SARAH SALLY CHAN-KENT (Executrix of the estate of RUBY JIM SUNYOU alias RUBY KANG YOU JIM (NEE) WONG, deceased) v. CHIM SAU CHING AND ANOTHER

CACV 40/2020

[2021] HKCA 648

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 40 OF 2020

(ON APPEAL FROM HCA NO 2369 OF 2015)

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J U D G M E N T

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Hon G Lam J (giving the Judgment of the Court):

Introduction

1.  This appeal concerns the entitlement to a piece of land in Shatin known as Section A of Lot No 1517 in Demarcation District 281 (“Land”), on which there now stand two conjoined small two‑storey houses with the respective addresses of No 6 and No 6A Chap Wai Kon (Old) Village (插桅杆舊村) (“House 6” and “House 6A”).  The plaintiff, as executrix of her deceased mother’s estate, is the registered owner of the Land and brought the action below to recover possession from the 1^st defendant who was in occupation of the Land.  The 2^nd defendants were named as all persons in occupation of the Land, but the action was contested only between the plaintiff and the 1^st defendant.  The 1^st defendant raised the defence of adverse possession, proprietary estoppel and an equitable principle on imperfect gifts,[1] and counterclaimed for declarations that she had acquired possessory title to the Land and that the plaintiff’s title had been extinguished.  Deputy High Court Judge Paul Lam SC, after trial, dismissed the plaintiff’s action and made declarations in favour of the 1^st defendant based on adverse possession.  The plaintiff now appeals against his judgment[2] (“Judgment”) to this court, contending that judgment should be given in her favour or that there should be a re‑trial.

Background

2.  In so far as relevant, we set out the facts and the findings made by the judge below.

The relations between various persons

3.  The story starts with Chim Kwok Fan (詹國勳).  He was an indigenous villager of the Chap Wai Kon Village in Shatin, born in 1901.  He emigrated to Canada when he was about 17 years old.  He and his first wife had a son born of their marriage called Jim Ping Kwan (詹炳坤) also known as Ben Jim (“Ben”), and an adopted son called Chim Yick Ling (詹奕麟). 

4.  Ben lived in Canada and died in 1985.  While it appears he had descendants, there is no evidence about them.

5.  Chim Yick Ling originally lived in Hong Kong. He and his wife Cheung Koon Tai (張觀娣) had a son called Chim Kim Hee (詹金喜).  Chim Yick Ling emigrated to England in 1933 leaving his wife in Hong Kong, had another family there, and died in the late 1980s.  Cheung Koon Tai continued to live on the Land in Hong Kong until she died on 16 August 1998 at the age of 82.

6.  Chim Kim Hee and his wife, Law Ying Fung, had four children born between 1956 and 1969, the third of whom is the 1^st defendant in the action and the respondent in this appeal, Chim Sau Ching (詹秀清).

7.  In 1955, apparently after his first wife had died, Chim Kwok Fan married his second wife, Ruby Sun You Jim (“Ruby”) in Canada.  They had five children, namely, Susan, Gordon, Dennis, Lilly, and Sarah.  Sarah, as executrix of Ruby’s estate, is the plaintiff in the action below and the appellant here.  Gordon’s wife is Pei Qining (“Pei”).  Chim Kwok Fan and Ruby continued to live in Canada with their family until they passed away.  Chim Kwok Fan died on 27 March 1981.  Ruby died on 20 January 1997. 

The occupation of the land

8.  The Land had for a long time been inhabited by members of the Chim family.  Chim Kwok Fan succeeded to the Land as a gift in 1948, but even before that, Chim Yick Ling, and his wife Cheung Koon Tai after their marriage in about 1931, had been living there.  While Chim Yick Ling went to England not long after his marriage and thereafter only returned to Hong Kong occasionally, Cheung Koon Tai continued to live on the Land.[3]

9.  Originally there was only one house on the Land.  It was not clear exactly when it was converted into two houses, or when they became known as House 6 and House 6A respectively.  The judge thought it likely that the house was converted into two only in about 1976 or 1977.[4]

10.  The 1^st defendant’s father, Chim Kim Hee, also lived on the Land after he was born in 1936.  After he married Law Ying Fung in 1954, she lived there with him.  Chim Kim Hee moved to England in around 1959, but his wife and their children continued to live on the Land until they all went to England successively between 1971 and 1975, leaving Cheung Koon Tai as the only inhabitant on the Land.[5]  She was however joined by the 1^st defendant who returned to live in Hong Kong in 1988. Since then, Cheung Koon Tai and the 1^st defendant had been the only two persons who lived on the Land.

Events in the 1970s

11.  In about 1969‑70, during a trip to Hong Kong, Chim Kwok Fan told Tsim Tim Shau (詹添秀), a fellow villager of Chap Wai Kon Village (who later became the head of the village for 8 years until 2019), that he intended to give the Land to his two sons, Chim Yick Ling and Ben; however, as he needed to return to Canada, he would deal with it the next time he came to Hong Kong. The judge thought it was inherently likely that Chim Kwok Fan would consider it more appropriate to leave the house - his ancestral home - to his two sons under his first marriage.[6]

12.  In 1977, Chim Kwok Fan returned to Hong Kong for over five months between 3 May and 14 October.  During his stay in Hong Kong, he arranged for extensive renovation and refurbishment works to be done to the two houses, which cost him HK$111,500.  The judge considered that Chim Kwok Fan did this as part of his plan to give the Land to Chim Yick Ling and Ben.  He wished to put the houses in good condition before giving them to his two sons.[7]

13.  In addition, during his stay in Hong Kong, on 4 October 1977, Chim Kwok Fan executed a power of attorney, in a standard form known as N.T.A. 55 (Revised) (“1977 POA”), appointing Cheung Koon Tai as his attorney and authorising her to do all acts set out therein and to execute all necessary documents for a period of three years from 4 October 1977 to 3 October 1980 in relation to the Land.  Cheung Koon Tai put a cross mark as her specimen signature on the 1977 POA.  At the same time, Chim Kwok Fan also signed a “Letter of Confirmation” confirming that he, by executing the 1977 POA, was “fully aware that sale may be executed in respect of the [Land]”.  The documents were executed in the District Office and witnessed by an Assistant Land Officer, New Territories.  Stamp duty was paid and a memorial of the 1977 POA was registered in the New Territories Administration on the same day.[8] 

14.  In about 1977, Chim Yick Ling, who was in England, told Tsim Tim Shau that Chim Kwok Fan was returning to Hong Kong to deal with matters concerning the transfer of the Land but as Chim Yick Ling could not return to Hong Kong at the same time, Chim Kwok Fan executed a power of attorney in favour of Cheung Koon Tai.[9]

15.  The judge noted that Chim Kwok Fan could not simply execute a deed of gift as a memorial for a deed of gift would have to be signed by the parties and attested by a witness.  The judge found that, as Cheung Koon Tai was aware, the purpose of the 1977 POA was to enable Chim Kwok Fan’s attorney, namely Cheung Koon Tai, to execute documents to assign the Land to his two sons both of whom were not in Hong Kong at the time.  In 1978, Cheung Koon Tai told Tsim Tim Shau that Chim Kwok Fan had already authorised her to deal with the transfer of the Land.[10]

16.  Chim Kwok Fan made his last will on 30 March 1978, leaving the whole of his estate to Ruby.  The judge took the view that Chim Kwok Fan left little to Chim Yick Ling and Ben by his will because he considered that he had already given them the ancestral home, ie the Land.[11]

17.  Cheung Koon Tai did not exercise the power under the 1977 POA, which lapsed on 3 October 1980.  Chim Kwok Fan died suddenly of a heart attack on 27 March 1981.  Probate of his Hong Kong estate, covering his interests in the Land and numerous other lots in the New Territories, was granted to Ruby on 28 January 1991.  By an assent dated 20 January 1993, she personally became the legal and beneficial owner of the Land.

Events from Chim Kwok Fan’s death to 1994

18.  On 16 February 1982, while in London, Chim Yick Ling executed a general power of attorney appointing his wife, Cheung Koon Tai, as his attorney with full power to act on his behalf in relation to his application to the District Officer, Shatin for succession to the estate left by Chim Kwok Fan in accordance with section 7 of the Power of Attorney Ordinance 1972 (“1982 POA”).  Various pieces of land, including DD 281 Lot No 1517A.H. (a clerical error for 1517A, the Land), were listed in the schedule to the 1982 POA.  Chim Yick Ling signed as the “registered owner”, showing that he believed he was entitled to succeed to the Land. 

19.  In 1985, Ruby came to Hong Kong with Gordon and visited the Land and met Cheung Koon Tai.  The judge rejected the plaintiff’s contention that during that meeting Ruby granted an express or implied licence to Cheung Koon Tai to stay on the Land.[12]

20.  In 1986, Chim Yick Ling came back to Hong Kong for a few months and gave Cheung Koon Tai the 1982 POA.  Cheung Koon Tai however never exercised the power under this power of attorney.

21.  The 1^st defendant returned to Hong Kong in 1988 and began to live on the Land again, together with her grandmother, Cheung Koon Tai.

22.  Gordon came to Hong Kong and visited the Land in 1992 and met the 1^st defendant.  He said that on that occasion the 1^st defendant asked him for permission to do some work on House 6A, but the judge did not accept this evidence.[13]

23.  Gordon and Pei came to Hong Kong again and visited the Land in 1994.  Whether Gordon and Pei spoke to the 1^st defendant on this occasion was disputed and unresolved, but nothing turns on this.[14]

24.  The plaintiff said she travelled to Hong Kong and visited the Land in the autumn of 1994/95, and that during a meeting with Cheung Koon Tai and the 1^st defendant, when the plaintiff told Cheung Koon Tai she was there only to see the Land and was not going to ask her to leave, Cheung Koon Tai looked relieved.  The judge did not accept that the plaintiff visited the Land in 1994/95 or that there was the alleged conversation.[15]

The 1994 forms relating to rates

25.  Both Houses 6 and 6A were previously located within a designated village area exempt from assessment to rates under the Rating Ordinance.  Following re‑designation, however, they would become liable to assessment from 1 August 1994.  On about 12 September 1994, Chim Kim Hee completed a government form (Requisition for Particulars of Tenements) for each of the two houses.  In respect of House 6, he stated that it was first occupied on 6 August 1880; it was wholly occupied by the owner; and it was used by the descendants for self‑occupation.  He signed the form as both “owner” and “agent for owner”. In respect of House 6A, he also stated that the house was first occupied in 1880 and was used as a residence, and again signed as both “owner” and “agent for owner”.  At the same time, Chim Kim Hee also put in an application for rates exemption for each house.  In the form for House 6, he filled in both Part 3 (which should only be completed if he was the occupier or the owner) and Part 4 (which should only be completed if he was an agent of the owner or the occupier).  In Part 3, he stated that he was an indigenous villager of Chap Wai Kon Old Village.  In Part 4, a fellow villager certified that the applicant was an indigenous villager and that the relationship of the two persons mentioned above was uncle and nephew, but it is unclear which two persons were being referred to.  In the form for House 6A, he stated he was the agent of the owner or occupier, but in the place for the owner’s or occupier’s name, he put down his own name and then described the relationship as uncle and nephew.  The judge thought that the forms should be explained on the basis that Chim Kim Hee regarded himself as the owner of House 6 (as he was the son of Chim Yick Ling who had passed away by then) and the agent of his uncle, Ben, whom he regarded to be the owner of House 6A.[16]

26.  House 6 was granted exemption from rates from 1 August 1994, but the application for House 6A was not processed as insufficient information had been provided.  Hence, rates became payable in respect of House 6A after 1 August 1994.[17]  Government rent also became payable for both houses from 28 June 1997.[18]

Ruby’s death and Cheung Koon Tai’s death

27.  After Ruby’s death on 20 January 1997, the plaintiff as sole executrix obtained probate of her estate in Canada on 2 May 1997, but did not obtain probate in Hong Kong until 2015.[19]  The Hong Kong grant covers the Land and her interests in two other lots in the New Territories that are not relevant for present purposes.  Ruby’s five children were the beneficiaries of her estate.

28.  Cheung Koon Tai died on 16 August 1998, having moved to a nursing home a few months before her death.[20]

29.  In November 1998, Gordon and Dennis came to Hong Kong and visited the Land.  They met the 1^st defendant during this trip.  The judge did not accept Gordon’s evidence that before the trip, the plaintiff had asked him to bring a document for the 1^st defendant to sign to confirm that her use of the Land was with the consent of their family, but in any event Gordon’s evidence was that he forgot to do it.[21]

Rates and Government rents

30.  Since no one had paid rates and Government rents for the two houses, the Government brought several claims in the Small Claims Tribunal against Ruby as registered owner for the outstanding amounts, and obtained five judgments between November 2002 and August 2004 (which gave rise to a charging order made on 28 February 2005 in DCMP 4369/2004 covering a total sum of HK$40,323.50 together with interest and costs) and seven judgements between April 2003 and May 2007 (which gave rise to a charging order made on 2 June 2008 in DCMP 404/2008 covering a total sum of HK$26,382.40 together with interest and costs).[22]

31.  The second charging order (in DCMP 404/2008) came to the 1^st defendant’s notice shortly after it was made.  She noted that it was a court document addressed to Ruby but did not know what it was about.  She called Gordon’s number in Canada but Dennis answered the call.  The 1^st defendant told him that she had received a court document addressed to Ruby concerning rates and Government rents, and queried why there was such a document.  Gordon had little idea what she was talking about, and asked her to fax the document to him.  Dennis accepted that the 1^st defendant did not ask him to pay anything during that conversation.  The 1^st defendant later faxed a one‑page court document to Dennis, likely to be the first page of the charging order.[23] 

32.  On behalf of Ruby, Dennis contacted the Department of Justice and the Rating and Valuation Department.  He and his siblings then made various payments.  As a result, the charging order in DCMP 404/2008 was discharged on 3 April 2009.  They also found out about the charging order in DCMP 4369/2004. There appeared to be some confusion leading to correspondence between Dennis and the Government authorities in 2010 and 2011.  The charging order in DCMP 4369/2004 was only discharged on 26 January 2016 after the commencement of the action below.[24]

33.  The 1^st defendant did not know Dennis and his siblings had settled the outstanding amounts.  Not too long after the conversation with Dennis in 2008, she caused the accounting information for payment of rates and Government rents for the two houses to be changed so that she became the “registered payer”, intending to assume the obligation to pay rates and Government rents personally.[25] 

Events after 2010

34.  On 15 October 2011, the plaintiff visited the Land and met the 1^st defendant as well as her mother, Law Ying Fung, who was on visit from London.  The plaintiff only took some pictures of House 6 and did not raise any question about the Land with the 1^st defendant.[26]

35.  In 2013, the 1^st defendant carried out substantial renovation and refurbishment works on House 6A, costing her a total sum of HK$550,000, with a view to renting it out.  At the same time, she arranged for the installation of separate water and electricity meters for House 6A.  The 1^st defendant also changed the registered name for the meters in House 6 to herself though it was not clear when she did that.  All utility charges for House 6 and House 6A over the years were paid by Cheung Koon Tai and the 1^st defendant.  After the renovations, the 1^st defendant rented out the ground floor and the first floor of House 6A to two different tenants.[27] 

36.  The plaintiff, through her solicitors, issued a demand letter on 7 August 2014 to the 1^st defendant, asking for possession of the Land.  The plaintiff obtained probate of Ruby’s estate in Hong Kong on 24 March 2015, and commenced the action below on 13 October 2015.

The parties’ cases and the judge’s findings on possession

37.  On the question of possession of the Land, the judge found as follows.  Up to the death of Chim Kwok Fan on 27 March 1981, Cheung Koon Tai was living on the Land as his licensee,[28] but the licence was automatically terminated on Chim Kwok Fan’s death.[29]  Thereafter, Cheung Koon Tai and, after 1988, she and the 1^st defendant together, had factual possession of the Land, believing that it was owned by Chim Yick Ling (in respect of House 6) and Ben (in respect of House 6A), and that they had the right to stay there as the wife and granddaughter of Chim Yick Ling responsible for taking care of the Land.  Cheung Koon Tai had either forgotten or failed to appreciate that the legal formalities for transferring the Land had not been completed.  When Cheung Koon Tai was living on the Land alone until 1988, she was in possession of the Land in her own capacity and also vicariously on behalf of Chim Yick Ling and Ben, whom she believed to be the owners.  After the 1^st defendant returned, she and Cheung Koon Tai were in possession of the Land in their own capacity and also vicariously on behalf of Chim Yick Ling and Ben.[30]

38.  After Chim Yick Ling died in the late 1980s, up to Ruby’s death in 1997, Cheung Koon Tai and the 1^st defendant continued to be in possession of both houses.  Chim Kim Hee, Cheung Koon Tai and the 1^st defendant believed (mistakenly) that Chim Kim Hee had become the owner of House 6, and that House 6A was owned by Ben and by his descendants upon his death.[31]

39.  After Cheung Koon Tai moved to a nursing home shortly before her death in August 1998, the 1^st defendant was in possession of the Land in her own capacity and also vicariously on behalf of Chim Kim Hee and Ben’s descendants.[32]

40.  By around 2013 at the latest, the 1^st defendant’s intention with regard to House 6A had changed to an intention to possess it by herself to the exclusion of Ben’s descendants.  She therefore ceased to be in possession of it both for herself and on behalf of Ben’s descendants, and instead began to be in sole possession of it by herself.[33]

41.  After Chim Kim Hee’s death on 21 September 2017, the 1^st defendant was in possession of House 6 for herself.

42.  The judge rejected the plaintiff’s specific contentions that Ruby granted a licence to Cheung Koon Tai when Ruby visited the Land in 1985,[34] or that the plaintiff granted a licence to Cheung Koon Tai during a visit to Hong Kong in 1994/95,[35] or that the 1^st defendant had acknowledged the legal owner’s title by asking Gordon for permission to renovate House 6A in 1992 or asking the plaintiff’s siblings to pay the outstanding rates and Government rents in 2008.[36]  The judge also rejected the plaintiff’s case that there were implied licenses granted by the legal owner for Cheung Koon Tai and the 1^st defendant to remain on the Land.

43.  At the end, the judge summarised his findings by stating that since 27 March 1981 (the death of Chim Kwok Fan), the Land had been in adverse possession by various persons who enjoyed factual possession coupled with the intention to possess as follows:[37]

“ (a) In respect of House 6, it was in the possession of [Cheung Koon Tai] in her personal capacity and vicariously for [Chim Yick Ling]. After [the 1^st defendant] returned in 1988, they were in their joint possession in their personal capacities and also vicariously for [Chim Yick Ling]. After [Chim Yick Ling] died in the late 1980s, they were in joint possession in their personal capacities and also vicariously for [Chim Kim Hee]. After [Cheung Koon Tai] died on 16 August 1998, it was in the possession of Ching in her personal capacity and vicariously for [Cheung Koon Tai]. And after the death of [Cheung Koon Tai] on 21 September 2017, it has been in the sole possession of [the 1^st defendant].

(b)   In respect of House 6A, it was in the possession of [Cheung Koon Tai] in her personal capacity and vicariously for Ben initially and after his death on 12 May 1985, his descendants.  After [the 1^st defendant] returned in 1988, it was in the joint possession of [Cheung Koon Tai] and [the 1^st defendant] in their personal capacities and also vicariously for Ben’s descendants.  After [Cheung Koon Tai] died on 16 August 1998, it was in the possession of [the 1^st defendant] in her personal capacity and vicariously for Ben’s descendants.  And, by the latest, since around 2013, it has been in the sole possession of [the 1^st defendant].”

44.  The judge concluded that time had started to run from 27 March 1981 and the limitation period of 20 years, applicable to a cause of action accruing at that time, had expired on 26 March 2001. The title of the legal owner had been extinguished.  The 1^st defendant had acquired possessory title to the Land.

45.  In respect of the 1^st defendant’s case of proprietary estoppel, the judge found that Chim Kwok Fan had made a representation or given an assurance that the Land would be assigned to Chim Yick Ling and Ben.  He was not however satisfied that the 1^st defendant had acted to her detriment in reliance on such representation or assurance.[38]  For various reasons which were set out in the Judgment, the judge was also not satisfied that the principle propounded in Pennington v Waine availed the 1^st defendant.[39]

The appeal

46.  The plaintiff has raised seven grounds of appeal, which we shall deal with in turn below.  The 1^st defendant has filed a respondent’s notice seeking to uphold the Judgment on an additional ground, which we mention in §57 below.

Ground 1

47.  By the first ground, the plaintiff complains that the judge reached a conclusion that was contrary to the 1^st defendant’s own pleaded case.  Essentially what the 1^st defendant had pleaded in her Re‑Amended Defence and Counterclaim was that:

(1) From around 4 October 1977 (the date of the 1977 POA) onwards, Chim Yick Ling, Cheung Koon Tai and Ben “took the Land as belonging jointly to themselves and their respective families (including Chim Kim Hee and [the 1^st defendant]), and intended to exclude the world at large”.[40]

(2) From the late 1980s or 1990s onwards (after Cheung Koon Tai learnt that Ben had died), Chim Yick Ling and Cheung Koon Tai took the Land “as belonging jointly to themselves, their children and grandchildren (including Chim Kim Hee and [the 1^st defendant])”.[41]

(3) The 1^st defendant had since coming of age taken the Land as the ancestral home (祖屋) for her family.  Since around 1987, the 1^st defendant had taken the Land as belonging jointly to Ben, her grandparents (ie Chim Yick Ling and Cheung Koon Tai) and their children and grandchildren (including Chim Kim Hee and herself).  Since being told about Ben’s death after the 1^st defendant returned to Hong Kong in 1988, she had taken the Land as belonging to “her grandparents and her immediate family (including her father, Chim Kim Hee, and herself)”.  After being told by Cheung Koon Tai in early 1998 that the 1^st defendant was the only family member left in Hong Kong and the ancestral home was hers, the 1^st defendant took the Land as belonging to herself.[42]

48.  The plaintiff contends that the 1^st defendant’s pleaded case is one of joint possession of the entire Land, but that instead of considering whether the evidence supports that case, the judge made findings on bases different from the 1^st defendant’s pleaded case and, in particular, found that the 1^st defendant was in “vicarious possession” for different people in respect of Houses 6 and 6A separately. Mr Shum, who appears for the plaintiff in this appeal (but not below), emphasises that the 1^st defendant’s pleading was that Chim Yick Ling, Cheung Koon Tai and Ben “jointly” possessed the Land for themselves and their respective families, and that joint possession is different from vicarious possession.  It is submitted that therefore the judge erred in law in making the findings he did.  Reliance is placed on Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663 at §21 and Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd & others [1994] 2 HKC 264 at 269F‑270C on the functions and centrality of pleadings in civil litigation.

49.  No one denies the importance of pleadings generally or in the present case.  But it is important to view the pleadings in context and as a whole.  It was clearly the 1^st defendant’s case that only Cheung Koon Tai and the 1^st defendant were in occupation of the Land at the material times.  Thus it was pleaded that Chim Yick Ling and Cheung Koon Tai had lived on the Land since 1931, but Chim Yick Ling later went to London, and Ben was also overseas.  Chim Kim Hee had lived on the Land since his birth but had also gone abroad in around 1959.[43]  The 1^st defendant had also lived on the Land since her birth until 1973 when she went abroad for her studies, but she returned to live with Cheung Koon Tai on the Land in about 1988.  In other words, by 1977, only Cheung Koon Tai was in occupation of the Land, and from 1988 onwards only she and the 1^st defendant were in occupation.  The judge’s finding that the two of them were in joint possession of the two houses is wholly consistent with this.

50.  It is true that the word “vicariously” was not used in the pleading.  It was, however, squarely the 1^st defendant’s case that Cheung Koon Tai and the 1^st defendant were in possession and took the Land as the ancestral home belonging to (ie owned by) Chim Yick Ling, Cheung Koon Tai and Ben and their respective families including the 1^st defendant.  This is entirely consistent with a finding that Cheung Koon Tai and the 1^st defendant were in possession not only in their own right but also in right of the families of Chim Yick Ling and Ben. 

51.  The plaintiff read the 1^st defendant’s pleaded case as saying that Chim Yick Ling and Ben (prior to his death in 1985) were also in possession of the Land.  Since they were (as pleaded) living abroad at the material times, it is difficult to see how they could have had possession, on the 1^st defendant’s case, other than through Cheung Koon Tai and/or the 1^st defendant.  As stated in Jourdan, Adverse Possession (2^nd ed) at §7‑103, a person who is not in occupation of land may be in possession of it if the person with effective occupation or control exercises it on his behalf.  In Bannerman Town, Millars and John Millars Eleuthera Association v Eleuthera Properties Ltd [2018] UKPC 27 it was stated at §54:[44]

“ Possession may be vicarious in the sense that A may occupy land on behalf of B, such that B rather than A is in possession of it … Vicarious possession may arise where, for example, A is the licensee, agent or agricultural contractor of B. …”

An averment that Chim Yick Ling and Ben were in possession of the Land even though, on the pleading, Cheung Koon Tai and/or the 1^st defendant were the only persons in occupation of it at the time, obviously means that Chim Yick Ling and Ben were in possession through Cheung Koon Tai and/or the 1^st defendant.

52.  For these reasons it seems to us that the judge’s findings of vicarious possession simply expressed in legal terms the case pleaded by the 1^st defendant.  There is no substance in the plaintiff’s complaint in this regard.

53.  There is another point raised by the plaintiff under this ground, which is that the 1^st defendant’s pleaded case was directed to the Land as a whole, whereas the judge in his findings differentiated between House 6 and House 6A.  In our view, this complaint is also unmeritorious.  It was common ground that there were two houses on the Land; the only dispute at trial was when the original single house was converted into two houses.  It is true that the 1^st defendant’s pleading referred mostly to the “entirety of the Land”, and that the judge eventually found there was vicarious possession of House 6 for Chim Yick Ling and Chim Kim Hee between 1977 and 2017, and vicarious possession of House 6A for Ben and his descendants between 1977 and (at the latest) 2013.  There is no substance in the objection, however, because it is in our view not impermissible for the court to find that there was possession by or on behalf of a person of a smaller part within a larger area pleaded, provided there is an appropriate and logical basis, rooted in the evidence, for the approach adopted and no unfairness or prejudice has been occasioned to any party: c.f. Lau Wing Hong & others v Wong Wor Hung & another [2006] 4 HKLRD 671 at §145.

54.  As far as the evidence is concerned, the 1^st defendant’s evidence was that it was Chim Kwok Fan’s idea to partition the original house into two, in order to gift one unit to Chim Yick Ling and the other to Ben, that Cheung Koon Tai partitioned the house accordingly,[45] and that Chim Kim Hee’s understanding was that House 6A belonged to Ben.[46]  There were also the government forms relating to rates for the two houses separately filled in by Chim Kim Hee in 1994, which in the judge’s view showed that Chim Kim Hee regarded himself as the owner of House 6 and as the agent of his uncle, Ben, whom he regarded to be the owner of House 6A.[47]  We consider that there was a proper evidential basis on which the judge was entitled to come to the conclusion he did.

55.  The plaintiff has not been able to point to any prejudice in this regard or any difference in the way in which she might have conducted her case had the 1^st defendant specifically pleaded an alternative case of possession of House 6 for the benefit of Chim Yick Ling’s branch of the family and possession of House 6A for the benefit of Ben’s branch respectively.  The legal effect on the plaintiff’s title would be the same, so long as the Land had been in adverse possession by occupiers (whether solely, jointly, or vicariously) successively without interruption for a sufficiently long period of time.[48] Further, we note that the plaintiff herself differentiated between the two houses in her pleadings.  She contended that over the years, House 6 was occupied by Cheung Koon Tai alone, while House 6A was vacant,[49] and that accordingly “House 6A or half of the Land” had not been in the possession of Cheung Koon Tai or her family members or agents including Chim Kim Hee and the 1^st defendant at all.[50] 

56.  For these reasons we also reject the plaintiff’s complaint in relation to the areas vicariously possessed.

57.  The 1^st defendant has by a respondent’s notice put forward the alternative finding that after learning of Ben’s death in the late 1980s or early 1990s, Cheung Koon Tai and the 1^st defendant had possessed House 6A for the benefit of Chim Yick Ling, Cheung Koon Tai and the 1^st defendant’s immediate family members.  In the light of our conclusion on Ground 1 it is unnecessary to deal with this contention.

Ground 2

58.  The second ground of appeal complains that the judge allowed the 1^st defendant to run on the one hand a case of adverse possession and, on the other, the alternative cases based on proprietary estoppel and incomplete gift.  The plaintiff’s argument is that adverse possession depends on possession without the consent of the owner, hence possession “as of wrong”, whereas the alternative cases are by their very nature contrary to and defeat the primary case of adverse possession.  Further, it is said that the 1^st defendant’s intention to possess based on the alternative cases must destroy her claim that she had the requisite intention for adverse possession.

59.  This ground has been advanced on a high level of generality, and can be seen to lack substance when the 1^st defendant’s alternative cases are examined more closely.  Possession is not adverse when it is taken by agreement or consent, for example as tenant or licensee.  But both alternative cases were based on a communicated intention to gift the Land to Chim Yick Ling and Ben, leading to a belief on the part of Chim Yick Ling and Cheung Koon Tai and their descendants including the 1^st defendant that the Land thereafter belonged to Chim Yick Ling and Ben.  A belief by a possessor of land that he is its owner, even if mistaken, is sufficient for the purposes of intention to possess: Bannerman Town, Millars and John Millars Eleuthera Association v Eleuthera Properties Ltd [2018] UKPC 27 at §51; Roberts v Swangrove Estates Ltd [2008] Ch 439, §87.  As such, even on the alternative cases, their possession was not by consent of the registered owner but was adverse to his title.  In other words, the right of action to recover the land had accrued to the registered owner and time started to run against him.

60.  The plaintiff’s further argument that the evidence adduced by the 1^st defendant on her alternative cases destroys her case of adverse possession has not been elaborated with reference to the specific parts of the evidence that have the alleged effect.  We are unable to accept this contention.  The alternative cases did not involve any contention that those who occupied the Land had done so pursuant to Chim Kwok Fan’s consent in the nature of a licence.

Ground 3

61.  The third ground of appeal criticises the Judge for making the finding that Cheung Koon Tai and the 1^st defendant believed that the Land already belonged to Chim Yick Ling and Ben without the requisite formalities having been completed.[51] It is submitted that the finding was based on speculation, was unsupported by evidence, and was contrary to the 1^st defendant’s pleaded case and evidence.

62.  The first point to note is that, as Ms Lau for the 1^st defendant points out, the judge’s finding was not one made purely on the basis of inference as the plaintiff contends.  There was evidence from Tsim Tim Shau that Chim Kwok Fan had told him in about 1969‑70 of his intention to give the Land to Chim Yick Ling and Ben,[52] and that Chim Yick Ling had told him (Tsim Tim Shau) in about 1977 that Chim Kwok Fan was returning to Hong Kong to deal with matters concerning the transfer of the Land but as Chim Yick Ling could not return to Hong Kong at the same time, Chim Kwok Fan executed a power of attorney in favour of Cheung Koon Tai.[53]  The plaintiff’s submission that there was no evidence of any intention of Chim Kwok Fan to give the Land to Chim Yick Ling and Ben is factually wrong.  The judge’s finding of fact is not one based purely on inference. 

63.  It follows that the plaintiff is required to discharge the heavy burden of demonstrating that the judge’s finding is plainly wrong before this court will interfere with it: Pang Ketian Sally v Tam Yuk Hung Annie (CACV 147/2013, 25 April 2014), §§31-32; Ageas Insurance Company (Asia) Ltd v Lam Hau Wah Inneo (CACV 65/2014, 9 January 2015), §§29‑30.  If the judge’s conclusion is not shown to be plainly wrong, the Court of Appeal is not entitled to intervene even if it has doubts as to the correctness of that finding: Ting Kwok Leung v Tam Dick Yuen & others (2002) 5 HKCFAR 336, §42.  In his argument Mr Shum takes four specific points with regard to the evidence but we do not think that they meet this high hurdle. 

64.  The first two points taken both allege that the judge’s findings involve speculations and that the particular fact being dealt with was capable of a different, perhaps even better, explanation.  But both points suffer, in our view, from the same flaw.  It may be that a certain piece of evidence, taken on its own, is susceptible to differing explanations, and does not therefore point in any particular direction.  The fact‑finding exercise is however not to be performed by examining each piece of evidence in isolation.  The task of the trial judge is to evaluate the evidence as a whole, having due regard to such inherent probabilities as may appear, and make his findings accordingly, based, in a civil case, on the balance of probabilities. It is not a valid ground for challenging a finding on appeal simply to say that a particular piece of fact relied upon by the judge is equivocal when, viewed as part of the entire body of evidence, it is open to the judge to conclude that it sheds light on the proper conclusions.

65.  It was a fact that the last Will of Chim Kwok Fan left everything to his wife Ruby, but stipulated that if she predeceased him or did not survive him by more than 30 days, his estate was to be distributed by paying CAD 1,000 to each of Chim Yick Ling and Ben, with the residue distributed to his five children with Ruby.  The judge took the view that Chim Kwok Fan “left nothing or very little to CYL and Ben because he had already given the Land ie the ancestral home to them; and hence, he would leave all his other properties to his wife and children of his second family in Canada”.[54]  Mr Shum takes issue with the judge’s view and submits that Chim Kwok Fan would have been advised by his Canadian lawyer who prepared the Will that the Land would form part of his estate if not assigned to Chim Yick Ling and Ben before his death, and that the judge failed to consider the inherent improbability of Chim Kwok Fan having intended to give the Land to them, given that his Will did not seek to devise the Land to them in the event it had not been assigned to them before his death.  It is said that the judge based his reasons on speculations.

66.  We reject this submission.  The Will cannot be looked at in isolation but must be viewed in the context of the other evidence.  It was made on 30 March 1978, less than half a year after the 1977 POA was executed with a validity of three years.  Chim Kwok Fan had no reason to think that the 1977 POA would not be exercised within that time. The suggestion that Chim Kwok Fan would have been advised by his Canadian lawyer about the status of the Land seems to us speculative and far-fetched. The judge also took account of Tsim Tim Shau’s evidence, the customary practice of indigenous villagers on the preservation of their ancestral home and the purpose of Chim Kwok Fan’s trip to Hong Kong in 1977.  In our judgment he was quite entitled to take into account the provisions of the Will relating to Chim Yick Ling and Ben as part of the evidential substratum on which to make findings on the intention of Chim Kwok Fan.

67.  Next, it is said that the judge speculated in finding that the reason for Cheung Koon Tai not to have assigned the Land to Chim Yick Ling and Ben pursuant to the 1977 POA was that they did not return to Hong Kong during its validity[55] and Cheung Koon Tai had forgotten or failed to appreciate that the formalities had not been completed.[56]  Mr Shum submits that a better reason was that it was Chim Kwok Fan’s intention not to assign the Land or he had changed his mind.  We reject this submission.  Again, the evidence has to be examined as a whole.  There was evidence from Tsim Tim Shau that Chim Kwok Fan intended to give the Land to Chim Yick Ling and Ben and that he executed the 1977 POA for the purpose of the transfer.  If he had changed his mind, one could have expected him to revoke the 1977 POA and have the revocation registered or at least communicated to the others.  But this would be inconsistent with the understanding evinced by the 1982 POA and the forms relating to rates and Government rent completed by Chim Kim Hee in 1994.  The judge’s finding, based on his view of the evidence overall, cannot be said to be plainly wrong.

68.  Mr Shum’s third and fourth points refer to certain evidence which, he submits, is inconsistent with the judge’s findings. Thus he submits that the judge was wrong to say that there was no evidence the Government intended to resume the Land at the time,[57] pointing to Tsim Tim Shau’s evidence that resumption of land was common and ongoing in Chap Wai Kon Village and its vicinity in the 1970s.  As Ms Lau submits, however, the judge actually referred to Tsim Tim Shau’s evidence in this regard,[58] which did not show there were any attempts by the Government to resume the Land.  Furthermore, the judge gave other compelling reasons why he rejected the plaintiff’s submission that the 1977 POA had been executed solely to deal with resumption of the Land, including the wide powers conferred by the 1977 POA on Cheung Koon Tai and the fact that Chim Kwok Fan spent very substantial sums on renovating the two houses in 1977 just before executing the 1977 POA.

69.  Fourthly, Mr Shum submits that the 1982 POA executed by Chim Yick Ling, which did not mention Ben, contradicted the 1^st defendant’s case that the Land was believed to belong jointly to Ben, Chim Yick Ling and Cheung Koon Tai and their children and grandchildren.  The judge was speculating in saying “it was possible that CYL believed that, in administering the estate of CKF, CKT as [his] attorney would procure the assignment of one half of the Land to Ben”.[59]  Instead, it is submitted that the judge should have inferred that Chim Yick Ling knew, and so did Cheung Koon Tai and the 1^st defendant, that the Land had not been assigned to Chim Yick Ling or Ben.  The judge noted that the 1982 POA did not mention Ben, but again it is not the only piece of evidence.  There was also evidence that Chim Kim Hee believed House 6 belonged to his father’s (Chim Yick Ling) side of the family whereas House 6A belonged to Ben’s side of the family.[60] In our view it was open to the judge to find, for the reason he gave, that the 1982 POA was not inconsistent with Chim Yick Ling’s and Cheung Koon Tai’s belief that it was Chim Kwok Fan’s intention to give the Land to Chim Yick Ling and Ben.

70.  For these reasons we find no merit in Ground 3.

Ground 4

71.  Ground 4 concerns the rates and Government rents for the Land.  The plaintiff contends that the judge failed to draw proper inferences from the facts that (a) the 1^st defendant had not paid rates for House 6A since 1994 (House 6 was exempt from rates) and Government rents for both houses since 1997, and (b) the 1^st defendant called Dennis in Canada in 2008 and sent him a fax after receiving a charging order in respect of outstanding rates and Government rents.  It is said that the judge’s conclusion that these facts did not negate the 1^st defendant’s intention to possess and did not constitute an acknowledgment of the plaintiff’s title was perverse.

72.  The issue concerns the state of mind of the 1^st defendant, who gave evidence and was subjected to “long and vigourous cross examination”.[61]  Her evidence was that from time to time she had received letters from the Government addressed to Ruby but she usually ignored and discarded them.  She recalled opening a few and found that they concerned outstanding rates and Government rents, but thought that the sums mentioned were too substantial to be correct (because her parents and grandparents used to have to pay only a matter of cents for Government rent and indigenous villagers need not pay rates).  As she was busy, she did not follow up the matter.  Eventually the charging order in DCMP 404/2008 came to her notice shortly after it was made.  She noticed it was a court document addressed to Ruby but did not know what it was about.  She called Gordon’s number but spoke to Dennis and told him she had received a court document addressed to Ruby concerning rates and Government rents and queried why there was such a document.  It is common ground that she did not ask Dennis to pay anything.  At Dennis’s request, she later faxed probably the front page of the charging order to him.[62]

73.  The judge said he was “not too impressed” by the 1^st defendant’s explanation that she was too busy because of her work,[63] but did not adversely comment on or reject the other parts of her evidence in this regard.  He considered it important that she had never asked Ruby or any of her children to pay the rates and Government rents, and that soon after the incident in 2008, she procured the accounting information to be changed so that she herself became the registered payer of rates and Government rents for the two houses.  Mr Shum submits that the 1^st defendant must have understood the meaning and significance of the court documents, but this was not accepted by the judge.  Nor do we think it can be said that an ordinary lay person must necessarily understand the meaning and effect of a charging order.  The reason given by the 1^st defendant for approaching Gordon or Dennis upon receiving the 2008 charging order was that it was a court document addressed to Ruby, which is consistent with the fact that she did not ask them to pay anything to the Government.  A possible inference is that she regarded Ruby’s children as the proper persons to deal with a court document addressed to Ruby.  We do not agree with Mr Shum’s submission that the only reasonable inference is that she regarded Ruby or her children as the true owners of the Land who were liable to pay rates and Government rents.

74.  On the basis of the 1^st defendant’s evidence, which he received at first-hand, the judge was in our view entitled to conclude that her failure to pay rates and Government rents prior to 2008 and her contact with Dennis in 2008 did not negate her intention to possess and did not amount to an acknowledgment of Ruby’s title.  His conclusions cannot be characterised as “perverse”.

Ground 5

75.  Ground 5 concerns the plaintiff’s case that a licence had been given for Cheung Koon Tai and the 1^st defendant to occupy the Land or that the 1^st defendant had acknowledged the owner’s title.  In particular, the plaintiff submits that the judge should have found that (a) during her visit in 1985, Ruby gave an express licence for Cheung Koon Tai to stay on the Land; (b) the 1^st defendant asked Gordon, during his visit in 1992, for permission to renovate House 6A; and (c) during her visit in 1994/95, the plaintiff told Cheung Koon Tai that she had come only to see the Land and was not going to ask Cheung Koon Tai to leave.  It is said that the judge rejected the plaintiff’s evidence having erroneously found that Cheung Koon Tai and the 1^st defendant believed the Land belonged to Chim Yick Ling and Ben.

76.  These are again primary factual findings that the judge made after hearing the relevant witnesses.  Gordon gave evidence relating to his visit with Ruby in 1985 and his visit in 1992, and the plaintiff gave evidence on her own visit in 1994/95.  The judge did not simply reject their evidence based on his finding on Cheung Koon Tai’s belief, but took into account other matters as well:

(a) In relation to the 1985 visit, Gordon did not testify that Ruby expressly granted permission for Cheung Koon Tai to stay, but that Ruby told him after the visit that she would allow Cheung Koon Tai to stay. The judge considered that the whole visit was short, lasting only 15 to 20 minutes, and that it would be extremely odd for Ruby to have told Cheung Koon Tai expressly she could stay on the Land during that brief conversation.[64]

(b) As to the 1992 visit by Gordon, there was the 1^st defendant’s adamant evidence that she had not asked Gordon for permission to renovate House 6A. The judge also placed weight on the fact that there was no evidence of any follow‑up on that alleged permission.[65]

(c) In relation to the 1994/95 visit by the plaintiff, the judge took into account the 1^st defendant’s evidence that she had not met the plaintiff before 2011, that there was no clear evidence that the plaintiff came to Hong Kong at that time, and that there was no evidence that the plaintiff had been asked or authorised by Ruby to say anything about granting a licence or permission for Cheung Koon Tai to stay on the Land.[66]

77.  In our view it is clear that the plaintiff has fallen far short of being able to say that the judge’s conclusions on these visits were plainly wrong.

Grounds 6 and 7

78.  These two grounds may be taken together.  The plaintiff submits that the judge was wrong to treat (a) the visit by Gordon and Pei to the Land in 1994, and (b) the visit by Gordon, Pei and Dennis in November 1998, as immaterial.  It is submitted that these visits were conduct relevant to whether an implied licence had been granted.  Further, relying on Tang Tak Sum v Tang Kai Fong [2015] 1 HKLRD 286 at §39, it is said that the judge failed to consider that the “slightest acts” of the owner would disrupt continuous possession of a squatter even if those visits did not amount to a grant of licence.  It is said that Ruby’s visit and her children’s visits to the Land constituted use of the Land by the owner or her agents, negativing the squatter’s factual possession of the Land.

79.  The plaintiff does not dispute the judge’s understanding of the law that to establish an implied licence, it is necessary to point to some fact probative of such licence having been granted; and that mere acquiescence on the owner’s part is not enough; there must be some overt acts referable to a licence having been granted.[67]  Given the judge’s finding, which is not challenged on this appeal, that Cheung Koon Tai and the 1^st defendant had allowed Ruby and her children to come on to the Land during the visits in question simply because Ruby and her children were their close relatives (via Chim Kwok Fan) and the Land was Chim Kwok Fan’s ancestral home,[68] the judge cannot be faulted for concluding that no relevant licence could be implied from such visits.  There were no overt acts that tend to imply the grant of a licence.

80.  Nor do these visits in our view amount to acts by the owner interrupting Cheung Koon Tai’s and the 1^st defendant’s possession.  In Powell v McFarlane (1979) 38 P & CR 452, 472, it was stated:

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

81.  This passage was applied by the Court of Appeal in Tang Tak Sum, a case concerning an adverse possession claim by one co‑owner against another, in the context of criticising the failure of the court below to take account of the latter co‑owner’s acts of visiting and parking his car on the land without payment as acts negativing actual ouster or dispossession by the former co‑owner.  We do not think Tang Tak Sum is authority for the proposition, as Mr Shum appears to advance, that the slightest acts of the owner of whatever nature having something to do with the land will interrupt the possession of a squatter.  In a case between the owner and a mere squatter, the principle is that for the owner’s acts to have such effect, ordinarily one must find that he took possession in the ordinary sense of that word, to the exclusion of the squatter: Kan Yau Shan & another v Mo Yiu Mut & others [2018] HKCA 80, §4.14.

82.  In any event, the point is of no consequence on the facts of this case, for even if adverse possession was interrupted by the visits in 1985, 1994 and 1998 (without giving rise to any licence for the 1^st defendant’s future occupation), it resumed thereafter.  A cause of action accruing after June 1991 would be barred after the expiry of 12 years: see sections 7(2) and 38A(1) of the Limitation Ordinance (Cap 347).  The plaintiff’s action, brought only in 2015, would be out of time even on this basis.

Conclusion

83.  For the above reasons, the appeal is dismissed. There will be an order for the plaintiff to pay the 1^st defendant’s costs of the appeal, to be taxed if not agreed, with a certificate for two counsel.