CORONA LAND COMPANY LTD v. PERSONS IN OCCUPATION OF LOT NOS. 3906, 3907 AND SECTION A OF LOT NO. 3908 ALL IN D.D. 51, NORTH, NEW TERRITORIES, HONG KONG AND ANOTHER

DCCJ 2451/2015

[2023] HKDC 1333

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2451 OF 2015

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JUDGMENT

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INTRODUCTION

1.  Shum Yat Sing (“Mr Shum”) is a kung fu master. He claims to have lived in Wah (or Wa) Mei Shan Tsuen (畫眉山村) in Fanling all his life. In this case he is fighting a battle of a very different kind, in which he seeks to legally oust the paper owner of the land through adverse possession.

2.  The plaintiff, Corona Land Co Ltd (“Corona”), is a subsidiary of Hongkong Land Holdings Ltd (“HKL”). It is the registered owner of three lots of rural land, namely, Lots 3906, 3907 and 3908A located in Demarcation District 51, North, New Territories (“the Land”).

3.  In June 2015 Corona issued a Writ seeking possession of the Land. Initially Corona did not name any particular defendant but only used a general description currently ascribed to the 1^st defendant. After default judgment was granted, Mr Shum, now the 2^nd defendant, joined in the action and set aside the default judgment on 14 August 2018.

4.  In his Defence and Counterclaim (as recently amended) Mr Shum maintains that the action is time-barred by reason of adverse possession over an uninterrupted period of at least 12 (or 20) years. The precise extent of the area for which possessory title is claimed is indicated in the plan annexed to the Amended Defence and Counterclaim. The amendment was intended to clarify that a narrow corridor of land at the eastern edge of Lot 3908A is excluded from the claim. A colour copy of the plan is annexed to this Judgment.

5.  This is my judgment after a trial that lasted seven hearing days.

FACTUAL BACKGROUND

6.  Given that the burden of proof lies on the squatter, ie Mr Shum, it is convenient first to set out the basic parameters of his case. At the same time I will introduce the key historical events and documents against which the claim of adverse possession should be assessed. In this regard, the parties have helpfully supplied the court with an agreed chronology as well as an agreed bundle of documents to which I will refer.

7.  Mr Shum was born in 1968. In his witness statement, Mr Shum claims that he had been told by his father, Shum Tung Loi, that the Land was first occupied by Shum Fat, Mr Shum’s grandfather. The area was known as Wah Mei Shan Tsuen. The grandfather and father built three houses on Lot 3906, as well as a house each on Lot 3907 and Lot 3908A, as family dwellings. They also cultivated crops on a small plot of land in front of the two latter lots.

8.  According to Mr Shum’s witness statement, the houses on Lot 3906 are squatter huts officially registered with the District Lands Office. However, the structures on Lots 3907 and 3908A became dilapidated and collapsed in the late 1990s or 2000.

9.  In 1970, Shum Fat passed away. Shum Tung Loi continued to occupy and use the Land with his mother, his wife, Wong Ching Kiu, and their children, viz Mr Shum and his four siblings. After Mr Shum’s mother and grandmother died in 1977 and 1980 respectively, the remaining members of the family converted the structures on Lots 3907 and 3908A into storage spaces.

10.  I pause here to set out the history of transmission of legal ownership of the Land. From the records maintained by the District Lands Office and the Land Registry, it can be gleaned that prior to 1980, the Land was owned by Hop Wo Tong under a well-known form of traditional landholding in the New Territories.

11.  Among the agreed bundle of documents is a Modification of Tenancy No 37821 dated 15 October 1971 (“the MOT”) issued by the District Commissioner, New Territories. In this document, the owner of Lot 3906 was stated to be “Shum Kung Wo of Wo Hop Shek”. The MOT reads as follows:-

“In consideration of the payment of the fee of $12.00 p.a. the Crown hereby permits the modification of Crown Lease or purchase agreement of Lot/s no/s 3906 in D.D. 51 to the extent only that the registered owner Shum Kung Wo permits Wong Ching Kiu may for the period between 1/1/71 to 31/12/71 and to erect and maintain a T/S [i.e. temporary structure] of base dimension of 410 sq. ft./Ht 13½ for dwelling as indicated in red on a map marked 4 in the file no. TP 524/130/71 in the District office, Tai Po subject to the following general and special conditions …” (emphasis added)

12.  On 28 August 1980, with the consent of the District Officer, North, the Land was sold by the registered manager of Hop Wo Tong to Lai Choi Fung. On 31 October 1980, Lai Choi Fung sold the Land to Sze Tai Co Ltd, another subsidiary of HKL. Finally on 12 December 1985, Sze Tai Co Ltd sold the Land to Corona. The significance of the tong’s divestment of ownership will be further explored below.

13.  Continuing with Mr Shum’s story, he asserts that in or around 1990, he fenced up the Land with metal wire. Mr Shum and his father continued to live in one of the houses (designated No 11, Wah Mei Shan Tsuen) while his siblings left the family home one after another. (Incidentally Mr Shum claims that No 11 was built by his father in 1972.)

14.  According to his witness statement, in 1995, Mr Shum rented out the other two houses (designated Nos 10A and 10B). In this regard, Mr Shum called as a witness Mr Kwok Ka Wai who has for some years lived in No 10B, first with his father and, after the latter’s death, by himself. Evidence as to the precise period of the Kwoks’ occupation is not entirely consistent.

15.  Mr Kwok testified that he and his father only moved into No 10B in 2000, and not before. He produced several rental receipts the oldest of which goes back to February 2006 only. On the other hand, Mr Shum told the court that No 10B had in fact been rented to Kwok Ka Wai’s father by Shum Tong Loi in the late 1970s. The father was later joined by his son from about 2000 onwards. There is also conflicting testimony as to whether or not a written tenancy agreement had been entered into between Mr Shum and the Kwoks.

16.  On or about 11 December 1995, Mr Shum obtained a registration under the Societies Ordinance for “Hung Kuen Shum Yat Sing Martial Art Lion Dancing Group”. As shown by a letter from the police, the registration was made under his residential address at No 11. In this connection, Mr Shum told the court that he made a living teaching martial arts and running a lion dance troupe.

17.  Mr Shum also called in aid the testimony of Mr Leung Chung Kwong, aged 70, who from 1988 to around 2013 paid regular visits to the Lots to practise martial arts with Mr Shum. In 1995, Mr Leung was invited to join Mr Shum’s lion dancing troupe and later became its chairman. Despite his old age and dulled memory, I have no reason to doubt the general thrust of his testimony.

18.  In 2002, Lawson David & Sung Surveyors Ltd (“LDS”) was engaged by HKL to carry out a survey of the Land. Photographs taken between 4 January and 15 March 2002 show that two houses on Lot 3906 were, to quote the surveyor’s notes, “fenced off and occupied” but one can only see signs of uncontrolled overgrowth and rubbish items within the fenced area. Lot 3907 was observed by the surveyor to be “fenced off and partly traversed by a footpath” and “occupied”. Lot 3908A, which was in a similar state of disuse, was likewise “fence [sic] off” and “occupied”. There was, however, no sign of the car park or paved driveway described in the next paragraph.

19.  Sometime in 2002 or 2003, Mr Shum paved Lots 3907 and 3908A, as well as the footpath connecting the two Lots to the main access road, with concrete. He further erected some fencing around the lots which were subsequently rented out as parking spaces. He also used the space for storing martial arts equipment.

20.  In 2008, Mr Shum married his current wife, Madam Chan Heung Ping, in Mainland China, although the marriage was not officially registered in Hong Kong until 2013 or 2014. In 2010, a son was born. In 2011, Mr Shum’s father passed away.

21.  In around 2012, according to Madam Chan, she and her son began to reside at No 11 Wah Mei Shan Tsuen with Mr Shum on an intermittent basis, spending about half of their time there and the other half in her native Shanwei. Sometime after 2014, Madam Chan obtained permission to live in Hong Kong on a permanent basis.

22.  In June 2012, LDS was commissioned by HKL to carry out another survey. On 5 June 2012, Mr Wong Chi Wai, LDS’s surveyor who testified at trial, sighted a fenced carpark on Lots 3907 and 3908A. The two houses on Lot 3906 were seen to be fenced off and occupied. There is photographic evidence that Mr Wong posted up notices of eviction on all three lots. Mr Shum denies having seen the notices and speculates that they were taken by the same person who put them up solely to set up a trail of photographic evidence for the purpose of litigation.

23.  On Mr Shum’s case, he and his family, including his father and grandfather, had lived in peace on the Land without interference by the legal owners at any time prior to mid-2013. However, around June or July 2013, Madam Chan began to receive a series of menacing visits from a gang of hooligans, acting at the behest of Corona, with a view to evicting the Shum family.

24.  Corona denies that it had ever sent any ruffians to threaten Mr Shum or his family. Instead, it tried to reach out to the occupier of Lots 3907 and Lots 3908A through one of HKL’s employees, Matthew Chan Ka Long. In 2013 Matthew Chan, who had a degree in surveying, was a Residential Officer in HKL’s Residential Property department. At the same time, he was pursuing professional qualification as a surveyor, namely, membership of the Hong Kong Institute of Surveyors. At trial, he gave evidence under a subpoena issued at the behest of Corona.

25.  Matthew Chan described in detail his two visits to the Lots in July 2013, when he posted up legal notices in respect of Lots 3907 and 3908A. Soon afterwards, he received a telephone call from Mr Shum on his office number. This was, in fact, the number given as the registered landowner’s contact number in the notices. The call was followed by two handwritten fax messages sent by Mr Shum and dated 30 and 31 July 2013. Mr Shum does not dispute that he wrote and sent the two fax messages, but he is adamant that he did so only under duress, namely, threats of continued harassment. He also claims that the fax messages were word for word dictated to him by Mr Chan.

26.  In August 2013, there were internal discussions within HKL regarding the grant of formal licences to Mr Shum in respect of House No 11 (ie a portion of Lot 3906) and the carpark (ie Lots 3907 and 3908A). In an email dated 21 August 2013 from Matthew Chan to Bernadina Kwoh, HKL’s in-house legal counsel, he referred to a verbal agreement with Mr Shum to enter into two licence agreements. He asked Ms Kwoh to draft two licences to give effect to the verbal agreement. The drafts were duly prepared and went through several rounds of amendment. Eventually, the discussions did not result in any written agreement, primarily because (according to Matthew Chan) Mr Shum changed his mind.

27.  Following the breakdown in negotiations, nothing happened until February 2015 when Matthew Chan was dispatched to post further eviction notices on the Land. According to two manuscript notes made by Matthew Chan, he met Mr Shum on 12 and 13 February 2015 in the presence of the village representative or leader named Edwin Shum. Mr Shum was apparently upset by the public display of the eviction notices. He made thinly disguised threats of violence against Mr Chan’s person and asserted his right to claim adverse possession.

28.  On 6 May 2015, Corona received an inquiry from the Legal Aid Department regarding Mr Shum’s intended claim of adverse possession of the Land. On 2 June 2015 Corona commenced the present action for recovery of the Land.

ADVERSE POSSESSION: LEGAL PRINCIPLES

29.  At this juncture it may be useful to enumerate some general principles pertaining to the law of adverse possession. I propose to discuss the more detailed principles in the context of the specific factual issues identified in the following sections.

30.  By the combined effect of sections 7(2) and 38A of the Limitation Ordinance, Cap 347, the applicable limitation period for recovery of land is 20 years in respect of possession commencing before 1 July 1991. In respect of possession commencing after 1 July 1991, the relevant period is 12 years.

31.  The essential requirements of adverse possession are (a) factual possession with a sufficient degree of exclusive physical control, (b) an intention to possess and (c) that possession must be adverse: see Wong Tak Yue v Kung Kwok Wai (1997-1998) 1 HKCFAR 55, at 68E-69C; Birkenhead Properties and Investments Ltd v Lam Kai Man and ors, HCMP 1588 of 2012, unrep 12 January 2016, at [12].

32.  As to what constitutes factual possession, the following guidance can be gleaned from the authorities:-

(1)  The burden is on the squatter to prove uninterrupted possession for the requisite period. There is no presumption of continued possession in favour of a squatter even if adverse possession is established to have commenced: On Yip Property Development Co Ltd v Kwok Tai Kuen Alan, HCMP 3192 of 2013, unrep 15 April 2014, at [8].

(2)  Not every use or occupation of land can satisfy the requirement of exclusive possession. A classic way of establishing it is to have the land fenced off. In the absence of any physical barriers set up to exclude others from entering the land, the court must examine what steps were taken by the person claiming exclusive occupation to exclude others: Gotland Enterprises Ltd v Kwok Chi Yau, CACV 260 of 2014, unrep 19 January 2016, at [36] to [37].

(3)  The evidence required to establish adverse possession must be objective and compelling, although the standard or proof is still the normal civil standard, ie on a balance of probabilities: Birkenhead, sup cit, at [13].

33.  As to intention to possess (or animus possidendi):-

(1)  The intention must be subjectively held and objectively so manifested by the squatter. If the squatter’s 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: Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd, CACV 79 of 2008, unrep, 18 February 2009, at [32]-[33].

(2)  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 skepticism. 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: Wong Tak Yue, sup cit, at 69B-C.

(3)  It has been held that a squatter’s willingness to pay rent to the owners if they had requested payment was “plainly and completely inconsistent with the intention to possess”: ibid, at 69C-F.

34.  The adverse character of possession means that the possession by the squatter must be adverse against the title of the paper owner. Possession is never adverse if it is enjoyed under a lawful title or with the permission of the paper owner: Birkenhead, sup cit, at [12].

35.  Under section 23(1) 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 shall be deemed to have accrued on and not before the date of the acknowledgment.

36.  In section 24(1) and (2), the Ordinance goes on to stipulate certain formalities for such an acknowledgment to be effective. They are that the acknowledgment:-

(1)  must be in writing and signed by the maker;

(2)  may be made by the agent of the person by whom it is required to be made under section 23;

(3)  must be made to the person, or to an agent of the person, whose title or claim is being acknowledged.

37.  In the context of a tso (or tong), whenever a new member is born, a new equitable interest in the tso property is created. A new limitation period under ss 7(2) and 22 of the Limitation Ordinance would start to run and would not expire until six years after the member ceases to be an infant. Further, by virtue of s 10(2) the title of the trustees would be preserved so long as there is at least one beneficial owner whose right to recover the Land is not barred: Wong Shing Chau v To Kwok Keung [2008] 5 HKC 372, at [11].

FACTUAL POSSESSION

38.  With these principles in mind, I shall now examine critically Mr Shum's claim of factual possession. In so doing I will focus on objective evidence such as aerial photos and survey sheets extracted from the records of the Lands Department. I will also refer to the evidence given by the parties’ respective land surveying experts, including their Joint Expert Report dated 7 October 2020.

Lot 3906

39.  The earliest available aerial photo dated 17 February 1963 shows a house on Lot 3906. It also shows a footpath or track at the common boundary of Lots 3906 and 3907 running roughly from north to south where it became a flight of steps. The experts agree on the presence and location of these two features which are marked “H1” and “TR1” respectively in a to-scale drawing labelled Plan A annexed to their Joint Statement. A copy of Plan A is annexed to this judgment for ease of identification.

40.  The next available aerial photo is dated 29 October 1973. It reveals the addition of a new house (“H2”) to the immediate north of “H1”. There were also added a temporary structure “TS1” and a small shed (“the Shed”) that lay immediately to the north of “H2”. It should be noted that each of “TS1” and the Shed straddled Lot 3906 and Government land.

41.  The erection of “H2” between 1963 and 1973 is corroborated by, among other things, the MOT and an accompanying plan. The authenticity of both documents is not in doubt. The plan identifies in red a structure the subject-matter of the MOT. Its position corresponds to “H2” revealed in the 1973 aerial photo. In the same position is a new rectangular structure that appears in a survey sheet dated January 1973. Survey sheets dated April 2004 and thereafter mark this structure “11”, which I take (and the experts agree) to be No 11 Wah Mei Shan Tsuen.

42.  The experts observe and agree that according to aerial photos taken in 1976 and 1978, “H1” was replaced in two stages with some contraction in size. After 1978, there were no relevant changes to the condition of Lot 3906 until 1992.

43.  It may be recalled that Lot 3906 was sold on 28 August 1980 by the tong to an outsider. According to the case law cited above, the quasi-perpetual nature of beneficial interests in a tong is such that time practically does not run against the owners of tong land. As a result, and as Counsel for Mr Shum rightly concedes, in the present case the earliest date on which the limitation may begin to accrue (and adverse possession may be deemed to commence) is 28 August 1980.

44.  Whilst not strictly material to the issue under discussion, the experts also agree that in October 1992, the track “TR2” to the east of Lot 3906 was seen to have been widened and paved. It is however of relevance to note that on 29 May 1993, an extension to “H1” at the northeastern side was observed and remained in all the subsequent aerial photos.

45.  According to an aerial photo dated 7 November 1994, a fence (“F1”) can be observed on the western side, ie at the rear, of houses “H1” and “H2”. In an aerial photo taken on 9 February 1999, a retaining wall (“RW”) identified in recent site surveys is seen at the western side of “H2”.

46.  Between August 2000 and June 2001, H1, H2, T1 and the Shed received new roofs, but no other changes were seen. In a photo taken in early 2002 by LDS during their field survey, a tall fence is seen surrounding at least a canopied area of “TS1”. Besides, a wire fence is seen outside the door to “H2”.

47.  Several changes of significance appear in an aerial photo dated 3 July 2003. The most important and extensive changes, which will be further examined below, were those made to Lots 3907 and 3908A, including the construction of a carpark and the paving of a driveway leading to it. On Lot 3906, the experts observe extensions (ie canopy) to “H1” on the southern and southeastern sides. They also mark the erection of a new fence or hoarding (“HD1”) along the southeastern boundary of the Lot.

48.  During the period 2006 to 2007, the experts note the changes in the roofs of “TS1” and “H1”. One of the photos taken by LDS on 5 June 2012 shows a high metal fence close to the western side of “H1” as well as a gate on RD1 that was left open.

49.  In an aerial photo dated 18 September 2012, “H2” is seen to have acquired a new roof and an extension on the western side. In the nomenclature section of the Joint Statement, the experts agree that the extension is in fact a canopy, and is so labelled in Plan A.

50.  Other than Mr Shum’s oral evidence, it is fair to say that there is not a great deal of objective evidence to corroborate the alleged use and occupation of the structures on Lot 3906 by him and his family. In this regard, Mr Shum has adduced two letters recently issued by public utilities:-

(1)  CLP Power Hong Kong Ltd confirmed the existence of an electricity account in the name of Wong Ching Kiu, Mr Shum’s mother, from 1972 to 2004, and in his own name from 2004 onwards, in respect of No 11.

(2)  Similarly the Water Supplies Department confirmed the existence of a registered account in the name of Shum Tung Loi from 1990 to 2011, and in the name of Mr Shum from 2011 onwards. The court was also shown photos of the water meters themselves.

51.  In the agreed bundle of evidence, Mr Shum has included some undated family photos of himself, his brothers and other relatives. In those photos, Mr Shum appears to be no older than a child or a teenager. The photos were taken at or outside “H1” and “H2” which appear for all intents and purposes to be inhabited rural dwellings.

52.  There is also in evidence a letter from the Lands Department dated 14 June 2018 setting out the squatter control numbers borne by the three structures standing at House No 11 of Wa Mei Shan Tsuen. According to an official record registered on 24 November 1976, the structures included (i) a brick house of 16 x 17 x 11 ft for domestic use; (ii) a brick house of 16 x 6 x 9 ft for “shade”; and (iii) a tin or asbestos kitchen of 5 x 6 x 8 ft. The letter further states that Mr Shum’s personal particulars were entered on the squatter population on 5 October 1984.

53.  In two of the photos featuring a young Mr Shum, a series of numbers can be partially seen painted in red on the walls. The visible portions of the numbers appear to match the “S C nos” (squatter control numbers) mentioned in the Lands Department’s letter. One of those photos appears have been taken inside a dwelling house of a rustic character.

Lots 3907 and 3908A

54.  Lot 3907 and Lot 3908A are contiguous lots to the east of TR1. They will be discussed together. In 1963, the Lots were bounded (i) in the west by footpath “TR1”; (ii) in the north by a low wall, as well as another footpath “TR2”; (iii) in the east by a continuation of the same low wall; and (iv) in the south by row houses that straddle the boundary between the two Lots and adjoining Government Land as well as a number of other private lots. A patch of open land at the northern part of the two Lots is described by the experts as a “threshing ground”. According to Mr Shum this plot of land was used by his father and grandfather for cultivating crops.

55.  Between 1963 and 1996, a series of row houses were seen on 3908A. According to Mr Shum they were used as dwellings by members of his family until 1980 when his grandmother died. After that the houses were said to be used for storage. Contrary to Mr Shum’s assertion, the experts are in agreement that the row houses collapsed in the 1970s and were completely overgrown with vegetation by 1994.

56.  The experts also concur that, based on their reading of officially published records, fencing appeared at the earliest in 1994 on the northern and western boundaries of the Lots. Mr Shum relies heavily on photographs taken by LDS in 1993 and 2002 which indicated the existence of wire fencing. However it is fair to observe that the photographs do not indicate the full extent of enclosure. Moreover, as far as anyone can see, the fenced off area appeared to be decrepit, strewn with weed and debris, with no sign of cultivation or any other usage.

57.  In short, evidence of physical occupation and enclosure of the Lots between 1980 and 2003 is patchy, sporadic and far from compelling. I therefore reject Mr Shum’s case that there was any exclusive possession of the Lots with the requisite intention at any time from 1980 to 2003.

58.  While it is not disputed that in 2003 Mr Shum developed or converted the Lots into a commercial car park, the timing of the development or conversion is controversial. The timing is critical because the Writ was issued on 2 June 2015. Which side of 2 June 2003, ie the commencement of the 12-year limitation period, did the conversion fall on?

59.  Looking at the aerial snapshots, one is driven to infer, and the parties agree, that the car park was built sometime between 8 May 2002 (when the Lots were seen to be overgrown) and 3 July 2003 (when the Lots were seen to be concretised). In an internal email sent by Matthew Chan to Bernadina Kwoh dated 20 November 2013, he referred to an attached aerial photo and recorded that on 1 June 2003 “vegetation being removed”.

60.  As one might expect, Mr Shum took a number of measures with a view to enhancing security at the newly established car park:-

(1)  Having paved and widened the footpath “TR1” into a driveway, he caused a metal gate with a lock to be erected at Lot 3906 near “H2” in order to control access in and out of the car park.

(2)  According to an aerial photo dated 3 July 2003, a fence marked “F2” in Plan A was built or added on the northern boundary of the car park. In addition, a wall “W1” was erected at the eastern limit of the concrete platform.

(3)  Warning signs were prominently displayed at the car park itself and at the public road (falling on Government land) leading to the driveway “RD1”.

(4)  Mr Shum also installed a number of CCTV cameras outside his house and around the car park. (But as Mr Shum candidly informed the court, those cameras were not in fact functional but were dummies intended to ward off intruders.)

61.  Despite the security measures, it appears that surveyors and staff dispatched by HKL had no trouble gaining unimpeded access to the car park in 2012 and 2013. Mr Shum explained that he had unlocked the gate on a permanent basis several months after the car park business began in response to complaints by car park users. He also pointed out that all his customers were personally known to him and were long-term (as opposed to daily) users. However, the absence of any effective entry barrier means that any strangers or casual visitors would only encounter resistance if Mr Shum himself happened to be on site and spot their presence.

DISCUSSION AND ANALYSIS

62.  I will first examine Mr Shum’s claim in relation to Lot 3906. Mr Derek J Y Chan, counsel for Corona, justifiably attacked the paucity of evidence of use in relation to the structures “H1”, “H2”, “TS1” and the Shed. Since Mr Shum alleges that the structures have been used as a family residence since his grandfather’s time, one would naturally expect to see the usual “signs of life”, such as utility bills and official correspondence with the government, banks, schools and so on bearing the address. Yet none of this has been tendered in evidence.

63.  On the other hand, I cannot ignore the fact that the existence of the structures has been consistently acknowledged in official government records since 1963. These include aerial photographs, survey sheets, squatter control records, the MOT and the accompanying plan. The address of No 11 (which I take to be “H2”) had been used by Mr Shum as the official address of his lion dancing troupe since 1995. The structures were also observed by surveyors from LDS with some fencing in early 2002.

64.  Furthermore, unlike the row houses on Lots 3907 and 3908A, the structures on Lot 3906 had been periodically renovated and maintained until at least the time of the expert reports. This is clear from the changes to the rooftops observed in the aerial photos over the years. In addition, the photos of Mr Shum’s childhood and youth reveal a picture of an active family life centred in and around the houses. Since 1995, Mr Shum had used No 11 as a centre for his martial arts activities and official address, as well as a storage space, for his lion dancing troupe. Such use is also borne out by the testimony of Leung Chung Kwong.

65.  Moreover, Mr Shum’s claim of occupation is credibly corroborated by the testimony of his tenant, Kwok Ka Wai, who had lived next door at No 10B since 2000 up until the date of trial. Mr Chan is right to point out that Kwok’s recollection differed from that of Mr Shum on the issue of whether a formal tenancy agreement had been signed. The two witnesses also provided the court with different dates on which the tenancy was said to begin.

66.  Despite these discrepancies, I have no doubt that Mr Kwok was a straightforward and reliable witness on essential matters including the account of his and his father’s occupation of No 10B since 2000. Consequently, I find that throughout Mr Kwok’s tenancy at No 10B since 2000, Mr Shum (and Mr Shum’s father until his death) was his immediate neighbour. To the extent that Mr Kwok’s testimony differs from that of Mr Shum, I prefer the former. I need hardly add that occupation by a tenant of a squatter counts towards the latter’s period of adverse possession.

67.  For these reasons, I find that the structures in question on Lot 3906 have been used by Mr Shum and his family (and tenants) exclusively since at least 1980. The photographic evidence shows beyond doubt that the structures were actively used as enclosed domestic premises. If follows that the question of animus possidendi should prima facie be answered in his favour, subject to the issue of the MOT discussed below.

68.  However, Mr Shum also claims adverse possession of the open area of Lot 3906 outside the built structures. To this extent I must reject the claim simply because there is insufficient evidence of effective enclosure at any relevant point in time. As noted above, the hoarding “HD1” at the southeastern edge of Lot 3906 did not appear in any aerial photo until 3 July 2003. Moreover, neither the fence F1 (first seen in November 1994) nor the retaining wall “RW” (first seen in February 1999) was enough to seal off the structures from intruders at the western boundary of Lot 3906 at any given time.

69.  In closing submissions, Mr Wilfred Tsui, counsel for Mr Shum, made the point that the eastern walls of the structures “H2”, “H1” and “TS1” together formed a contiguous front effective to prevent access to the back of the houses by any trespasser. However, I agree with Mr Chan that there is no evidence that the northern side of “TS1” was completely sealed off at any time, or that the southern side of “H1” was effectively closed off before July 2003.

70.  Mr Tsui is no doubt correct in submitting that, according to the authorities, fencing is not a must in every case. However, other than fencing, the squatter must still somehow demarcate the boundary of his occupied territory and objectively manifest his intention to occupy the territory. In the case of Lot 3906, I am unable to see any evidence of such demarcation or manifestation beyond the presence of the structures themselves.

71.  I turn now to Lots 3907 and 3908A. Mr Shum testified that the Land was used at various times as a farm, storage space or family home. However, the experts agree and I find that in the 1970s the row houses became derelict. As shown by the photographic evidence, the low walls on the northern and eastern sides of the Lots were so low as to be useless as a barrier. Certainly, before 2003 there is no evidence to show that the area was completely enclosed or effectively guarded against intrusion by wire fencing or otherwise.

72.  The critical issue, as foreshadowed above, is the date when the Lots were converted into a commercial car park in 2003. I accept Corona’s submission that there is no sufficient, let alone compelling, evidence that this took place prior to 2 June 2003. In this regard, the aerial photo dated 1 June 2003 (highlighted in Matthew Chan’s email) on which Mr Tsui heavily relies is at best equivocal. The photo sheds no light on the physical condition of the Lots while the clearing work was being carried out. I do not know, for example, whether the Land was effectively cordoned off or whether any "No Entry” signs were put up.

73.  For completeness, I should also comment on the manner in which the car park was used to see if it supports the claim of uninterrupted possession for 12 years from 2003 to 2015. I have already detailed the security measures taken by Mr Shum since the construction of the car park. Do they suffice to exclude the world from the car park and manifest Mr Shum’s intention to do so?

74.  As one approaches the car park via the main road from the north, the first warning sign one would see was a large plastic signboard containing words in Chinese: “畫眉山村私家路” (“Wa Mei Shan Tsuen – Private Road”). The signboard, as seen during an inspection by the plaintiff’s expert in 2020, is situated on government land at some distance away from the segment of “RD1” which falls within Lot 3906. A casual visitor who is aware of the fact that he was travelling on government land would give no credence to the warning. Further, I do not see how such a visitor would relate the sign to an assertion of a squatter’s exclusive occupation of “RD1” or the car park itself.

75.  In this regard, Mr Chan reminded me that while the placing of a notice on land warning intruders to keep out sign may be evidence of an intention to appropriate the land, it is not conclusive unless it is actively policed or enforced: see Powell v Macfarlane (1977) 38 P&CR 452, at 478. In this case, there were no security guards, automatic barricades, or any kind of entry barrier to the car park ever since the metal gate was unlocked early on. It goes without saying that Mr Shum could not rely on dummy CCTV cameras to monitor incoming traffic.

76.  There were other, smaller signs posted around the car park and the residence. The signs contained the words: “本村已裝置24小時閉路電視監察” (“This village is under 24-hour CCTV surveillance.”) They did not say, as one might expect, “Private land. Keep off.” Ironically one of the signs situated inside the fenced area of the car park (that actually spills over to government land) clearly indicates the area was “Government land”. In my opinion, no reasonable outsider would infer from these indications an unequivocal intention by a squatter to exclude the world at large.

77.  As we saw above, in the aerial photo dated 3 July 2003, a new fence F2 was seen erected along the northern boundary of Lots 3907 and 3908A, but not on the road RD1 side. The fence “F3” at the southern boundary was added later, probably in 2004. There is no specific evidence as to when “F2”, “F3” and “W1” were built, in particular whether it was done on or before 2 June 2003. Nor did they form a complete enclosure around the claimed areas of occupation since (a) the metal gate was unlocked, and (b) RD1 and the western side of the carpark were wide open to visitors coming from the north and south of the Lots.

78.  In conclusion, the claim of exclusive physical possession fails in relation to Lots 3907 and 3908A for any period of time contended for by Mr Shum, whether before or after 2003. Further, I do not accept that any animus possidendi has been established for any requisite period of time.

THE MOT ISSUE

79.  As noted above, in 1971 Mr Shum’s mother, Wong Ching Kiu, applied for modification of the Crown Lease to enable her to erect and maintain a dwelling on Lot 3906. Based on the position on the map annexed to the MOT, I find that this is probably the house “H2” shown on Plan A.

80.  In the 1960s and 1970s the District Lands Office regularly issued modifications of tenancy (“MOTs” or “MOT permits”) in rural areas of the New Territories upon the consent of the registered owner. Such MOTs had the effect of relaxing the terms of the Crown Lease to permit houses to be built and maintained. Apparently such permission was more or less automatically renewed on an annual basis upon payment of a fee without further inquiry or reference to the landowner. This was so even if the original permittee had died.

81.  In the present case, the MOT was dated 15 October 1971 and signed by Madam Wong as “permitee”. The MOT appears to have been issued on the basis of a written application dated 22 April 1971 signed by Madam Wong. In addition, there is a letter of consent dated 9 June 1971 signed on behalf of the registered owner of Lot 3906 to indicate its consent to the proposed use, namely, the erection of a temporary structure. Madam Wong died in 1977.

82.  In March 1987, Shum Mui Sang (the village representative and a distant relative of Mr Shum) applied for the MOT to be transferred to Shum Ying Fong (沈英方), Mr Shum’s second brother on the ground that Mr Shum’s mother had passed away ten years earlier. On 2 April 1987, the District Lands Office rejected the application.

83.  Thereafter, and despite this, the District Lands Office continued to issue annual demand notes to the deceased Madam Wong until 2020. Pursuant to annual demand notes, Mr Shum and his family continued to pay the yearly “MOT fee” of $12 until December 2020 when the MOT was revoked. Each of those payments was meticulously entered into a logbook maintained by the District Lands Office.

84.  By a letter to Yung, Yu, Yuen & Co, solicitors for Corona, dated 25 March 2021, the District Lands Office replied that it had not received any applications from the former or current lot owners regarding the MOT. In August 2021, the District Lands Office posted a notice on Lot 3906 stating that the MOT was cancelled with immediate effect, citing the death of the permittee in 1977 and referring to the conditions of the MOT.

85.  In the agreed bundle of documents, there is a copy of a general demand note dated 17 December 2010 addressed to Wong Ping Kiu at No 11 Wah Mei Shan Tsuen. It refers to the MOT no. 37821 and demands an “MOT Fee” of $12 for the period of 12 months from 1 January 2011. Mr Shum informed the court that he settled the demand note in cash, as he had done every year for many years.

86.  On the face of it, payment of the demand notes would appear to be an acknowledgment by the payer of the title of the registered owner of the Land and of the consensual nature of the permittee’s occupation. In his supplemental witness statement Mr Shum suggested that he understood the MOT fee to be some kind of annual government tax for maintaining his family home.

87.  In cross-examination, Mr Shum denied any knowledge of the application for transfer of the MOT to his brother in 1987 mentioned above. He also insisted that at no time did he or his family seek the consent of the registered owner of Lot 3906 to use or occupy the Land.

88.  Relying on a series of local authorities, Mr Chan argues that the MOT and its annual renewal by Mr Shum’ family is fatal to his claim as far as the subject-matter of the MOT is concerned. I will now turn to those authorities.

89.  The leading case is Yu Kit Chiu v Chan Shek Woo, CACV 137/2010, unrep, 18 February 2011. In that case, the permittee signed on a standard form of an MOT on behalf of the registered owner. The Court of Appeal (Cheung JA, Yuen JA and Fung J agreeing) held that the permittee thus acknowledged the terms of the MOT, whether or not he actually read or understood them. He also acknowledged that he was taking possession on behalf of the registered owner, not to his exclusion. The effect of such acknowledgment continued as long as the permittee paid the annual permit fee, and was inconsistent with “an intention, in his own name and on his own behalf, to exclude the world at large, including the [owner] if he himself was not the possessor, so far as is reasonably practicable and so far as the processes of the law will allow”: see ibid, at [43], [44].

90.  In Lai Suk Yi v Hau Tse Hee [2018] HKCFI 1149, unrep, 30 May 2018, DHCJ Kenneth Kwok SC took the matter a step further. He considered the legal effect of annual maintenance of an MOT by the daughter of the permittee after the latter’s death. He was firmly of the opinion that her payment of fees as evidenced by receipted demand notes was a continuing recognition of the occupation/possession of the land with the consent of the paper owner. It made no difference that the original permittee did not sign the MOT on behalf of the registered owner: see ibid, at [65].

91.  On broadly similar facts in Lee Siu Fong v Wong Wan Leung, HCA 122/2012, unrep, 3 January 2017, Lok J came to the same conclusion. The learned Judge found that the plaintiff, after the death of his father, the original permittee, continued to pay the MOT fee from year to year. Citing Yu Kit Chiu, he held that payment of a licence issued in the name of another was tantamount to continuing recognition of possession by another and was therefore inconsistent with an intention to possess: ibid, at [65].

92.  In Fong Kam Mui v HSBC Private Trustee (Hong Kong) Ltd, [2019] HKCFI 630, unrep, 26 February 2019, the squatter claiming adverse possession was not a descendant of the original permittee. Rather, she was a de facto “transferee” of two MOTs who had “purchased” the right to occupy from the original permittees. Having reviewed the MOT cases, DHCJ Maurellét SC concluded that the authorities did not support the proposition that in every case where Y signs a MOT for and on behalf of X the paper owner, if Z renews and pays for the said MOT, then he would always be found to have lacked animus possidendi for that reason alone. On the facts, however, he held that the squatter, who paid for the transfer of the MOTs and renewed them annually, realised their importance as the foundation for her entitlement to stay on the land. She therefore failed to make it perfectly plain to the world at large that she had intended to exclude the owner as best she could: ibid, at [77], [78] and [117].

93.  In the present case, the MOT itself, together with the application form and the tong’s letter of consent, shows beyond doubt that the original occupation of the land by Wong Ching Kiu was pursuant to the owner’s licence. Furthermore, it is clear that the continual payment of annual the MOT fees after Madam Wong’s death in 1977 by Mr Shum and his family constitutes an acknowledgment that “H2” was maintained and occupied with the permission of the registered owner.

94.  On the evidence, Mr Shum clearly understood that the MOT was an important document in connection with his entitlement to occupy the structure, so much so that he had taken special care to keep it safe for so many years. In this regard, his private or subjective understanding of the legal meaning or effect of the MOT or the MOT fee is neither here nor there. What matters is that he must have made it perfectly plain to the world at large that he intended to exclude the paper owner as best he could: see Yu Kit Chiu, sup cit, at [43]. By paying the licence fee of $12 annually after his mother’s death, Mr Shum and his family outwardly manifested an intention to occupy “H2”, the subject-matter of the MOT, as licensees of the paper owner, not adversely against him.

95.  In closing submissions, Mr Tsui invited me to depart from or distinguish the authorities on several bases. First, Mr Tsui seized upon a discrepancy between the name of the registered owner recorded on the MOT and the name that appeared in the tong’s letter of consent. The former name was Shum Kung Wo, who was the manager of the tong at the time. The latter was signed by Shum Hip Wo, although another signature was added next to his name by Shum Yat Sang, who did not become the tong manager until 1980.

96.  As I understand his submission, Mr Tsui seeks to distinguish the present case from cases like Lee Siu Fong and Lai Suk Yi where, on the facts, the registered owner’s consent had in fact been sought and given. Here, however, he submits that there is no evidence of such consent since the letter of consent from the purported registered owner was signed by Shum Hip Wo, rather than the manager of the tong. There is no evidence as to who Shum Hip Wo was, or why he was called upon to sign the letter in place of Shum Kung Wo.

97.  I am unable to accept this submission. In the first place, the MOT is a formal and official document of long standing. For over 40 years it has been treated as a valid document and relied upon by everyone concerned including the government, Mr Shum’s mother, father and Mr Shum himself. Certainly the District Lands Office considered that the MOT had been valid until it was revoked in 2020.

98.  In my opinion, the alleged discrepancy or evidential gap is readily overcome by the presumption of regularity. In this case, the presumption applies to the steps leading to the issue of the MOT so that their due observance may be presumed in the absence of evidence to the contrary: see Nina Kung v Wang Din Shin (2005) 8 HKCFAR 387 at [201]. Here, the District Lands Office clearly accepted the letter as proof of the tong’s consent and issued the MOT in reliance on it. Without more, the discrepancy in the name alone cannot be regarded as evidence impugning the validity of the consent.

99.  Next, Mr Tsui contends that in none of the decided cases did the court consider the basic principle that a licence is personal privilege so it terminates on the death of the licensee. He submits that even if the MOT could be taken as an acknowledgment that Mr Shum’s family recognised the paper title owner and occupied Lot 3906 as licensees, any such recognition would have ceased when the licence expired on Madam Wong’s death in 1977. He further submits that, by the same token, the demand notes were issued by mistake and without any legal basis.

100.  In support of this contention, Mr Tsui refers to a statement in the House of Lords case of J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 444E, where Lord Browne-Wilkinson held that when a licence came to an end or was withdrawn, time could start to run against the owner if the licensee remained on the land without acknowledging the owner’s title.

101.  I also reject this second argument. I do not accept that the courts which have considered this issue overlooked the personal nature of licences. In fact, as duly noted by the court in Fong Kam Mui, one of the conditions contained in the standard form of an MOT was that the permit was not transferable. In any event, it is clear on the authorities that the intention to possess is a separate issue from the question of whether the paper owner gave his consent for the squatter’s occupation.

102.  There is a further point which might have been but was not taken by Mr Tsui. Can it be argued that since the tong sold (among other things) Lot 3906 in 1980, whatever consent that had been granted by it must have ceased after that, and that the new owner’s consent must be sought? As seen above, the District Lands Office has confirmed by its letter of 25 March 2021 that no application has been made by the current or any former registered owners in relation to the MOT.

103.  It is correct that none of the previous cases was concerned with a change of paper owner during the currency of an MOT. In the ultimate analysis, however, I do not think such a change affects the analysis so far as the squatter’s intention is concerned. This is because, as explained above, the objective manifestation of animus possidendi is a separate requirement from the absence of consent.

104.  Consequently, Mr Shum fails in proving that “H2” was possessed with the requisite intention at any time. In his closing submissions, Mr Chan urged me to go further and infer that Mr Shum’s parents had erected all structures on Lot 3906, not just “H2”, with the express consent of the tong. However I cannot find any evidence that might support such an extended inference.

THE ACKNOWLEGMENT ISSUE

105.  In light of the conclusion that I have reached above in relation to Lots 3907 and 3908A, it is not strictly necessary for me to go into the issue of the fax messages, in particular, whether they were extracted from Mr Shum by duress or coercion. However, since the matter was fully ventilated in cross-examination and in the submissions of counsel, I will briefly set out my findings below.

106.  As mentioned earlier, Mr Shum claims that from June to July 2013, his wife, Madam Chan, and their three-year-old son, received threatening calls from a gang of hooligans at their home. In the witness box, Madam Chan gave a dramatic account of the visits which allegedly took place in daytime while Mr Shum was away at work. Shouting obscenities and banging on their front door, the gangsters demanded that Mr Shum and his family should sign an agreement with the registered owner or else leave the Land (including the house they were residing in). They left a piece of paper with the phone number of a Mr Chan with whom Mr Shum should contact immediately.

107.  During this time, Madam Chan was staying at No 11 with her young son as visitors from Shanwei pending approval of their permanent residence status. They were terrified by the loud noise and swearing that went on outside the house. Madam Chan told the ruffians that Mr Shum was not at home. She tried to call Mr Shum but he was not available to answer the phone call. She was only able to inform Mr Shum about the incident when he came home after work. According to Mr Shum and Madam Chan, the visits continued for about two months on a weekly basis.

108.  What did Mr Shum do in response to such appalling acts of intimidation? First, according to his testimony under cross-examination, he continued to go to work every day as usual, leaving his young wife and son to fend for themselves. Secondly, he installed some (functioning) surveillance cameras at the entrance to the house connected to a TV monitor within the house. Thirdly, he decided not to call the police but instead to succumb to the hooligans’ demand two months after the visits began. So in the morning of 30 July 2013, he called “Mr Chan” (whom he understood to be a representative of the landowner) on the number that was written on the piece of paper left by the hooligans.

109.  During the phone call, so Mr Shum’s story goes, Mr Chan dictated the precise words that should be inscribed in a fax message to HKL, claiming that he needed such a written message to appease his superior. Mr Chan said that if Mr Shum wanted the acts of harassment to stop, Mr Shum must do as he was told. To avoid further trouble, Mr Shum obediently wrote down the message, word for word, with a pen in one hand and a mobile phone in the other, while at home. When he finished he travelled to a photo printing centre in Fanling where he sent the message on a borrowed fax machine.

110.  The fax message reads as follows:-

“本人沈日星，身份證C510855A是粉嶺畫眉山村原居民，本人代表本村村民想租用此地DD5139073908A地段作為方便本村村民停泊少量自用車輛。望有請貴公司見諒及同意商談。聯絡電話9842 6881。

簽名 [沈日星] 30.07.2013”

111.  When Mr Chan got the fax message he was not satisfied. He demanded that Mr Shum should put forward a written offer to rent the lots specifically at $5,000 per annum. Once again, Mr Shum claimed he had no choice but do as he was told. On the next day, 31 July 2013, he composed a further message in the following terms before transmitting it from a fax machine at a stationery store:-

“本人沈日星，身份證C510855A。本人代表本居民，希望貴公司將此地DD5139073908A地段租為本村每年$5,000 - 敬請見諒。聯絡電話9842 6881。

簽名 [沈日星] 31.07.2013”

112.  On the other hand, according to Matthew Chan, he had never sent any hooligans to intimidate Mr Shum or his family. In July 2013 he was only several months into his job at HKL. The subject Lots were only one of many residential projects that he was dealing with. He intimated to the court that he was sent to visit the subject Lots in July 2013 to post up eviction notices and to report on any signs of occupation. The notices were issued in relation to Lots 3907 and 3908A only, not Lot 3906. When asked why, Matthew Chan explained that HKL considered Lot 3906 was a more difficult case than Lots 3907 and 3908A from a legal point of view.

113.  Matthew Chan did not meet Mr Shum during his visits in July 2013. However, he noticed the presence of colourful flags hoisted around the car park and emblazoned with the words “洪拳沈日星”. He also saw a plaque above the front door to No 11 bearing the name of Mr Shum’s lion dancing troupe. These led him to suspect or believe that Shum Yat Sing was a martial arts master and that he was one of the occupiers of the Land.

114.  According to Matthew Chan, soon after his site visits, he got a call from Mr Shum who said he had seen the eviction notices and asked what he should do. Mr Chan told him that Lots 3907 and 3908A were owned by HKL and that he should respond with a message with an offer to rent or buy the car park space. He indicated that the message should certain essential pieces of information, namely, the lot numbers, his name, contact details, his signature, and an offer to rent the car parking space at a proposed yearly rent.

115.  When he received the first fax message, Matthew Chan noticed that it did not include a rental figure. He called Mr Shum and asked him to propose a figure so that he could present a complete report to his superior.

116.  After receiving the two faxes, Matthew Chan took instructions from his superior and continued to liaise with Mr Shum with a view to concluding a formal licence for house No 11 as well as the car parking lot. However, the negotiations between Matthew Chan and Mr Shum turned out to be fruitless.

117.  Despite the stark conflict of evidence, I have no hesitation in rejecting Mr Shum’s and Madam Chan’s colourful story. I fully accept Matthew Chan’s account of the events leading to the sending of Mr Shum’s fax messages in July 2013. Briefly, my reasons are as follows:-

(1)  I find Mr Shum’s response, or rather the lack of it, to the repeated visits by hooligans utterly incredible. Given the state of terror induced by the visits, as a husband and father of a young child, he would at least have alerted the authorities to ensure their personal security. Yet, Mr Shum chose not to do so because, according to him, he did not believe the police could stop the imminent threat to his family.

(2)  When asked why, as a kung fu master, he did not stay at home or ask one of his many students to guard the house in his absence, Mr Shum said he was too busy and did not want to bother other people, including the village leader who was elderly and unwell.

(3)  The alleged circumstances of the composition and transmission of the fax messages are too contrived to be true. On his own account, Mr Shum took many weeks to consider the hooligans’ demand before he meekly succumbed. He took time to pen two neatly written letters, in the comfort of his own home, travel to a stationery shop and dispatch two messages on two successive days, in the absence of any imminent danger of bodily harm.

(4)  Moreover, if Matthew Chan had been able to extract from Mr Shum an offer to rent Lots 3907 and 3908A by threats of violence, why did he not seek to coerce him into acknowledging Corona’s title over Lot 3906 as well? In this regard, Mr Shum clearly testified that the hooligans’ demand of eviction targeted not just the car park but the house where he and his family lived.

(5)  By the same token, it may be asked: why didn’t Matthew Chan simply coerce Mr Shum into signing a licence agreement for all the occupied Lots? Why did he choose such a clumsy and risky way as dictation over the phone? After all, the HKL staff performed a substantial amount of work preparing licence agreements for all the three Lots, including Lot 3906 which was considered a more difficult case. By August 2013, the drafts were in fact more or less ready to be signed. In spite of this, Matthew Chan had to make two personal visits to Mr Shum in February 2015 to try and persuade him to sign a tenancy or licence agreement, still to no avail.

(6)  The contemporaneous notes made by Matthew Chan of the final encounters between him and Mr Shum are extremely telling. During cross-examination no questions were put to him regarding the veracity or authenticity of his notes. They show that, far from being prone to intimidation, Mr Shum became verbally aggressive when he sensed that his right to possession was being challenged. Matthew Chan was so disturbed by the incident that he felt it necessary to enter a detailed note of it on the case file.

118.  For the avoidance of doubt, I have also considered the testimony of Bernardina Kwoh and Mr Ng Chin Wan, who became Matthew Chan’s superior in March 2014. However, neither witness was directly involved in dealing with Mr Shum at the relevant time. So I find their evidence to be of limited assistance only, save for certain contemporaneous communications and records disclosed by them.

119.  Having resolved the factual dispute in favour of Corona, I can now analyse the content of the fax messages. As I understand it, Corona’s submission on this issue is twofold. Its primary contention is that the faxes constituted a written acknowledgment of the owner’s title so as to stop the running of time against the owner under section 23 of the Limitation Ordinance. Alternatively, Corona argues that the fax messages disclosed an intention to pay rent if demanded which is incompatible with an intention to occupy the two Lots in question to the exclusion of the paper owner.

120.  I am readily prepared to accept Corona’s alternative argument. The faxes throw valuable light on Mr Shum’s state of mind at the time of writing and even before that. They clearly disclose Mr Shum’s willingness to pay rent to Corona which is totally inconsistent with an intention to possess. According to the Court of Final Appeal’s dicta in Wong Tak Yue, supra, I should give great weight to the squatter’s declaration against interest. By the same token, I can give little weight to Mr Shum’s self-serving words uttered to Matthew Chan when they met in February 2015 to the effect that he was entitled to claim adverse possession.

121.  However, I am not so sure about Corona’s primary contention. The faxes are not entirely clear as to the capacity in which Mr Shum sought to rent the car parking lot from Corona. In both fax messages, the content of which has been quoted above, Mr Shum purported to act on behalf of the villagers of Wa Mei Shan Tsuen rather than on his own behalf. I have some doubt whether the acknowledgment can be said to have been made by “the person in possession of the Land” as required by section 23(1) of the Ordinance.

122.  In short, I find that Mr Shum’s faxes of 30 and 31 July 2013 are fatal to a finding of the requisite animus possidendi in respect of the car parking lot (ie Lots 3907 and 3908A), even assuming his occupation commenced in June 2003. For this reason as well, the claim must fail.

CONCLUSION AND DISPOSITION

123.  I will now summarise my findings on the issue of adverse possession.

124.  In relation to Lot 3906:-

(1)  Mr Shum succeeds to the extent that Corona’s title to the areas occupied by “H1”, “TS1” and the Shed shown on Plan A is extinguished by reason of adverse possession for 20 years or more since 1980.

(2)  In relation to the area occupied by “H2”, Mr Shum has proved a 20-year period of physical possession from 1980 but fails to demonstrate an unequivocal intention to possess owing to the MOT issue.

(3)  In relation to all the areas of Lot 3906 surrounding the structures, there is insufficient evidence of exclusive possession for any continuous period of 12 or 20 years since 1980.

125.  In relation to Lots 3907 and 3908A, Mr Shum’s counterclaim fails entirely because:-

(1)  There is insufficient evidence of exclusive possession for any continuous period of 12 or 20 years since 1980.

(2)  His intention to possess is also negatived by his expressed willingness to pay rent to Corona as shown in his two fax messages in July 2013.

126.  Conversely, Corona’s claim for an order of possession of the Land is allowed except for the area occupied by “H1”, “TS1” and the Shed within Lot 3906 shown on Plan A.

127.  In the Statement of Claim Corona has sought damages to be assessed. I note that neither side has provided any evidence or submissions on the quantification of such damages. Nor have the parties sought directions for a split trial.

128.  In the circumstances I propose to award Corona damages by way of mesne profits to be assessed by a Master of the District Court. However, given the relatively low value of the land, and the expense of valuation evidence, I hope the parties will sensibly settle the issue of quantum without recourse to further proceedings.

129.  So far as costs are concerned, Corona has largely succeeded in its claims, whereas Mr Shum has achieved only a modicum of success on this Counterclaim. On a rough estimate, the area of success covers less than 10% of the disputed Land.

130.  I also bear in mind that Corona has wholly succeeded on two discrete factual issues (and the related legal issues) that have consumed most of the time at trial, namely, the MOT issue and the acknowledgment issue. On the latter issue, my rejection of Mr Shum’s serious allegation of duress necessarily and unfortunately means that he and his wife chose to concoct a story with a view to deceiving the court.

131.  Exercising a broad-brush approach, I will order, on a provisional basis, that Mr Shum should pay Corona 95% of its costs of the action, such costs to be taxed if not agreed, with a certificate for counsel. Any party who wishes to vary this order should do so by Summons within 14 days of the handing down of this Judgment, failing which the order will become final.

132.  I thank both Counsel for their assistance to the court in this matter.