It is not a question of a licence, it is a question of the relevant defendants not having any intention to occupy the land adversely to anyone. On the death of the father the plaintiff became the owner of the land. The judge held that the relevant defendants would have known that, despite the fact that the 2nd defendant claimed to be ignorant of this fact. The judge also held that in those days the plaintiff and the defendants were on good terms. Hence it is necessary for the defendants to show that after the father's death their intention changed from occupying the land respecting the true owner's ownership, to occupying the land intending to dispossess the true owner.

23. Whilst it is correct that the plaintiff's pleading and witness statement state that the plaintiff gave permission for the erection of what might be called the patio and wall in 1985, Mrs Cheung's evidence was that these were discovered in 1985 prior to the plaintiff and herself emigrating. The judge's finding in this respect was:

"On balance of probability I find that D2 knew that plot of land belonged to the Plaintiff and that in 1985 at the request of D1 and D2 the Plaintiff allowed them to use that plot of land thereby the Defendants acknowledged the title of the Plaintiff as owner of that plot of land"

24. Given the evidence of Mrs Cheung I do not consider that there is sufficient ground for disturbing the judge's findings of fact, despite the fact that the amended statement of claim and witness statement of the plaintiff differ from the evidence of Mrs Cheung in the respect to which I have alluded. Implicit in that finding seems to me be the finding that the defendants never did have the intention occupying the land if it were contrary to the plaintiff's wishes.

25. Whilst the judge's findings of fact could have been more extensive, I consider that he has found sufficient facts to show that the defence failed.

Hon Cheung JA :

26. I agree.