TSANG FOO (also known as FU) KEUNG and KEY KWONG DEVELOPMENT LTD v. CHU JIM MI JIMMY AND OTHERS

HCA 7140/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 7140 OF 1995

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J U D G M E N T

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INTRODUCTION

1.  This action concerns the ownership, or right to possession, of a small portion of On Hing Terrace.

2.  The plaintiffs are the registered owners of the lands registered in the Land Registry as (i) The Remaining Portion of Subsection 1 of Section H and (ii) The Remaining Portion of Subsection 2 of Section H, of Inland Lot No 617 (“the Land”).  Erected upon a portion of the Land is a building known as Ivy House, Nos 18-20 Wyndham Street, Central, Hong Kong.

3.  Another portion of the Land is made up of (i) two flights of steps (“the Lower Steps” and “the Upper Steps” respectively) with a landing between them (“the Landing”) (hereinafter collectively referred to as “the New Staircase”), and (ii) a platform above the Upper Steps (“the Platform”).  The New Staircase and the Platform form part of On Hing Terrace.

4.  Although the plaintiffs are the registered owners of (inter alia) the New Staircase and the Platform, it is not in dispute that they are subject to a right of way in favour of other owners and occupiers of various sections and subsections of Inland Lot No 617, and are generally used as a public street.  Further, for many years, there have been fixed pitch hawker stalls operating at the New Staircase.

5.  Chu Chun, deceased (“Chu Senior”) and/or his wife, Yu Lai Ying, deceased (“Madam Yu”) used to operate a hawker stall at the New Staircase.  Chu Senior passed away in 1986 and Madam Yu passed away on 9 June 1995.  The 1^st defendant (“Jimmy Chu”) is the 4^th child of Chu Senior and Madam Yu.  It is Jimmy Chu’s case that from about 1963/64 to 1985, Chu Senior and/or Madam Yu operated a hawker stall at the New Staircase carrying on a business of “mending and knitting clothes” and occupying a portion of the Lower Steps and the Landing such that by 1985 they had acquired a possessory title to the land shown on a plan (“Annex B”) attached to the re-re-amended defence and counterclaim of the 1^st defendant dated 11 September 2014 and marked as the “1^st Defendant’s Area” on that plan.  A copy of Annex B showing the 1^st Defendant’s Area is reproduced and attached to this judgment.

6.  There used to be another hawker stall at the New Staircase operated under a hawker licence in the name of the 2^nd defendant (“Madam Lai”) selling biscuits, soft drinks, bread and the like.  Later, a florist business was carried on at that hawker stall.  In or about early 1991, Madam Lai’s daughter, the 3^rd defendant (“Madam Wu”), succeeded to Madam Lai’s hawker licence and commenced to carry on a florist business under the name of “Orchid Florist”.  Madam Lai passed away in early 2014.

7.  This action and HCA 916/2012 were brought by the plaintiffs to (inter alia) recover possession of various portions of the New Staircase occupied or formerly occupied by Jimmy Chu and Madam Lai/Madam Wu or persons represented by them in these proceedings.

8.  Pursuant to the order of Mr Registrar Lung dated 31 July 2013 and a further order made by this court on 9 December 2014, this action and HCA 916/2012 were scheduled to be tried together.

9.  However, at the commencement of the trial on 2 March 2015, I was informed by Mr Wong Yan Lung SC (counsel for the plaintiffs in the two actions) and Mr Paul Wong (counsel for the 2^nd and 3^rd defendants in this action and for the defendant in HCA 916/2012) that their respective clients had agreed terms of settlement of their disputes.  Two consent orders were made which disposed of the entirety of (i) the plaintiffs’ claims against the 2^nd and 3^rd defendants, as well as the latter’s counterclaim against the plaintiffs, in this action, and (ii) the plaintiffs’ claim against the defendant in HCA 916/2012.  Accordingly, the outstanding matters to be resolved are:-

(1) the plaintiffs’ claim against the 1^st defendant in this action for (inter alia) an order for possession of the New Staircase, which includes the 1^st Defendant’s Area;

(2) the 1^st defendant’s counterclaims against the plaintiffs and the 2^nd and 3^rd defendants respectively for (inter alia) a declaration that the 1^st defendant has acquired a possessory title to the 1^st Defendant’s Area and an order for possession of the 1^st Defendant’s Area.

10.  In passing, I should mention that on the pleadings in this action, the 2^nd and 3^rd defendants have also raised a counterclaim against the 1^st defendant.  However, following the aforesaid settlement between the plaintiffs and the 2^nd and 3^rd defendants, it was clear that the 2^nd and 3^rd defendants would no longer pursue the counterclaim against the 1^st defendant.  In his closing submission, Mr Paul Wong on behalf of the 2^nd and 3^rd defendants accepted that their counterclaim against the 1^st defendant should be dismissed.

Background facts

(i) Historical redevelopment of Nos 14-16 and 18-20 Wyndham Street and the staircase

11.  There have at all material times since no later than the early 1960s (and probably for a considerable period prior to that time) been (i) a staircase situated between Mason’s Lane (on the north-eastern side of the staircase) and Nos 18-20 Wyndham Street (on the south-western side of the staircase) leading up from the pavement of Wyndham Street to the Platform at On Hing Terrace, and (ii) a low stone parapet wall (“the Stone Banister”) separating Mason’s Lane and the staircase and running up alongside the staircase to the Platform.

12.  However, both the staircase and the Stone Banister have undergone changes over the years.

13.  Prior to the redevelopment of Nos 18-20 Wyndham Street in the early 1960s which resulted in the erection of Ivy House, the staircase consisted of three flights of steps and two intermediate landings (“the Old Staircase”).

14.  In conjunction with the redevelopment of Nos 18-20 Wyndham Street, a portion of the Land was surrendered to the Government in anticipation of a future widening of Wyndham Street pursuant to an agreement to surrender dated 18 January 1961, which agreement was subsequently completed by a deed of surrender dated 23 September 1964.  By reason of the surrender of land, the façade of Ivy House facing Wyndham Street was set back (as compared to the old building previously standing thereon) with a corresponding increase in the width of the pavement in front of Ivy House.

15.  Apparently also in conjunction with the redevelopment of Nos 18-20 Wyndham Street, the Old Staircase was re-constructed and became the New Staircase with two flights of steps and one intermediate landing.  In addition, the bottom of the Lower Steps next to the pavement of Wyndham Street was set back in order to align the New Staircase with the building line of Ivy House.  The result was that the entrance steps to Mason’s Lane and a portion of the Stone Banister protruded from the bottom of the Lower Steps into the pavement until the redevelopment of Nos 14-16 Wyndham Street in the 1980s mentioned below.

16.  It is not in dispute that there are a total of 14 treads, each of about 11 inches in width, on the Lower Steps, and that the first 4 treads at the bottom of the Lower Steps are incomplete (as shown on Annex B).

17.  The redevelopment of Nos 18-20 Wyndham Street was completed in or about 1964, and Ivy House has been standing upon the Land since that time.  The occupation permit in respect of Ivy House was issued on dated 26 February 1964.  It is not entirely clear on the evidence before me as to the precise date on which the construction of the New Staircase was completed.  However, it is not in dispute that the New Staircase was completed in or prior to 1964.

18.  On the other side of Mason’s Lane is Nos 14-16 Wyndham Street.  The redevelopment of Nos 14-16 Wyndham Street took place in the 1980s which resulted in the erection of a building known as Wong Chung Ming Commercial House.  The occupation permit in respect of Wong Chung Ming Commercial House was issued on 23 December 1985.  Apparently, a portion of Nos 14-16 Wyndham Street was also surrendered to the Government for the purpose of road widening.

19.  As part of the redevelopment of Nos 14-16 Wyndham Street, the protruding parts of the entrance steps at Mason’s Lane and the Stone Banister were demolished, or cut back, so that they became aligned with the bottom of the Lower Steps with a corresponding widening of the pavement in front of Wong Chung Ming Commercial House.

20.  The actual road widening works on Wyndham Street took place in around late 1987, resulting in a narrower pavement in front of (inter alia) Nos 14-16 and 18-20 Wyndham Street and the New Staircase.

21.  There has not been any further change at or around Nos 14-16 and 18-20 Wyndham Street and the New Staircase since 1987 which is relevant for the purpose of this action.

(ii) Defendants’ old hawker stalls

22.  According to Jimmy Chu, Chu Senior and Madam Yu first set up a hawker stall carrying on a “mending and knitting clothes” business at On Hing Terrace in or about late 1947.  There is in evidence before me a letter dated 21 August 1996 from the Urban Services Department to Messrs Or, Ng & Chan which stated that:-

(1) a “Fixed Pitch (Tradesman) Hawker Licence” dated 4 December 1947 was granted to Chu Senior.  The location of the fixed pitch was said to be “Fixed Pitch No.1, On Hing Terrace, on steps abutting against House No.18 Wyndham Street”, and the “Commodity Sold” was described as “Clothes Mender”.

(2) another similar licence dated 2 April 1964 was granted to Chu Senior, and a further similar licence dated 13 November 1987 was granted to Madam Yu (Chu Senior having passed away in 1986); and

(3) a “Fixed Pitch (Other Classes) Hawker Licence” dated 2 December 1988 was granted to Madam Yu.  For this licence, the location of the fixed pitch was the same as before, but the “Commodity Sold” was described as “Dry Goods”.

23.  Jimmy Chu further said that in the late 1950s or early 1960s (when he was five or six years old), his parents’ hawker stall was on the steps at On Hing Terrace by the side of Nos 18-20 Wyndham Street, while the hawker stall of Madam Lai was at that time on the other side of On Hing Terrace abutting Nos 14-16 Wyndham Street.

24.  As a result of the redevelopment of Nos 18-20 Wyndham Street, the hawker stall of Jimmy Chu’s parents was relocated to the other side of the staircase, ie by the side of Nos 14-16 Wyndham Street. According to Jimmy Chu, his parents’ hawker stall had already been moved to the other side of the staircase before the completion of the New Staircase.  Jimmy Chu said that the relocation took place in or about 1963, and in any event before early 1964.

25.  The position and size of the hawker stall of Jimmy Chu’s parents after the aforesaid relocation (“D1’s Old Hawker Stall”) are in dispute.  I shall consider the position and size of D1’s Old Hawker Stall later in this judgment.  It is common ground (as mentioned in paragraph 25 of Jimmy Chu’s supplemental statement) that D1’s Old Hawker Stall remained in the same location since or about 1964 until some time around the completion of Wong Chung Ming Commercial House in 1985.

26.  It also seems to be clear on the evidence that D1’s Old Hawker Stall was in close proximity to the old hawker stall of Madam Lai (“D2’s Old Hawker Stall”), although the two might not have been in physical connection with each other as suggested by Jimmy Chu.  The position of D2’s Old Hawker Stall is, however, a matter in dispute.  The plaintiffs’ case is that D2’s Old Hawker Stall stood on the pavement of Wyndham Street right in front of the Lower Steps, while Jimmy Chu’s case is that it stood partly on the pavement and partly on the Lower Steps.  This dispute regarding the position of D2’s Old Hawker Stall was originally of some significance because the position of D2’s Old Hawker Stall had a direct bearing on the position of D1’s Old Hawker Stall (the two being in close proximity to each other).  However, the position of D2’s Old Hawker Stall is now of little importance in view of the evidence of the experts (in particular the evidence of the plaintiffs’ expert, Mr Leung Shou Chun) regarding the position of D1’s Old Hawker Stall, which I shall come to later in this judgment.

27.  According to Jimmy Chu, since the early 1980s, his parents had allowed Madam Lai to use part of their space (ie D1’s Old Hawker Stall) for the florist business being carried on at D2’s Old Hawker Stall.  This practice continued after the relocation of D1 and D2’s Old Hawker Stalls in or about 1985 (see below).

28.  It is Jimmy Chu’s case that by 1985 when D1’s Old Hawker Stall came to be relocated to a higher position on the New Staircase, his parents had, by reason of their occupation and use of D1’s Old Hawker Stall from around 1963/64 to 1985, acquired a possessory title to the 1^st Defendant’s Area.  It is also his case that the fact that his parents permitted Madam Lai or other persons to use part of D1’s Old Hawker Stall to carry on a florist business since the early 1980s, and/or his parents moved out of the land on which D1’s Old Hawker Stall stood in or about 1985, could not affect the possessory title in respect of the 1^st Defendant’s Area acquired by his parents.

(iii) Defendants’ new hawker stalls

29.  As earlier mentioned, the redevelopment of Nos 14-16 Wyndham Street took place in the 1980s, and the construction of Wong Chung Ming Commercial House was completed in or about 1985.  It was also in around 1985 that D1’s Old Hawker Stall and D2’s Old Hawker Stall were demolished and replaced by two new hawker stalls (“D1’s New Hawker Stall” and “D2’s New Hawker Stall” respectively) which were located at positions higher up on the New Staircase.

30.  According to a survey sketch prepared by Wu Hill & Associates Ltd dated 25 September 1996, D2’s New Hawker Stall occupied part of the Lower Steps from the 5^th to the 11^th treads, while D1’s New Hawker Stall stood wholly on the Landing.

31.  According to Jimmy Chu, after his father’s death in 1986, Madam Yu (with the help of his brother, Chu Kwok Chung) changed the nature of the business being carried on at D1’s New Hawker Stall from “mending and knitting clothes” to “selling dry goods”, and she “inherited” Chu Senior’s hawker licence on or about 13 November 1987.  Jimmy Chu further said that in or about early 1990s, when Madam Yu became too old to run a hawker business, she allowed Madam Lai and her family to use the whole of D1’s New Hawker Stall for the florist business carried on at D2’s New Hawker Stall.

(iv) The Chu family moved out of On Hing Terrace

32.  Madam Yu passed away on 9 June 1995.  As stated in the above mentioned letter dated 21 August 1986 from Urban Services Department to Messrs Or, Ng & Chan, the hawker licence granted to Madam Yu was cancelled on 30 August 1995.

33.  On or about 5 January 1999, Chu Kwok Chung submitted a written application to the Urban Services Department to succeed to Madam Yu’s hawker licence.  That application was rejected on 31 August 1999. However, on 25 July 2000, the Licensing Appeals Board, upon Chu Kwok Chung’s appeal, decided that he could succeed to Madam Yu’s hawker licence on condition that the new hawker stall should not be located within a private lot (which meant that it could not be located at On Hing Terrace).  After a further appeal by Chu Kwok Chung, the Municipal Services Appeal Board decided, on 30 October 2000, that Chu Kwok Chung could succeed to Madam Yu’s hawker licence at the same location (ie at On Hing Terrace).

34.  Jimmy Chu said that Chu Kwok Chung did try to run a hawker business at On Hing Terrace but that did not last long due to Chu Kwok Chung’s poor health.

35.  On 25 March 2008, Chu Kwok Chung passed away. His wife, Yip Wai Yin, succeeded to his hawker licence which permitted her to operate a hawker stall at 57 Queen’s Road Central, Li Yuen Street West, since about 11 May 2009.  Apparently, Yip Wai Yin is currently still running a hawker stall there.

36.  The upshot of all these is that:-

(1) since about 1985, the Chu family has ceased physical occupation of, by and large, the 1^st Defendant’s Area;

(2) save for a brief period of time mentioned in paragraph 34 above, since about the early 1990s, the Chu family has ceased physical occupation of any hawker stall at On Hing Terrace; and

(3) since about 2009, the Chu family has ceased to hold any hawker licence which allows any member of the Chu family to carry on business at On Hing Terrace.

37.  In view of the fact that Jimmy Chu’s case of adverse possession is based primarily on the occupation of D1’s Old Hawker Stall by his parents prior to 1985 and not on their occupation of D1’s New Hawker Stall in or after 1985[1], in what follows, I shall focus on the nature and extent of the occupation of D1’s Old Hawker Stall by Jimmy Chu’s parents prior to 1985.

38.  At this juncture, it would be convenient for me to record that there are a number of factual disputes which, in view of the settlement reached between the plaintiffs and the 2^nd and 3^rd defendants and the expert evidence given at the trial, have become of little significance.  I mention them briefly here in order to assist comprehension should it become necessary in future to read this judgment against the evidence adduced at the trial.

(1) There appears to be a dispute on whether Madam Lai’s hawker stall was originally also located by the side of Nos 18-20 Wyndham Street, and moved across to the side of Nos 14-16 Wyndham Street at or about the same time as when the hawker stall of Jimmy Chu’s parents moved to the side of Nos 14-16 Wyndham Street.

(2) At some stage between 1964 and 1981, D2’s Old Hawker Stall was operated by a person called Lo Ming. It is not entirely clear as to whether Lo Ming was an assistant of Madam Lai or “rented” the hawker stall from Madam Lai.  In any event, Tsui Ling Mui (“Tsui”)’s evidence is that in or about 1981, Lo Ming, Lau Po Chun, Lee King Ming and Tsui formed a partnership to carry on a florist business in the name of “Ming Kee Flower Shop” at D2’s Old Hawker Stall and later at D2’s New Hawker Stall, and they paid “rent” to Madam Lai.  In or about early 1991, the 3^rd defendant took over from the said partnership and started to carry on a florist business at D2’s New Hawker Stall.

Applicable principles

(i) The two basic elements of adverse possession

39.  In order to prove “adverse possession”, two basis elements have to be established, namely, (i) a sufficient degree of factual possession, and (ii) an intention to possess.

40.  In Shine Empire Ltd v Incorporated Owners of San Po Kong Mansion [2006] 4 HKLRD 1, at paragraph 28, Yuen JA (with whom Rogers VP and Le Pichon JA agreed) explained these two basic elements in the following way:-

“ The House of Lords in Pye has said that whilst the term ‘adverse possession’ should be avoided as no intention of hostility to the paper title owner is required (paras. 36, 69), it is still necessary for the party (‘the squatter’) claiming that it has dispossessed the paper title owner to prove two separate elements: (1) a sufficient degree of factual possession in the sense of physical control, and (2) an intention to possess. To establish factual possession, the squatter has to show absence of the paper title owner’s consent, a single and exclusive possession and such acts as demonstrated that in the circumstances, in particular, the nature of the land and the way it was commonly used, it had dealt with it as an occupying owner might normally be expected to do and that no other person had done so (para. 41). To establish an intention to possess, the squatter has to show that he intended to occupy and use the land as his own (para. 71), to exclude the world at large, including the paper title owner, so far as was reasonably possible (para.43).”

41.  The decision of the Court of Appeal in Shine Empire Ltd was upheld by the Court of Final Appeal: (2007) 10 HKCFAR 588.  At 593, Nazareth NPJ, giving the judgment on behalf of the Court of Final Appeal, endorsed the following statement of principles by Slade J in Powell v McFarlane (1979) 38 P&CR 452 (which were also approved by the House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419):-

“ (1) …

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess (‘animus possidendi’).

(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances…acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole. Whether or not acts of possession done on parts of an area establish title to the whole area must, however, be a matter of degree….is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.

(4) … the animus possidendi 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 be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.

…

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 is why the slightest acts done by or on behalf of an owner in possession will 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 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.  If his 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.”

42.  The burden of proof of these two basic elements lies on the person claiming adverse possession.  The evidence necessary to establish adverse possession must be “compelling” (Wu Yee Pak v Un Fong Leung (2004) 7 HKCFAR 498, at paragraph 5 per Chan PJ).  This gives recognition to the serious consequence of a finding that the title of a paper owner is displaced by an adverse possessor, although the standard of proof is still the normal civil standard, ie on a balance of probabilities.

43.  In so far as the element of “factual possession” is concerned, it has been said that the occupation should be “exclusive, continuous, open and visible and notorious … It must not be equivocal, occasional, or for a special or temporary purpose” (Pflug v Collins [1952] 3 DLR 681, at 689).

44.  In relation to the element of “intention to possess”, the adverse possessor must show that he had a “plain and unequivocal intention to exclude the world at large” (Bolton Metropolitan Borough Council v Musa Ali Qasmi (1999) 77 P&CR 36, at 37 per Peter Gibson LJ).  In that case, it was also pointed out that it is not necessary for the adverse possessor to give evidence of his subjective intention. “Such self-serving evidence is hardly ever likely to be of assistance. The ordinary way in which the relevant intention is ascertained is by inference from the actions of the adverse possessor in the light of all the circumstances affecting the land.”

45.  An intention to “possess” is not the same as an intention to “own”.  As observed by Hoffmann J (as he then was) in Buckinghamshire County Council v Moran (1988) 86 LGR 472 at 479, what is required is “not an intention to own or even an intention to acquire ownership but an intention to possess”.  This statement was endorsed by the Court of Appeal in the Moran case [1990] Ch 623 and approved by Lord Browne-Wilkinson in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, at 436.

46.  When considering whether a person in physical occupation of land should be regarded as being in “legal possession” of that land, the intention of that person could be significant.  In JA Pye (Oxford) Ltd v Graham, Lord Browne-Wilkinson explained the position at 435-436 as follows:-

“ What is crucial is to understand that, without the requisite intention, in law there can be no possession… there has always, both in Roman law and in common law, been a requirement to show an intention to possess in addition to objective acts of physical possession. Such intention may be, and frequently is, deduced from the physical acts themselves. But there is no doubt in my judgment that there are two separate elements in legal possession. So far as English law is concerned intention as a separate element is obviously necessary. Suppose a case where A is found to be in occupation of a locked house. He may be there as a squatter, as an overnight trespasser or as a friend looking after the house of the paper owner during his absence on holiday. The acts done by A in any given period do not tell you whether there is legal possession. If A is there as a squatter he intends to stay as long as he can for his own benefit: his intention is an intention to possess. But if he only intends to trespass for the night or has expressly agreed to look after the house for his friend he does not have possession. It is not the nature of the acts which A does but the intention with which he does them which determines whether or not he is in possession.”

47.  In other words, whether there is an “intention” to possess may be, and frequently is, deduced from the physical acts of the person claiming adverse possession.  On the other hand, there may be cases where the “intention” with which an act is done would determine whether the act in question amounts to “possession” as a matter of law.

(ii) Possession must be by the claimant in his own right and not as licensee or representative of another person

48.  To constitute possession for the purposes of limitation, the claimant must show that he took possession of the land in his own right and not as licensee or representative of another person, even if that other person is not the true owner or an agent acting on behalf of the true owner.

49.  In Brazil v Brazil [2005] All ER (D) 311 (Mar), David Donaldson QC (sitting as a deputy judge of the High Court in the Chancery Division) stated the principle as follows, at paragraph 27:-

“ … the need for the possession to be adverse means that a possession based on licence or permission cannot be relied upon. And the decision of the Privy Council in Sze v Kung [1977] 1 WLR 1232 makes clear that this applies even where the licence or permission is given by some person other than the true owner or on his behalf, since the possession is then that of the licensor.”

50.  The same conclusion was reached by Au-Yeung J in Pang Yiu Chor and Others v Wong Wai Leung and Others, HCMP 3972/2000 (17 September 2013), at paragraphs 22 and 23:-

“ 22. The following principles are relevant:

(1) To constitute possession, control must be exercised by the defendant in his own right: Jourdan and Radley-Gardner, Adverse Possession, 2^nd ed, at para 7-103.

(2) If a person (the licensee) takes possession by virtue of a license granted by another, it is the licensor who is treated as being in possession: Radley-Gardner, Adverse Possession, 2^nd ed, at para 7-127.

23. The 2^nd principle is made clear by the Privy Council decision in Sze To Chun Keung v Kung Kwok Wai David & anor [1997] 1 WLR 1232.It applies even where the license was given by some person (in that case, the government) other than the true owner or on his behalf, since the possession is that of the licensor.”

51.  That for the purpose of adverse possession, occupation by a licensee is to be regarded as occupation by the licensor is well established (Harper v Charlesworth (1825) 4 B&C 574, at 584 per Bayley J).

The 1^st defendant’s parents occupied D1’s Old Hawker Stall as Government licensees pursuant to fixed pitch hawker licenses granted by the Government

52.  It seems to me to be clear that during the period from 1963/64 to 1985, Jimmy Chu’s parents carried on business at D1’s Old Hawker Stall, and occupied the land on which that hawker stall stood, as Government licensees pursuant to fixed pitch hawker licences issued by the Government (some of which were referred to in the aforesaid letter dated 21 August 1996 from the Urban Services Department to Messrs Or, Ng & Chan), and not in their own right.

53.  There is no relevant evidence before me which shows that there was any other basis on which Jimmy Chu’s parents occupied and carried on business at D1’s Old Hawker Stall during that period of time.  Chu Senior and Madam Yu have both passed away and obviously cannot give any relevant evidence on this issue.  There is no documentary evidence which suggests that they might have occupied and carried on business at D1’s Old Hawker Stall other than pursuant to the fixed pitch hawker licences granted by the Government.  Jimmy Chu is likewise unable to give any relevant evidence on this issue.  If anything, his evidence tends to support the view that Jimmy Chu’s parents occupied and carried on business at D1’s Old Hawker Stall pursuant to fixed pitch hawker licences granted by the Government.  I believe this is also the realistic view of the matter.

54.  The hawker licences were issued pursuant to the Hawker (Urban Council) By-laws (“the By-laws”), now known as Hawker Regulation, Cap 132AI.  The following provisions of the By-laws are relevant for the present purposes:-

Section 8

“ (1) In every case where an application for a fixed-pitch hawker licence is granted, the Council shall, subject to paragraph (2), issue to the applicant in such form as it thinks fit a fixed-pitch hawker licence which authorizes the applicant to hawk from a fixed pitch.

(2) Every such licence shall –

(a) state on its face that it is a fixed-pitch hawker licence;

(b) specify an identifying number or the approximate location of the pitch;

(c) specify the name and address of the licensee;

(d) specify the nature of the commodity to be sold, or the service to be provided, by the licensee;

(e) if the licensee has been allocated a fixed pitch, specify particulars of the location of the pitch;

(g) state that the licence is issued subject to the condition that the licensee complies with these by-laws.

(3) Without limiting paragraph (2), the Council may in any such licence-

(a) impose on the licensee conditions relating to the sale of the commodity, or, as the case may be, the provision of the service, which he is permitted to hawk;

(b) prescribe the hours during which the licensee is permitted to hawk;

(c) if the licensee has not been allocated a fixed pitch, specify the areas in which he may hawk;

(d) specify such other particulars as the Council considers necessary.”

Section 18

“ Every licence, other than a temporary licence, shall, unless it is sooner renewed, expire 12 months after the date on which it was issued.”

Section 19(2)

“ Notwithstanding anything to the contrary in these by-laws, a licence is deemed to be cancelled on the death of the licensee.”

Section 27(1)

“ The Council may from time to time cause fixed pitches to be set aside in any place or street or in any hawker permitted area for the use of holders of fixed-pitch hawker licences.”

Section 32

“ Where the Council has erected a sign at or on a fixed pitch containing a notice to the effect that the use of the pitch is prohibited during such periods as may be specified, no licensee shall use that pitch during those periods.”

Section 33

“ (1) Where a licensee is the holder of a fixed-pitch hawker licence which authorizes him to deal in drink or cooked food, the Council shall allocate a fixed pitch to him on payment of the prescribed fee.

(2) If a licensee is the holder of any other type of fixed-pitch hawker licence, the Council may, depending on availability, allocate to him a fixed pitch on payment of the prescribed fee.”

Section 34

“ (1) Where the Council serves on a licensee to whom a fixed pitch has been allocated under by-law 33 a notice ordering him to vacate the pitch, he shall comply with the notice within such period as may be specified in it, being a period not less than 15 days from the date of service.

(2) At the expiry of the period specified in the notice, the pitch shall, unless the Council otherwise directs, cease to be allocated to the licensee.

(5) Where any licensee fails to comply with any notice or direction served on or given to him under this by-law within the period specified in the notice or direction, the Council, or any officer acting under the authority of the Council, may remove all equipment, commodities, and other items left on the pitch; and, without prejudice to the liability of the licensee to any penalty or forfeiture under these by-laws or under the Ordinance, the Council may recover the cost of removal from the licensee in like manner as a debt.”

Section 36

“ (1) No person (whether a licensee or otherwise) shall use a fixed pitch unless he is the holder of a fixed-pitch hawker licence.

(2) A licensee who holds a fixed-pitch hawker licence shall not hawk from any place other than that to which his licence relates.”

Section 37

“ A licensee who holds a fixed-pitch hawker licence shall not use a fixed pitch that is for the time being allocated to another licensee, or that is being lawfully used by another licensee.”

Section 44

“ Neither a licensee nor any other person shall use a stall for any purpose other than hawking.”

Section 45(2)

“ A licensee who provides a stall on a fixed pitch shall remove the stall from the pitch as soon as he ceases to be entitled to the use of the pitch.”

Section 55

“ Every licensee shall comply with –

(a) the conditions of his licence;

(c) any condition subject to which the Council grants to him any approval under these by-laws”.

55.  I may add that for the purposes of the By-laws:-

(1) “Council” means the “Urban Council”; and

(2) “fixed pitch” means “any pitch delineated on the ground under by-law 27 or a pitch specified in a fixed-pitch hawker licence issued under by-law 8(1)”.

56.  The licence conditions (which appear to be in standard terms) provide, relevantly, as follow:-

(1) The licensee shall comply with the provisions of the By-laws (Condition 1);

(2) The licensee shall not transfer or assign his licence to any person, or sub-let or part with possession of the stall, without the prior approval in writing from the Urban Council (Condition 2);

(3) No commodities or services other than those specified in the licence may be sold or provided at the stall.  Any change in such commodity or service requires prior approval in writing of the Urban Council (Condition 3).

57.  In the “Fixed Pitch Hawker Licence” granted to Madam Yu dated 21 October 1993, the “authorised pitch size” is stated to be “1200 mm x 900 mm (not exceeding 1.1 square metres)”, and the “commodity specified” is stated to be “CLASS III as endorsed on the list annexed”. Although that licence was dated 21 October 1993 (ie after 1985), there is no suggestion there was any relevant change in relation to the aforesaid matters in the various licences granted to Chu Senior or Madam Yu during the period from 1963/64 to 1985 (save in relation to the “commodity specified” where there was, apparently a change from “clothes mender” to “dry goods”).

58.  I consider it to be reasonable to proceed on the basis that at all material times during the period from 1963/64 to 1985, the licences granted to Chu Senior or Madam Yu were subject to the aforesaid By-laws and terms and conditions (with the exception mentioned above).

59.  In my view, these By-laws and licence terms and conditions, subject to which Chu Senior and/or Madam Yu carried on business at D1’s Old Hawker Stall and occupied the land on which that hawker stall stood, amply demonstrate that during the period from 1963/64 to 1985:-

(1) The licences granted to them were “fixed pitch” hawker licences which spelt out the specific location and the precise dimensions of their allocated pitch.  It is not merely a licence permitting them to carry out certain activities.

(2) Chu Senior and Madam Yu were at all material times subject to the power of the licensing authority to allocate a specific pitch to them as well as the power to require them to vacate from their allocated pitch.

(3) The purpose and the duration of Chu Senior and Madam Yu’s occupation of their allocated pitch, as well as the activities which they were permitted to carry out at their allocated pitch, were subject to close control and regulation by the licensing authority.

(4) Chu Senior and Madam Yu were also subject to stringent restrictions as to how their allocated pitch could be occupied and used.

The 1^st defendant has failed to establish either factual possession or an intention to possess

60.  As earlier mentioned, I consider it to be clear that during the period from 1963/64 and 1985, Jimmy Chu’s parents occupied the land on which D1’s Old Hawker Stall stood as Government licensees pursuant to fixed pitch hawker licences granted by the Government, and not in their own right.  It follows that their occupation of D1’s Old Hawker Stall cannot be regarded as “possession” for limitation purposes.  This is quite apart from the fact that that their occupation of D1’s Old Hawker Stall was for a special or limited purpose (ie hawking) under stringent restrictions imposed by the By-laws and the licence terms and conditions which, in my view, would also lead to the same conclusion.

61.  The fact that the Government was not the owner of the land in question would not affect the conclusion that Jimmy Chu’s parents did not have “possession” of D1’s Old Hawker Stall for limitation purposes.  As to how it was that the Government, not being the land owner, could or would grant licences to Jimmy Chu’s parents or Madam Lai to occupy private lands for the purpose of hawking, this was considered by Keith J (as he then was) in Wu Chee Ling v Urban Council [1996] 3 HKC 230, which related to an application for judicial review brought by Madam Wu to challenge the decision made by the Urban Council requiring her stall to be relocated to another site as a result of an objection raised by the owners of Ivy House to the presence of her stall on their land.  At page 235-238, the learned judge stated as follows:-

“ It is against that background that Mr. Dykes argues that it was nevertheless never contemplated that the regulatory scheme covering hawkers should apply to private land…

These powers are said to be consistent only with the regulatory scheme applying only to land which is publicly owned, because the exercise of these powers on private land would constitute a trespass.

I reject this argument. The exercise of these powers on private land would only constitute a trespass if they were done without the consent of the owners of the land… Since there is nothing to prevent the exercise of these powers on private land with the owners’ consent, the existence of these powers is not inconsistent with the regulatory scheme applying to private land. Indeed, one can readily understand why the scheme should apply to private land. There may be many owners of private land who are content to have hawkers on their land provided that their activities are lawfully and properly regulated…

The letter of 19th April 1995 did not merely give the Applicant notice of the order to vacate her pitch. It also gave her the reason for that requirement. She was told that the pitch was on land owned by the owners of Ivy House, that they had informed the USD that they no longer wanted the Applicant on their land, and that her pitch had to be re-sited “to be fair” to them. That reason is in accordance with what has been stated to be the Council’s long-standing practice to require fixed pitch licence holders to vacate their pitch if the pitch is on private land, and the owner of the land no longer consents to the presence of the pitch on the land…

… The Council’s long-standing practice is an entirely rational and sensible one. Hawkers can only trade on private land if they have the consent of the owners of the land to be there. Otherwise, their presence on the land would constitute trespass. For that reason, the Council cannot sanction the presence of hawkers on private land without the consent of the owners of the land. It could not, for example, issue a fixed pitch hawker licence to a hawker who proposed to trade from private land without the owner’s consent.

Seen in that light, there was nothing unlawful about the exercise by the Council of its power to require the Applicant to vacate her pitch.  Although the effect of the notice under by-law 34(1) was to advance the claim of the owners of Ivy House for the removal of the Applicant from the site, that was not the reason for its issue. The reason for its issue was that the Council was not prepared to permit hawking on private land without the owners’ consent.  The Council did not implement the request of the owners of Ivy House to remove the Applicant from the land.  What happened was that the request showed that the owners of Ivy House no longer consented to the presence of the Applicant on their land, and it was that lack of consent which triggered the application by the Council of its long-standing practice.  In those circumstances, the USD’s letter of 20th June 1995 merely informed the Applicant’s solicitors that if the owners of Ivy House were to consent to the presence of her flower stall on the steps of On Hing Terrace, the fact which triggered the application of the Council’s practice would no longer be present.”

62.  For the sake of completeness, I should mention that in that case, Keith J did quash the decision of the Urban Council on the ground that Madam Wu might have acquired a possessory title to her pitch which, if established, would mean that the council would not have issued the notice to Madam Wu to vacate from her pitch in accordance with its relevant policy (see pages 238-240 of the report of that decision).

63.  In so far as “intention to possess” is concerned, as mentioned above, such intention is generally to be ascertained or deduced from the physical acts of the person claiming adverse possession.  The subjective intention of that person is unlikely to carry much, if any, weight. In any event, neither Chu Senior nor Madam Yu is available to give evidence, and Jimmy Chu is unable to give any evidence of value on the intention of his parents (even if he is able to do so, his evidence would logically carry even less weight).  As earlier mentioned, I have come to the view that Chu Senior and Madam Yu occupied D1’s Old Hawker Stall for a special or limited purpose (ie hawking) under stringent restrictions imposed by the By-laws and the licence terms and conditions.  Looking at the matters objectively, I consider that the right, and realistic, view to take is that Jimmy Chu’s parents did not intend to occupy and use the land on which D1’s Old Hawker Stall stood as their own, or exclude the world at large (including the paper title owner so far as was reasonably possible) in their own names and on their own behalf.  It follows that the element of “intention to possess” for the purpose of establishing adverse possession is also missing in the present case.

64.  The above conclusions make it unnecessary for me to consider various other issues raised by the parties at the trial. However, I shall deal with them briefly in the event that there should be any appeal against this judgment.

The area over which the 1^st defendant’s parents had exclusive occupation

65.  Much of the evidence adduced at the trial relates to the actual size and position of D1’s Old Hawker Stall.

66.  Jimmy Chu’s evidence is that D1’s Old Hawker Stall, taking into account all the working, pitch and storage areas as a whole (ie the 1^st Defendant’s Area as marked on Annex B), started from part of the Lower Steps to somewhere near the Landing of the New Staircase, and that it remained in the same position during the entire period from about 1963/64 to 1985.

(i) The Areas Outside the Pitch

67.  The 1^st Defendant’s Area includes not just the area covered by the pitch structure (“the Pitch”) itself, but includes areas under a canopy (or roof) and possibly some uncovered areas where raw materials, finished goods and other loose items used in connection with the business carried on by Jimmy Chu’s parents were placed (“the Areas Outside the Pitch”).  It seems clear that during the daytime, the Areas Outside the Pitch were not enclosed.  During the night time, (according to Jimmy Chu) parts of the Areas Outside the Pitch would be enclosed by loose plastic sheets handing down from the rim of the canopy (or roof). This part of Jimmy Chu’s evidence is not mentioned in his four witness statements and I am not prepared to accept it.  In any event, even if one were to accept Jimmy Chu’s evidence, it would appear that any passers-by could easily push away and walk through the plastic sheets during the night.  I do not consider that a case of adverse possession in respect of the Areas Outside the Pitch could be made out on such facts.  In this regard, it is well established that the mere “use” of land does not amount to exclusive possession and is not sufficient for the purpose of establishing title by adverse possession: see Lee Theatre Realty Ltd v Tong Wah Jor & Others, HCA 1251/2003 (1 December 2009), at paragraph 68 per Deputy High Court Judge Carlson, on appeal CACV 279/2009 (2 May 2013), at paragraph 27 per Cheung JA; Mak Kam Chuen v Triple Joy Investments Ltd, HCA 1508/2011 (19 January 2012), at paragraphs 27-31 per Deputy High Court Judge Au-Yeung (as she then was).

(ii) The lateral limits of the Pitch

68.  It is not in dispute that the Pitch abutted the Stone Bannister on one side. As earlier mentioned, the hawker licence granted to Madam Yu dated 21 October 1993 provided that the “authorised pitch size” was “1200 mm x 900 mm”.  Jimmy Chu gave evidence in court that the width of the Pitch was about 4½ feet, not taking into account a further extension of about ½ foot due to the presence of a working table.  His evidence regarding the dimensions of the Pitch does not appear in his four witness statements. Further, when evaluating Jimmy Chu’s oral evidence, one should bear in mind the fact, as stated in his supplemental statement dated 22 March 2013, that he had moved out from On Hing Terrace for more than 40 years (ie before 1973) and he seldom assisted in his parents’ hawker stall, although he did mention (in his 3^rd supplemental statement which he repeated in court) that he sometimes slept at his parents’ stall when he was working as a “coolie”.  He confirmed that it was his parents who ran the hawker stall business and, after his father’s death, Chu Kwok Chung at one stage assisted his mother in running the hawker stall business.  It seems clear to me that Jimmy Chu’s evidence regarding the dimensions of the Pitch is, at best, a rough estimate, and I am not prepared to accept his evidence regarding the width of the Pitch.

69.  In the absence of any other reliable evidence regarding the lateral width of the Pitch, I consider the safe course to take is to proceed on the basis of the authorised width of the pitch.  I therefore find as a fact that the lateral width of the Pitch was 900 mm.

(iii) The lower extremity of the Pitch

70.  Based on their analysis of two photographs of D1’s Old Hawker Pitch which apparently were taken in the 1970s (Exhibits D1 and D2), the plaintiffs’ expert (Leung Shou Chun) opined that the Pitch at its lower extremity started from the middle of the 3^rd tread of the Lower Steps, while the 1^st defendant’s expert (Henry Chan) and the 2^nd and 3^rd defendants’ expert (Joseph Wong) opined that it started from the riser of the 4^th tread of the Lower Steps.  Their evidence seems to me to be more reliable than the recollections of the factual witnesses (Tsang Lai Lun, Tsui Ling Mui and Jimmy Chu).  The difference in the respective evidence of the experts is minor and I would accept the evidence of Henry Chan and Joseph Wong that the Pitch at its lower extremity started from the riser of the 4^th tread of the Lower Steps.

(iv) The upper extremity of the Pitch

71.  Based on the same photographs, Leung Shou Chun and Joseph Wong opined that the Pitch at its upper extremity was at the riser of the 8^th tread of the Lower Steps, while Henry Chan opined that it was at the riser of the 9^th tread of the Lower Steps.  The difference comes down to one tread width which, as earlier mentioned, is about 11 inches.

72.  If one proceeds on the basis that the Pitch at its lower extremity started from the riser of the 4^th tread of the Lower Steps, it would mean that the length of the Pitch would be about 44 inches (1,118 mm) or 55 inches (1,397 mm), depending on whether one accepts the evidence of Leung Shou Chun and Joseph Wong or that of Henry Chan regarding the position of the upper extremity of the Pitch.  Although the former scenario would be closer to the “authorised” length of the Pitch (1,200 mm), Jimmy Chu has pointed out in paragraph 20 of his supplemental statement that in the old days it was customary practice for hawkers to occupy and run their businesses beyond the licensed areas.   While such practice is, strictly speaking, not legal, it may well reflect the true position on the ground. As I understand it, the experts’ analyses are based primarily on their assessment of the position of an upper vertical pole as seen on the photographs.  I have to say, however, that I am unable to reach any firm view from my own examination of the photographs (with the assistance of various imaginary lines marked by the experts on various enlarged versions of the photographs).  I bear in mind Jimmy Chu’s evidence, which I accept, that he sometimes slept on a working table in D1’s Old Hawker Stall. It is unlikely that a working table with a maximum length of 44 inches would be sufficient to accommodate Jimmy Chu for this purpose.  Taking into account all these matters, I would accept the evidence of Henry Chan and find that the Pitch at its upper extremity was at the riser of the 9^th tread of the Lower Steps.

Licences granted by plaintiffs

73.  The plaintiffs have raised an alternative case that the occupation of D1’s Old Hawker Stall by Jimmy Chu’s parents was pursuant to a licence (implied and/or express) given by the plaintiffs, which licence was terminated by the plaintiffs’ letter dated 28 October 1994.  There is, however, no clear evidence of any licence ever granted by the plaintiffs to Jimmy Chu’s parents unless such licence is to be regarded as having been granted through the Government’s licensing system (as to which see the analysis above). The plaintiffs rely on a letter dated 5 November 1992 in support of their case of express licence, but that letter was written to “Orchid Florist” (ie Madam Wu).  I am unable to read that letter as evidence that the occupation of D1’s Old Hawker Stall by Jimmy Chu’s parents was pursuant to any licence granted by the plaintiffs.  In all, I am unable to accept the plaintiffs’ alternative case of licence.

Illegality

74.  The plaintiffs also argue that Jimmy Chu’s case of adverse possession should not be upheld in any event in view of various contraventions of regulations and licence conditions by his parents, namely (i) parting with possession of part or the whole of their allocated pitch for use by Madam Lai and/or Madam Wu, (ii) joining D1’s New Hawker Stall with D2’s New Hawker Stall, and (iii) carrying on business exceeding the authorised pitch size.

75.  The allegation mentioned in (ii) above, ie joining D1’s New Hawker Stall with D2’s New Hawker Stall, related to a period after 1985 and is not relevant for the present purpose.

76.  The issue of illegality was dealt with by Mr Wong Yan Lung SC and Mr Chan Chi Hung SC relatively briefly, and Mr Wong Yan Lung SC told the court that it was more relevant to the position of the 2^nd and 3^rd defendants (which the court no longer has to consider in view of the settlement reached) than that of the 1^st defendant.  I have been referred to various authorities including R(Best) v Chief Land Registrar [2015] EWCA Civ 17; Chung Man Yau v Sihon Co Ltd [1997] HKLRD 1221; and R(Smith) v The Land Registry (Peterborough Office) [2009] EWHC 328 (H H Judge Pelling QC), 2011 QB 413 (CA).

77.  The law on the consequence(s) of illegality on a claim of adverse possession is not yet settled.  As mentioned in Jourdan QC and Radley-Gardner, Adverse Possession, 2^nd Ed, at paragraph 7-140, a number of possible approaches could be taken:

(1) a person should not be granted a remedy where he has to rely directly on unlawful conduct to succeed;

(2) an alternative approach would be to consider whether the policy behind the statutory prohibition in question would be infringed if a squatter was allowed to rely on acts committed in breach of the prohibition in support of a claim to title by adverse possession.

78.  The nature and seriousness of the unlawful conduct in question would be relevant if the bar to making title by adverse possession is based on public policy considerations: see the discussion in Chung Man Yau v Sihon Co Ltd [1997] HKLRD 1221 (relating to a claim for loss of earnings from unlicensed hawking), at 1226-1228 per Mortimer VP, 1228-1229 per Godfrey JA, and 1229-1230 per V Bokhary J.

79.  In view of the conclusions that I have reached on other issues above, the present case is obviously not the right occasion for me to conduct a detailed examination of this difficult area of the law.  I would merely say I am far from satisfied that the nature and seriousness of the unlawful conduct complained of in the present case would be sufficient to bar Jimmy Chu’s case on adverse possession had I come to the conclusion that it is otherwise well founded.

Proposed amendment of the re-re-amended defence and counterclaim of the 1^st defendant

80.  In view of the finding above regarding the position of D1’s Old Hawker Stall, I would not allow the 1^st defendant’s proposed amendment to paragraph 11(2)(nn) of the re-re-amended defence and counterclaim of the 1^st defendant (a draft of which was provided by Mr Chan Chi Hung SC to the court in the course of the trial) seeking to extend the 1^st Defendant’s Area to cover the lower 3 steps of the Lower Steps.

CONCLUSION

81.  In all, I allow the plaintiffs’ claims against the 1^st defendant, and make an order in terms of paragraph (1)(e) of the prayer for relief in the re-re-re-amended statement of claim, and give liberty to the plaintiffs to apply for further or other relief mentioned in the prayer for relief.  I dismiss (i) the 1^st defendant’s counterclaims against the plaintiff and the 2^nd and 3^rd defendants respectively, and (ii) the 2^nd and 3^rd defendants’ counterclaim against the 1^st defendant.

82.  I also make the following costs order on a nisi basis:-

(1) the 1^st defendant shall pay to the plaintiffs their costs of the action and the counterclaim, including all costs previously reserved by me, with certificate for 2 counsel;

(2) the 1^st defendant shall pay to the 2^nd and 3^rd defendants their costs of defending the 1^st defendant’s counterclaim against them;

(3) the 2^nd and 3^rd defendants shall pay to the 1^st defendant his costs of defending the 2^nd and 3^rd defendants’ counterclaim against him up to the commencement of trial only;

(4) all such costs are to be taxed if not agreed;

(5) the 1^st defendant’s own costs are to be taxed in accordance with Legal Aid Regulations.

83.  Lastly, it remains for me to thank counsel for the assistance that they have rendered to the court.