TO WAI SING v. TO HUNG TAI AND ANOTHER

CACV 48/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 48 OF 2014

(ON AN INTENDED APPEAL FROM HCMP 533 OF 2011)

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Hon Cheung JA :

The 1^st defendant’s appeal

1.  The plaintiff succeeded in his action before Anthony Chan J against the 1^st defendant to recover possession of the land known as Lot 631 in Demarcation District No. 130, Tuen Mun, New Territories, Hong Kong (‘the Land’).  The 1^st defendant failed in his counterclaim for adverse possession of the Land.  The 1^st defendant now appeals.

The plaintiff’s case

2.1   The Land belonged to the plaintiff’s family from at least 1960.  They lived in the vicinity of the Land.  In 1974, the plaintiff’s father, To Tim-fuk, became the registered owner of the Land.  On 23 September 1982 he assigned the Land to his wife, i.e. the plaintiff’s mother by way of gift.  At that time, the plaintiff was still an infant. 

2.2   When the plaintiff reached 18 years of age, his mother assigned the Land by way of gift to him on 19 June 1992.

2.3   According to the evidence of the plaintiff’s mother, in 1974, after her husband became the registered owner of the Land, he granted a licence to the 1^st defendant’s father, To Chau Shun, to use the Land.  Her husband and the 1^st defendant’s father were distant relatives with the same surname.

2.4   On the Land was a structure (‘the structure’) which was used as a storage for keeping tools and pig feed.  The structure was in fact one of the two pigsties which the Government had given approval to build on the Land and the adjoining government land in 1962.  At that time, the plaintiff’s grandmother was rearing pigs there.  The pig rearing activities ceased in 1973.

2.5   The 1^st defendant’s father passed away in 1988.  In 1992, after the plaintiff became the owner, he applied to build a village house on the Land, but he was also about to go to New Zealand for his studies.  In that year, he granted another licence to the 1^st defendant to occupy the Land. 

2.6   The plaintiff left for New Zealand shortly afterwards and his mother looked after the Land for him.

2.7   In May 1997, the plaintiff’s mother asked the 1^st defendant to return the Land because of the plaintiff’s plan to build the village house. But the 1^st defendant merely asked her to sell the Land to him which she refused.  Later she continued to ask the 1^st defendant to return the Land but the 1^st defendant did not respond.

2.8   The plaintiff’s father died in 1998 and the plaintiff’s mother temporarily stopped her pursuit to build the village house.

2.9   In October 2001, the plaintiff’s mother sent out a notice in the name of the plaintiff to the 1^st defendant to remove unauthorised structures on the Land and return the Land to the plaintiff. At that time she noticed holes were dug on the Land to install septic tanks. The 1^st defendant did not respond to the notice.

2.10   In 2002, the plaintiff visited the 1^st defendant to demand the return of the Land.  He was met by the 1^st defendant’s brother who refused the demand.

2.11   In 2008, the 1^st defendant put up a fence between the Land and the adjoining government land.  Previously there was no fence there.

2.12   In March 2011, the plaintiff commenced the action.

The defence

3.1   The 1^st defendant claimed that his family has been in exclusive possession of the Land since 1945.  The Land is adjacent to their own land in Lot 625 RP.  The family has always treated the Land as part of their own land.  Ms Emma Wong, counsel for the 1^st defendant, however, accepted at the trial below that there was insufficient evidence to show that the occupation of the Land had started before 1959.

3.2   The 1^st defendant moved into the structure in 1972.  It has an area of 160 sq ft with a porch made of metal sheets at the entrance to the structure.  It has no toilet and kitchen.  The 1^st defendant was married in November 1981 and he has been using the structure as his matrimonial home together with his wife and son.  They used the kitchen in his father’s three storey village house built on Lot 625 RP and they used a toilet built on the Land. 

3.3   The 1^st defendant said he has been paying the government permit fees for the structure and also utility charges in respect of the use of the structure.  The Land and Lot 625 RP are enclosed by walls and wired fence. 

3.4   In 2008 the plaintiff came to the Land and cut the fence and the police were called. 

3.5   The 1^st defendant claimed that the plaintiff’s title to the Land has been extinguished by sections 7 and 17 of the Limitation Ordinance (Cap 347).  The 1^st defendant claimed that he and his predecessor-in-title had been in adverse possession of the Land for 20 years or more before the plaintiff’s action.

The Judge’s finding

4.  The Judge rejected the 1^st defendant’s claim that he has been in exclusive possession of the structure and the Land. He found that the plaintiff’s father had indeed granted a licence to the 1^st defendant’s father to use the Land in 1974.  However the Judge did not accept that the plaintiff had granted a licence to the 1^st defendant in 1992.  Although the Judge did not expressly hold that the 1^st defendant had resided in the structure from 1972, he held that if he had done so, such occupation would have ceased in 1982.  In that year the 1^st defendant’s family moved into the three storey village house built on Lot 625 RP.  The 1^st defendant was given the second floor (‘the flat’) and has been living there while his two brothers were given the other floors.  The 1^st defendant only revealed the existence of their own village house and his occupation there when he was questioned by the Judge.  This is what the Judge said :

‘ 87. According to D1, House A [i.e. the three storey village house at Lot 625 RP] was built in 1981 but it was only ready for occupation the next year. It is a 3 storey building. After he got married, there was an informal division of family asset from which he was given the 2^nd floor of House A (“2^nd Floor”). In fact, each son of the family was given a property at the time of his marriage. The other 2 floors of House A are occupied by the families of D1’s two younger brothers.

88. The 2^nd Floor has an area of 700 sq ft.  There are 3 rooms and a toilet.  D1 said that his family mainly lives at the Storage but they would cook and shower at House A.  There are photographs showing the outside of the 2^nd Floor. It is situated in a nice building with a balcony on which plants are kept. When D1 was asked why he preferred living in the Storage, he said that he had been staying there for a long time and he preferred the tranquillity there. When asked why he failed to disclose that he also lives in House A, he simply evaded the question.

89. I have no doubt that D1 was trying to cover up the fact that he is living at the 2^nd Floor instead of the Storage [i.e. the storage].  It is inconceivable that he would have preferred to live in the Storage with his family.  The lie is obvious when one considers, inter alia, the photographs of the Land taken in April 2002 (see para 7 above).  No one with a choice would prefer to stay at that place.  D1’s demeanour also betrayed him when he was caught out to have been untruthful.

90. In these circumstances, I believe that if D1 did reside in the Storage from 1972, such occupation would have ceased in 1982 at the latest.  Clearly, putting aside the issue whether D1 has been in possession of the remainder of the Land, I do not see any basis for an adverse possession claim by him.’

Grounds of appeal

5.  Ms Emma Wong relied on six grounds of appeal which I will summarize as follows :

1) The Judge was wrong to refuse the 1^st defendant’s request for a site inspection.

2) The Judge was wrong to confine the 1^st defendant’s case to where he had been residing.  Instead he should consider whether the 1^st defendant had sufficient control of the Land with the intention to possess the Land.

3) The Judge’s finding regarding the 1^st defendant’s possession was inconsistent with the plaintiff’s pleaded case and the objective evidence. Ms Wong submitted that the Judge failed to consider that the plaintiff has by his pleadings admitted that the 1^st defendant and his father were in possession of the Land since 1974 and had chosen to conduct his case on that basis.

4) The Judge ought to have held that the 1994 licence was terminated in 1982 when the plaintiff’s father assigned the Land to the plaintiff’s mother.

5) The Judge’s finding regarding the 1^st defendant’s credibility was unjustified.

6) The Judge was wrong to hold the 1^st defendant’s offer to buy the Land was an acknowledgment of the plaintiff’s title to the Land which defeated the adverse possession claim.

My view

6.   I will address these grounds but not in the order they were presented because some of these grounds can be dealt with together.

1)  Site inspection

7.  The issue of site inspection is a non-point.  This is not a case where a site inspection is crucial to the determination of the case.  The parties had put forward plans, survey reports and photographs of the site which would enable the Judge to form a view of the site.  During the appeal, Ms Wong was able to demonstrate from these documents the location of the Land, Lot 625 RP and the adjacent government land.  She was able to show the position of the structure and the toilet on the Land in relation to the nearby three storey village house on Lot 625 RP.  The refusal by the Judge to carry out a site inspection was not an irregularity and did not cause any issue to be other than fully determined. Insofar as it was suggested that the judge would have seen windows in the structure had he gone on a site inspection, that was evidence that could have been adduced in other ways at the trial. 

2)  Admission by pleadings?

8.1   I disagree that the plaintiff had admitted that the 1^st defendant was in possession of the Land.  The 1^st defendant pleaded in his defence that his predecessor-in-title had been in continuous possession from 1945 to 1988 and since then he has been in continuous and exclusive possession of the Land (paragraph 3).  He further pleaded that the Land and the structure has been and still is his residence and he has since 1972 been in exclusive occupation and possession of the Land (paragraph 3(6)). 

8.2   The issue raised in the defence was ‘joined’ by the plaintiff.  This means in ordinary language that the plaintiff has denied this allegation when he filed his reply.  In fact paragraph 2 of the Reply expressly pleaded that :

̒ The plaintiff joins issue with the 1^st defendant on the Defence and Counterclaim save as in so far as the same consists of admissions.’

8.3   Looking at the plaintiff’s reply, I do not find any admission at all. Paragraph 4(f) of the Reply speaks for itself.  For the ease of reading, I have numbered the sentences :

̒ [1] Each and every allegation of paragraph 3(6) of the Defence and Counterclaim is denied.

[2] Save that the 1^st defendant might have been in occupation of the Land at some time pursuant to the licence granted to Mr To Chau Shun and subsequently pursuant to another licence granted to himself (as pleaded in paragraph 7 of the Statement of Claim), it is specifically denied that the 1^st defendant had been in exclusive occupation or possession of the Land at any period or time since 1972.

[3] If, which is denied, the 1^st defendant had been in possession of the Land at any such period other than the period of the licence granted by Mr To Senior (in favour of Mr. To Chau Shun) and the licence granted by the plaintiff (in favour of the 1^st defendant), it is specifically denied that such possession on the part of the 1^st defendant was exclusive, continuous or uninterrupted.

[4] It is accordingly denied that the 1^st defendant possessed the requisite intent of adverse possession in treating the Land as his own at any time since 1972 as alleged or at all.

[5] In the premises, there was no adverse possession of the Land on the part of the 1^st defendant either.’

8.4   In my view, it is plain that by paragraph [1] the plaintiff had denied the 1^st defendant’s residence since 1972.  Paragraph [2]’s reference to the 1^st defendant’s occupation was expressly subject to the denial that he has been in exclusive occupation or possession of the Land at any period since 1972.

3)  Factual challenges

9.  The 1^st defendant is essentially challenging the Judge’s finding of fact.

(i) The starting point

10.1   The first issue framed by the 1^st defendant at the trial was ‘whether [he] and his predecessor-in-title have had possession [of the Land] for 20 years or more before the commencement of this action (“the Factual Possession Issue”)’.

10.2   Irrespective of the evidence of the events prior to 1974, the starting point of the inquiry in this case must be the Judge’s finding of the existence of the 1974 licence granted by the plaintiff’s father.  Any occupation by the 1^st defendant’s father of the Land from 1974 onwards was with the permission of the plaintiff’s father and could not have been adverse to him or the plaintiff.  Having said that, however, the law is that a licence is a personal contract which would be terminated by devolution of title or by death.  In Meeruppe Sumanatissa Terunnanse v. Warakapitiye Pangnananda Terunnanse [1968] A. C. 1086, Lord Devlin at 1095‒1096 stated :

̒A revocable licence is automatically determined by the death of the licensor or by the assignment of the land over which the licence is exercised.’

10.3   The 1974 licence was clearly revocable as the evidence showed that the plaintiff’s father told the defendant’s father that the Land must be returned to him when he needed it which the latter agreed.  Thus when the plaintiff’s mother became the owner in 1982, the licence was terminated by law.

(ii)   The residence

11.1   It is not necessary for the purpose of this appeal to consider whether the 1^st defendant’s father was aware of this change or whether the licence was only terminated on his own death in 1988, because, even if the occupation by 1^st defendant became adverse to that of the plaintiff in 1982, the Judge’s finding is that he has not been in exclusive possession of the structure from 1982 onwards.  This is clearly based on the inherent improbability of the 1^st defendant choosing to live in such a small place without cooking and toilet facilities when he has the benefit of living in a nice 700 sq ft flat in the three storey house with modern facilities.

11.2   Ms Wong argued that even if the 1^st defendant did not use the structure as his residence, the Judge was still required to find whether he has been in possession of the structure at all.  True after the 1^st defendant revealed that he has been living in the flat, he backtracked and said he lives in both the flat and the structure, but he did not elaborate how he made use of these two areas apart from saying that he has a longer stay in the structure and a shorter stay at the flat, almost like treating the flat as a holiday home. This was not how he had presented his case in the first place.  He did not say that he has been living in two places at the same time.  On the contrary he had insisted that the structure has been used by him as his matrimonial home since his marriage.  The Judge was clearly not impressed with evidence like this and was entitled to disbelieve the 1^st defendant that he is still living in the structure after the three storey house was built.

11.3   Ms Wong argued that there was the evidence of the surveyor that he had been to the structure three times in 2011 and he found the structure was used as a study by the son of the 1^st defendant.  But this evidence only addressed the situation after the present case had commenced and there was no evidence of how the 1^st defendant used the two places from 1982 onwards.

(iii) The judge’s approach

12.1   I will at this juncture also deal with Ms Wong’s other criticism of the Judge on the issue of residence.  It is said that the Judge was wrong to take upon himself the task of questioning the 1^st defendant about his residence when counsel for the plaintiff had not asked him any question on this topic.  In my view the Judge was clearly entitled to pursue this line of questioning when the 1^st defendant’s case was that his family has always treated Lot 625 RP together with the Land as their own.  Based on this evidence the Judge was clearly entitled to ask where did the 1^st defendant’s father live which triggered the 1^st defendant’s answer that his father lived at the three storey house and the revelation that he and his brothers are living there now.  Until that point he maintained that he has been living in the structure. 

12.2   While there were expressions of the Judge descending into the arena and his assessment of the evidence was compromised, Ms  Wong expressly disavowed any allegation of bias on the part of the Judge.  I do not see how this point would assist the 1^st defendant.

(iv)  Other evidence

13.1   What then is the other evidence in support of the 1^st defendant’s case that he has been in adverse possession of the Land since 1982? Ms Wong relied on the following :

(1) There was a system of fencing and walls enclosing the Land and Lot 625 RP.

(2) Lot 625 RP abuts onto the Land and there was no fence separating these two lots of land.  Since 1963, some structures were built which straddled these two lots of land.

(3) The 1^st defendant has grown trees and plants on the Land, paved part of the Land and built the toilet.

(4) It was the plaintiff’s oral evidence that the structure was locked when he entered into the Land on an occasion in 2008.

(5) The 1^st defendant and his father treated the Land as their own land by renovating the roof of the structure in or about 1977, building a toilet on the Land and repainting the façade of the structure in 2007.  The 1^st defendant had paid the permit fees and utility charges.

(6) The photographs taken in 2011 showed that the Land and the structure were being used and occupied.

13.2   In respect of the enclosure, the photographic evidence did not reveal a complete enclosure by wall or fencing.  There was a row of short brick walls at the western boundary of the Land and there was wired fence extending from the brick wall, but there is no indication of the length of the extension or where it leads to.  There was also a gate in front of Lot 625 RP.  This is the sum total of the evidence on enclosure.

13.3   Even if, for the purpose of argument, some structures were partly built on the Land, it does not mean that the 1^st defendant has exclusive possession of the Land.  For the same reason, the work carried out by the 1^st defendant, such as planting trees, paving part of the Land, building the toilet, renovating the roof and painting the exterior of the structure do not point to exclusive possession.  The Judge found that there was no evidence that the permit fees and utilities charges were paid in respect of the structure.  The Judge had observed that the 2011 photographs were taken for the preparation of the case.  He had also considered the photographs taken in 2002 which showed that the Land ‘was in a state of neglect and there were a lot of materials, much of which appear to be useless, scattered on the land’.  The locking up of the structure may be a relevant factor but it is one of the factors only.  It is for the Judge to consider all the circumstances in order to reach a decision on this issue.  He certainly has not based his decision on his impression of the witnesses’ demeanour.  I do not consider that the Judge had been plainly wrong in his factual finding (including the credibility of the 1^st defendant) which is the test this Court has consistently applied in dealing with appeals on facts.

Acknowledgment of title

14.  As it is, it is not necessary for me to deal with the issue of acknowledgment of title.

Application for new evidence

15.  An application was made by Ms Wong to adduce new evidence for the appeal in the form of photographs showing the exterior and interior of the structure on the basis that the Judge had raised an issue on the 1^st defendant’s possession of the structure which was said not to be an issue before him.  We refused the application as these photographs clearly could have been produced at the trial in support of the 1^st defendant’s case. 

Conclusion

16.  The appeal is accordingly dismissed with costs (including the costs of the application to adduce new evidence) to the plaintiff.  We will grant certificate for one counsel.

Hon Yuen JA :

17.  I agree with the judgment of Cheung JA.

Hon Poon J :

18.  I agree.