CHU WAI MING SHAMAN v. TO SHUI LAM

DCCJ 2323/2016

[2018] HKDC 1463

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2323 OF 2016

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DECISION

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Introduction

1.  In this case, the plaintiff claims adverse possession of the land in Lot No 249 in Demarcation District 84, North, New Territories (“the Land”). 

The plaintiff’s pleaded case

2.  At all material times, the defendant is and was the registered owner of the Land.

3.  Since the end of the 1960s, the plaintiff’s family has been operating a farm on the Land and other neighbouring lots.  At the time, the Land and Lot 246 were both owned by the To family. 

4.  The plaintiff’s family rented the Land and Lot 246 from the To family for the purposes of the farm.  The To family was represented by a To Ying Tsau, to whom the rent was paid.

5.  There was fencing erected around the external perimeter of the farm.  The plaintiff’s family cultivated crops and vegetables on the Land and also erected fixed structures on the Land for storage and/or rearing livestock.

6.  In 1980, the plaintiff’s family orally agreed with To Ying Tsau for the sale and purchase of the Land and paid a sum of $34,840 towards the purchase.  It was decided that the Land would be held in the name of Ng Chi Moon, who was the son-in-law of the plaintiff’s paternal uncle. 

7.  On 12 September 1980, To Ying Tsau and Ng Chi Moon entered into a written conveyancing for the transaction. However, unbeknownst to the plaintiff’s family at the time, the written conveyance executed by the parties in fact referred to Lot 246 (not the Land). Nonetheless, the plaintiff’s family continued to occupy and use the Land without any interference from the To family, including the defendant.  They did so under the mistaken belief that they had purchased the Land in 1980.

8.  By a written Deed of Gift dated 18 May 2006, Lot 246 (which was thought to be the Land) was conveyed by Ng Chi Moon to the plaintiff and his mother.

9.  By a further written Deed of Gift dated 24 February 2012, Lot 246 (which was thought to be the Land) was conveyed into the sole name of the plaintiff. 

10.  In or around 2014, the plaintiff discovered for the first time that the description of “Lot 246” in the written conveyances and documents was in fact a reference to an adjoining piece of land rather than a reference to the Land itself.

11.  Since 1980, the Plaintiff’s family has not paid any rent with respect to the Land nor has there been any demand for rent from anyone. 

Service

12.  The plaintiff’s Writ of Summons indorsed with a Statement of Claim was issued on 17 May 2016.

13.  By Order of Master D Ho dated 6 March 2017, service of the Writ of Summons on the defendant was substituted by inserting an advertisement of a notice of this action once in Hong Kong Commercial Daily, a local Chinese newspaper published and widely circulated in Hong Kong.  It was further ordered that the time to file acknowledgment of service be within 14 days thereafter.  This Order was complied with on 21 March 2017.

14.  On 27 July 2018, the plaintiff issued the present summons for a default judgment pursuant to O 13 r 6 and O 19 r 7 of the Rules of the District Court. 

15.  By Order of Master Catherine Cheng dated 8 October 2018, service of the summons was substituted by inserting an advertisement of a notice of this application once in Hong Kong Commercial Daily.  This Order was complied with on 11 October 2018.

16.  Despite the above, the defendant has not filed or served a notice of intention to defend or any defence.  The defendant did not attend the hearing of the summons on 5 November 2018. 

Limitation Ordinance

17.  Section 7(2) of the Limitation Ordinance (Cap 347) (“LO”) provides:-

“No action shall be brought by any other person to recover any land after the expiration of 12 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…”

18.  By virtue of section 38A of the LO, the time for bringing an action to recover any land which accrued before 1 July 1991 shall, if it has not then already expired, expire at the time when it would have expired apart from the provisions of the Limitation (Amendment) Ordinance 1991.  The relevant limitation period was 20 years under section 7(2) of the Limitation Ordinance as enacted in 1965 (“LO 1965”).

19.  Section 17 of the LO provides:-

“Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

20.  Section 10 concerns land held on trust and it is irrelevant to this case.

21.  The plaintiff’s case is that the defendant’s right of action against the plaintiff’s family as squatters on the Land accrued on the date of the conveyance on 12 September 1980 (ie before 1 July 1991).  It follows that the applicable limitation period is 20 years pursuant to section 7(2) of the LO 1965.

Adverse possession

22.  The relevant principles concerning adverse possession are well established.

23.  A person claiming to be in adverse possession must be shown to have both factual possession and the requisite intention to possess: Wong Tak Yue v Kung Kwok Wai 1 HKCFAR 55 per Li CJ at 68E-69A.

24.  Factual possession signifies an appropriate degree of physical control.  It must be a single and conclusive possession.  The question as to 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: Powell v McFarlane 38 P&CR 452 per Slade J at 470-471; J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 per Lord Browne-Wilkson at §41.

25.  The question of intention to possess is one of fact which is dependent on an assessment of all the circumstances in a particular case.  This 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 is not himself the possessor, so far as it is reasonably practical and so far as the process of the law will allow: Wong Tak Yue (supra) at 68.

26.  If the person claiming to be in adverse possession believes, by mistake, that he owns the property, that would constitute the requisite intention: Jourdan and Radley-Gardner: Adverse Possession (2^nd ed, 2011), §§9-38 to 9-42.

27.  In Topwell Corp Ltd v Kwan Kam Kee [2014] 5 HKLRD 1, giving the judgment of the Court of Appeal, Kwan JA held at §24:-

“A squatter may still validly establish a claim of adverse possession even though he had acted in the honest but mistaken belief that the subject property was in fact his …”

28.  In Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464, Kwan JA held at §11:-

“Whether a person could establish factual possession and the requisite intention for the purpose of adverse possession is a question of fact depending on the circumstances of the case. There is no rule of law that these elements cannot be established for a person who mistakenly believes that he has good title or that he is a lawful tenant and does not realise he is trespassing on another’s land.”

29.  Similarly, in Pang Yiu Chor v Wong Wai Leung [2017] 4 HKLRD 761, Anthony Chan J applied a number of Hong Kong and English authorities and concluded that the Government had the requisite intention to possess due to its mistaken belief that it owned the land in question. 

Declaratory relief under RDC O 19 r 7

30.  O 19 r 7 of the Rules of the District Court provides that “…on the hearing of the application the Court shall give such judgment as the plaintiff appears entitled to on his statement of claim.”  Therefore, in considering an application under that rule, the court cannot receive any evidence thereunder, but must give judgment according to the pleadings alone: Hong Kong Civil Procedure 2019 Vol 1 §19/7/11.

31.  The court’s power to give judgment under this rule is not mandatory, but discretionary in nature.  As for the granting of declaratory relief, the normal practice of the court is that a declaration would not be made without a trial.  The nature of the practice has been explained by Millet J (as he then was) in Patten v Burke Publishing Co Ltd [1991] 2 All ER 821 at 823 as follows:-

“…the rule is a rule of practice only. It is not a rule of law. It is a salutary rule and should normally be followed, but it should be followed only where the claimant can obtain the fullest justice to which he is entitled without such a declaration.”

32.  Thus, this rule of practice would not be followed when the plaintiff had a genuine need for the declaratory relief and justice would not be done if such relief were denied: Hong Kong Civil Procedure 2019 Vol 1 §19/7/20.

Factual possession

33.  There are a few acts which by their nature constitute strong prima facie evidence of factual possession and requisite intention.  These acts include cultivation of land for crops (in the case of agricultural land) and erecting buildings on the land: Jourdan and Radley-Gardner: Adverse Possession (2^nd ed, 2011) at §§13-30, 13-49.

34.  In this case, the Land is situated within an agricultural area in the New Territories.  The pleaded use of the Land by the plaintiff’s family for cultivating crops and rearing livestock on the Land is consistent with the manner in which land of this nature is commonly used or enjoyed.

35.  It has been pleaded that the plaintiff’s family has erected fencing and fixed structures for storage and/or rearing livestock on the Land.  This appears to accord with the aerial photos annexed to the Statement of Claim, which show that substantial building structures have been built on the Land over time between 1973 and 2014.

36.  Based on the Statement of Claim and its annexures, the plaintiff has made out a case that he has had factual possession of the Land for a period of more than 20 years prior to the commencement of this action. 

Requisite intention

37.  With regard to intention, the cases mentioned above have established that a mistaken belief on the part of the squatter that he was the legal owner would constitute the requisite intention.  Although it has been pleaded that the plaintiff had used the Land under the mistaken belief that his family had purchased the Land back in 1980, it would not be right for the court to hastily conclude that the plaintiff has shown the requisite intention.  After all, the court is being asked to declare possessory title of land without trial and the result will have substantial implications to the rights of the parties.  In considering the alleged mistaken belief, I need to consider whether the belief was reasonably held and whether there are any matters which may cast doubt on the existence of such belief.

38.  I note from the Statement of Claim that the plaintiff’s family had also rented Lot 246 from the To family. However, it is unclear whether, after the intended purchase of the Land, the plaintiff’s family had continued to use and pay rent in respect of Lot 246.   If the answer is in the affirmative, it would support the plaintiff’s case that his family had genuinely believed that they had purchased the Land and not Lot 246.  On the other hand, if the plaintiff’s family had continued to use Lot 246 but ceased to pay rent for their use, it may suggest that Lot 246 was mutually intended to be the subject land in the transaction.  In that case, there was no mistake in the written conveyance, there was no basis for the plaintiff’s mistaken belief and the plaintiff could not have had the requisite intention based on such mistaken belief.  

39.  At the hearing, counsel for the plaintiff told the court that the sale and purchase between the To family and the plaintiff’s family in 1980 not only covered the Land but also Lot 246.  In other words, the plaintiff’s family were supposed to have bought both the Land and Lot 246 but the written conveyance had omitted the Land and only referred to Lot 246.  Hence, the plaintiff’s family had all along used the Land and Lot 246 under the mistaken belief that Mr Ng Chi Moon had successfully purchased the same and since then no rent was ever paid to the To family for the use of the two pieces of land.

40.  The plaintiff’s position as revealed at the hearing is materially different from what is pleaded in the Statement of Claim.   In the pleading, the plaintiff appears to suggest that the plaintiff’s family intended to purchase only the Land and the lot number in the written conveyance was misstated as Lot 246 (i.e. the reference to Lot 246 was a mistake).  In contrast, what was disclosed to the court at the hearing was that the written conveyance, which was intended to convey both the Land and Lot 246, had omitted to include the Land (i.e. the mistake was the omission of the Land, not the reference to Lot 246).   There was no explanation as to why there was such a discrepancy.

41.  The information disclosed at the hearing seems to address the concern relating to the existence of the mistaken belief and the requisite intention (as discussed in paragraph 38 above). However, in this type of applications the court cannot receive any evidence (let alone information coming from the bar table) and the plaintiff cannot supplement its case with such additional information.  

42.  Moreover, in view of the apparent inconsistencies in the plaintiff’s position, it would not be appropriate for the court to exercise its discretion in favour of granting relief based on a pleading that may not fully reflect the plaintiff’s position.

43.  In view of the foregoing discussion, I decline to grant the declaratory relief sought by the plaintiff. The plaintiff’s summons is dismissed with no order as to costs.