WOO HOI LUN AND OTHERS v. LAI YUNG

DCCJ2312/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2312 OF 2012

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JUDGMENT

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BACKGROUND

1.  This is a case of adverse possession. The dispute relates to the lots of land in DD 113, Yuen Long, New Territories, Hong Kong.  They include the following:-

(i) Sections F, I, J & K of Lot No 317 (“the Land A”); and

(ii) Remaining Portion of Lot No 314; and Sections AB, G, and H of Lot No 317 (“the Land B”).

2.  The plaintiffs seek vacant possession, rent in arrear and mesne profits of the Land A and the Land B (collectively as “the said lots”).  The defendant (“Madam Lai”) defends and counterclaims that she had acquired possessory title of the said lots by adverse possession.

3.  The acquisition of the said lots by the plaintiffs is not disputed.

4.  In the 1960s, the registered owner of the said lots was Wu Ka Tai, deceased, the grandfather of the plaintiffs (“the Grandfather”).

5.  The Grandfather died on 18 February 1970.  Wu Sing Yu, deceased, father of the plaintiffs (“the Father”) inherited the said lots in 1971 and 1974.

6.  By gift from the Father in 1995 and 1997, the plaintiffs became the registered owner of the said lots as tenants in common in equal share.

7.  In about 1966, the Grandfather rented the said lots to Madam Lai upon an oral tenancy agreement for agricultural use.  Madam Lai has been occupying the said lots since 1966.  The parties however give different accounts of events after the decease of the Grandfather.

THE PLAINTIFFS’CASE

8.  It is the plaintiffs’ case that the oral tenancy arrangement continued till 2005 with annual rents duly paid by Madam Lai in the following manner:-

(i) Madam Lai kept on duly paying annual rent to the mother of the plaintiffs (“the Mother”) after the death of the Grandfather.  In the early 1980s, the Madam Lai would pay annual rent to the Mother at her residence in the sum of $500.

(ii) It is however common ground that in 1978, Madam Lai requested the Father to sign a written tenancy agreement to facilitate her application for poultry licence but was refused by the Father.  The plaintiffs say Madam Lai kept paying rent after the incident. Madam Lai says she did not.

(iii) In 1985, the Mother instructed Madam Lai to pay the annual rent to one Madam Chan for collection who was operating a Chinese medicine shop.

(iv) By 2004, the annual rent has increased to $3,200.

9.  On 10 March 2005, Madam Lai went to meet Wu Hoi Lun, who is the 1^st named plaintiff (“Mr Woo”) at his home (‘the Meeting”).  During the Meeting, Mr Woo’s wife (“Mrs Woo”) was also present.  They signed a written tenancy agreement of the Land A for two years from 1 March 2005 to end of February 2007 at an annual rent of $1,500 (“Tenancy Agreement”) and another surrender agreement to effect the surrender of the Land B (“Surrender Agreement”). 

10.  During the Meeting, the conversation between the parties was recorded. It is transcribed into a formal transcript (“the transcripts”) prepared by one Miss Lau of a professional service company.

11.  After the termination of the Tenancy Agreement, the plaintiffs’ case is that Madam Lai had requested but failed to secure a new tenancy agreement with the plaintiffs and had remained in wrongful occupation of the said lots.

12.  The plaintiffs further say that Madam Lai had through the plaintiffs in an alleged capacity as tenant sought an extension of time for complying with the Planning Department’s notice with respect to illegal structures on the Land A.

13.  The plaintiffs claim against Madam Lai for vacant possession, rent in arrear, and mesne profits in respect of the said lots.

THE DEFENDANT’S CASE

14.  Madam Lai claims that she has been in adverse possession of the said lots since 1971.  She did not pay rent to anybody since the death of the Grandfather.  By way of defence and counterclaim, Madam Lai claims that she has been in adverse possession of the said lots for over 20 years at around 1991.  Any title that the plaintiffs might have over the said lots was extinguished by operation of section 17 of the Limitation Ordinance, Cap 347.  Madam Lai seeks a declaration that the plaintiffs' right to recover possession was time-barred.

15.  Madam Lai disputes the accuracy of the transcripts provided by the plaintiffs.  In her testimony, she said she never had a meeting with Mr Woo and his wife.  She was urged in signing the Tenancy Agreement and she did not even know she signed the Surrender Agreement.

16.  It was pleaded by Madam Lai that:-

(i) It was the plaintiffs who demanded that Madam Lai should enter into a tenancy agreement with them over the Land A.

(ii) Madam Lai was under the mistaken belief that the plaintiffs had valid title over the Land A so that she entered into the Tenancy Agreement.

(iii) In March 2005, the plaintiffs no longer had any title to purport to grant the Tenancy Agreement so that it would have been void of any legal effect and/or liable to be set aside.

ISSUES

17.  It is Madam Lai’s case that her possession of the said lots commenced before 1 July 1991.  For the purpose of this action, the period of adverse possession required by the Limitation Ordinance (Cap 347) is 20 years: see ss. 7, 17 and 38A of Cap 347.

18.  There is no doubt that the Madam Lai has been in factual possession of the said lots for more than 20 years since 1966. 

19.  The issue of the trial are essentially as follows:-

(i) whether at all material times between 1971 to 2005, annual rents were duly paid by Madam Lai to the plaintiffs and/or their predecessors-in-title or Chinese Medicine shop owner for the use of the said lots;

(ii) whether the transcripts prepared was a correct and accurate record of the Meeting;

(iii) whether Madam Lai had surrendered possession and the plaintiffs had recovered possession of Land B;

(iv) whether Madam Lai had the intention to possess the said lots; and

(v) the damages payable by Madam Lai for her occupation of the said lots if adverse possession is not established.

RELEVANT LEGAL PRINCIPLES

20.  A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess. 

21.  Factual possession signifies an appropriate degree of physical control. Everything must depend on the particular circumstances, but broadly, what must be shown as constituting factual possession 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: see Powell v McFarlane (1979) 38 P & CR 452 per Slade J at 470-471.

22.  An intention to possess 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 process of the law will allow: see Wong Tak Yue v Kung Kwok Wai & Anor (No 2) (1997-1998) 1 HKCFAR 55, at 68E-F, endorsing statement made by Slade J in Powell v McFarlane & Anor (supra) at pp 471-472.

23.  Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism.  The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they may deserve.  Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight: see Wong Tak Yue v Kung Kwok Wai & Anor(supra) per Li CJ at p69.

24.  The parties do not dispute that the burden is on Madam Lai to establish both factual possession and intention to possess in relation to the said lots.  There is absolutely no legal burden on the plaintiffs to disprove the case of Madam Lai: see Civic Limited v 余綺妙 & Anrs, HCA 225/2011 (unreported, 28 March 2014) at §27.

WITNESSES  

25.  The facts which give rise to the action are uncomplicated.  It turns on the credibility of the witnesses.  In assessing witnesses’ credibility, the court should consider the totality of their evidence against any documentary evidence.

26.  The plaintiffs call a number of factual witnesses.  They include Mr Woo and his wife, the Mother and Madam Chan who operated the Chinese medicine shop.

27.  Madam Lai gives evidence for her own case.

28.  On balance, I prefer the evidence of the plaintiffs’ witnesses who gave accounts that were generally consistent and were unshaken in cross-examination on the core issues. The same could not be said of Madam Lai. I find her evidence to be inherently inconsistent and unreliable.

29.  I find that there is nothing inherently improbable in the plaintiffs’ case.  Where there are inconsistencies between the plaintiffs’ evidence and that of Madam Lai, I prefer the evidence of plaintiffs’ witnesses.

DISCUSSION

Whether between 1971 to 2005 annual rents were duly paid by Madam Lai for the use of the said lots

After the death of the Grandfather

30.  The Mother testified that after the Grandfather died in 1970, the Father was responsible to handle the tenancy matter with Madam Lai.  Madam Lai had approached the Father and asked if the tenancy of the said lots be continued.  The Father agreed and indicated that he preferred the rent to be in cash to crop.  From that time onwards, the rent was paid in cash instead of crop.  At the end of each year, Madam Lai turned up punctually to the Father to pay the rent.  She brought with her flowers and chickens when she made the payment.  The Mother remembered that the yearly rent was $500.  It increased to $3,200 in 2005.  The amount of rent was decided by the Father.

31.  The Mother stated that the Father worked as the village representative for 25 years.  The duty as a village representative was unpaid.  The Father relied on the rent for living.

32.  It is stated in Madam Lai’s statement that nobody from the Woo’s family demanded any rent nor crop for the said lots from her since the death of the Grandfather.  However, during cross-examination, her evidence was muddled up.

33.  Madam Lai accepted that she must pay rent for the said lots to maintain her farm.  She admitted that she would even borrow money from relatives to pay for the rent.  She further admitted that she had therefore paid rent to the plaintiffs’ family during the 1980s and the 1990s.  She relied on the said lots to earn a living for a family and support her six children to study in school.  She paid 400 catties of crop for each area-unit (四百斤，一斗種).  She accepted that the area of the said lots amounted to 8 area-units. The rent was therefore $3,200 (8 area units x 400)[1]. When being asked when she paid this amount of rent, she replied that she could not remember.  She paid the rent to Madam Cheng who was the Grandmother, the filled wife (填房).  It was in the form of crop. Later, the rent was paid in cash every two seasons per year, being $1,600 for each season. She had not paid since the death of Madam Cheng.

34.  When Madam Lai was asked if she had paid rent during the 40 years on the said lots, she answered that she had only not paid rent in the last 10 years.  The payment of rent impressed deeply on her memory. She explained that because it was about money.

Mr Woo’s wedding in 1978

35.  It is common ground that at or around 1978, Madam Lai was intending to erect certain poultry raising structures on the said lots which would require government approval.  A written tenancy agreement was a prerequisite to enable Madam Lai to approach the government.  Therefore Madam Lai visited the Woo family at their residence to ask for the signing of a formal written tenancy agreement and for assistance in applying for government approval.  In order to persuade the Woo family to agree with the above requests, Madam Lai had tendered a wedding gift in the sum of $2,000 to Mr Woo for his wedding. 

36.  The Mother testified that $2,000 as a wedding gift was a big sum in those days.  The guests usually paid $30 to $100 as gift.  Madam Lai wanted the Father to give her a written tenancy agreement to build structures for a poultry licence. It might be inconsistent with the agricultural use of the land.  The Father decided not to sign any written tenancy agreement because there might be legal consequences of changing the land use. The Mother returned the said wedding gift to Madam Lai.

37.  Madam Lai stated in her witness statement that the Father refused to sign her any tenancy agreement because she had neither paid the rent nor crop to the Woo since the death of the Grandfather.  The Father further requested her to leave the said lots in 1978. Madam Lai ignored the request and continued to stay there.

38.  Madam Lai admitted that she suffered from grave financial hardship during the 1980s. Had the application of the poultry licence been successful, she could get the interest free loan from the government. Nevertheless, she went ahead to raise poultry after the incident.  She admitted that she was afraid that the Woo family would evict her from the said lots which would severely affect her family.  She has six children with one of them being handicapped.

Payment of rent to the Chinese medicine shop in 1985

39.  The Mother explained she often visited her second son in Sweden in 1985.  She and the Father also took frequent trips to Macau and China.  Therefore, she asked Madam Lai to pay the rent to Madam Chan in the Chinese medicine shop.  It was more convenient for Madam Lai to pay at the shop because she often went there and had tea.

40.  In 2004, the Woo family requested Madam Lai to leave the said lots.  However, Madam Lai refused to do so.

41.  Madam Chan testified that her Chinese medicine shop was within the vegetable market. She said Madam Lai went to the vegetable market daily.  Madam Lai also liked to go to the restaurant opposite to the Chinese medicine shop to have tea. Therefore it was more convenient for Madam Lai to pay the rent at her shop than making payment to the Woo’s home. 

42.  Madam Chan stated that she collected rents annually for the Mother from Madam Lai in 1985 to 2004.  She remembers that Madam Lai paid $3,200 since 1985 till 2004.  However, she was told by the Woo family to return the rent in 2004 after she had received it from Madam Lai.  Madam Chan did so accordingly.

43.  Madam Lai was asked if she had paid the rent to the Chinese medicine shop.  At first, she said she probably did when she delivered the vegetable to the market. Later she said that since it happened decades ago, she cannot remember now.  She admitted that the shop was located at the market of the village where she sold her poultry and had tea. 

Analysis of evidence

44.  Because it was not evidenced by any documents for the oral tenancy entered in 1966, an assessment of the witnesses’ credibility is crucial when resolving the dispute.

45.  As noted from the testimony of Madam Lai, her evidence is inconsistent with her statement on the key issue as to whether rent had been paid.

46.  Counsel for Madam Lai accepts that Madam Lai had made answers that are inconsistent with her statement.  He relies on the case of Sik Koon Fat & Ors v Mok Yau Tak, HCMP 3555/1994 (unreported) and Chang Shun Tak & Ors v Leung Sun Fat & Ors, HCA 13809/1997 (unreported) to make the proposition that given the background of the case and the recollection of the Madam Lai on the detailed events that happened decades ago, discrepancies are only to be expected.  The court should take into account the whole circumstances of the case and any contemporaneous documentary evidence to find out the truth.

47.  In finding out the truth if Madam Lai had paid rents to the Woo family during the material time, I bear in mind the principles laid down by Chung J (as he then was) in Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd and Ors, HCA765/2002, (13.8.2005).  They are as follows:-

“12. There are two objective tests for assessing a witness’s credibility regarding a matter to which he has testified:-

(a) whether that part of his testimony is inherently plausible or implausible;

(b) whether his testimony is contradicted by other evidence which is undisputed or indisputable (an example often given of such evidence is contemporaneous documents).

Further, where it is shown that a witness has been discredited over one or more matters to which he has testified (using the above tests), this fact is relevant to the assessment of his overall credibility.  Likewise, regard may be had to a witness’s motive for deliberately not giving truthful testimony.  For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest.”

48.  I also bear in mind the reminder in Wong Tak Yue that the self-serving statements made by Madam Lai as to what was her intention should be viewed with skepticism.

49.  I have already carefully considered the parties’ final submissions when assessing credibility and reliability.  I do not propose to set out those submissions in full. 

50.  I appreciate that Madam Lai is an old lady of 84 years old with a humble background as a farmer for decades.  She did not keep a record on her own.  It is totally understandable that she only managed to remember by the events that had happened.  She is unable to relate the events by reference to calendar years.  However, given all the allowance for her background, I still find that her evidence has been discredited on so many matters that I cannot put reliance on her.

51.  First, Madam Lai made a number of admissions of payment of rents which is totally contradictory and fatal to her own case.  I accept her admissions in court to be the truth.  I attach full weight to such admissions. I find that she would not risk her livelihood by not paying rent to the Woo family after the death of the Grandfather. The said lots had been very important to support her family.  Here are some of the examples of her admission:-

(i) she paid the rents to the Woos family in the 1980s and 1990s.  She would even borrow money to pay for the rent;

(ii) she had only not paid rent in the last 10 years for the past 40 years.  This saying supports the plaintiffs’ case that her last payment of rent of $3,000 was made during the Meeting in 2005;

(iii) she probably paid rent to Madam Chan when she delivered the vegetable to the market but she could not remember now since it happened decades ago; and 

(iv) she had paid the rent to Madam Cheng, who was the filled wife of the Grandfather, firstly in form of crop and then $1,600 for two seasons per year. She could not remember the time now. Counsel for Madam Lai submitted that it must relate to incident happened in 1960s. On the other hand, Counsel for the plaintiffs suggests that Madam Cheng that Madam Lai had referred to was in fact the Mother whose surname is Cheng.  I understand that Madam Lai has difficulty on recollection about the dates of events.  However, I find that the yearly rent of $3,200 per year in the time of 1960s is illogical. I find this piece of evidence just highlights Madam Lai’s unreliability.

52.  Secondly, Madam Lai’s evidence of not making payment of rents since 1971 was inconsistent with the contemporaneous record of a sound recording made during the Meeting. I shall deal with this in more detail in the paragraphs below.

53.  Adopting the approach of Star Glory Investment Ltd (supra), I reject Madam Lai’s evidence that she did not pay any rent to the plaintiffs and/or their predecessors-in-title or Chinese medicine shop owner for the use of the said lots since the death of the Grandfather. 

54.  On the other hand, I find the evidence of the Mother and Madam Chan to be forthcoming and reliable. 

55.  First, the Father worked as a village representative for 25 years.  It was an unpaid duty.  The Father relied on the rent for living.  He retired in 1995.    As the rent was the only income for the Father, it is totally inconceivable that the Father would forget what land that he owned and fail to demand the rent from Madam Lai. I reject Madam Lai’s evidence in this regard. 

56.  Secondly, it is the plaintiffs’ case that Madam Chan helped the parents of Mr Woo to collect rent from the Madam Lai since 1985. Madam Chan is an independent witness.  She knew Madam Lai and the Woo’s family.  In my view, her evidence was particularly useful and impressive.  There is no evidence to indicate that she has to assist or implicate either party.  I accept that she did receive the rent from 1985 to 2004 for the Mother, though I find her memory on the amount of rent she collected as $3,200 in 1985 is incorrect. 

57.  Due to the reasons aforesaid, I come to the conclusion that Madam Lai had duly paid the annual rents for the use of the said lots in 1971 to 2005.   

58.  Given I have found that Madam Lai had paid rents at all material times between 1971 to 2005, she must have known that the plaintiffs have valid title over the Land A when she entered into the Tenancy Agreement in 2005.  I find that she was not under any mistaken belief as pleaded in her defence.

The Meeting on 10 March 2005

59.  It is common ground that the squatter control unit had approached Madam Lai in or about March 2005 in relation to the demolishing of the illegal structures on the Land A.  According to Madam Lai’s understanding with the squatter control unit, she needed a written tenancy agreement in order that she could keep the structures on the Land A or they would be demolished within two months’ time[2].

60.  The Mother testified that Madam Lai had visited her home asking for a written tenancy agreement in early March 2005.   She also received notice from the government about the illegal structures before she was told by Madam Lai.  She then asked Madam Lai to go to Mr Woo’s home for discussion.  As a result, Madam Lai and Mr Woo had the Meeting at Mr Woo’s home.

61.  Mr Woo stated that he did not receive any letter from the district office in relation to demolition of the structures on the Land A prior to the Meeting.  In this respect, I find that Mr Woo’s recollection was inaccurate.  Not only was it contradictory to the Mother’s evidence.  As revealed from the transcripts[3], it indicated that he did receive a letter from the district office.

62.  Counsel for Madam Lai suggested that it should be the Woos who approached Madam Lai in 2005 and not the vice versa. I find that nothing turns on such a difference.  The Meeting was triggered off by the squatter control unit when it dealt with the situation of illegal structures on the Land A.  Whether it was on Madam Lai or Mr Woo’s initiative to meet at Mr Woo’s home, I find that it is unimportant. 

63.  During the Meeting, Mr Woo and Madam Lai had signed a written tenancy agreement of the Land A for two years from 1 March 2005 to end of February 2007 at an annual rent of $1500 and a surrender agreement to surrender the Land B.  Mr Woo recorded the conversation with Madam Lai on a tape.  It was alleged that the tape recorded:-

(i) Madam Lai admitted to be a tenant of the plaintiffs and had been paying rent to the plaintiffs since 1980s;

(ii) Madam Lai agreed to unconditionally surrender the Land B;

(iii) Madam Lai paid to Mr Woo the rent in the sum of $3,200 for the year 2004; and then in the sum of $3,000 for the two-year term of the Tenancy Agreement from 2005 to 2007.

64.  Mr Woo and Mrs Woo denied that they urged Madam Lai to sign the Tenancy Agreement during the Meeting in their testimony. Mr Woo maintained that the purpose of signing the Tenancy Agreement was just to help Madam Lai keeping her illegal structures on the Land A. 

65.  In my view, his aim of setting up the recording in the Meeting was to collect the evidence for his own purpose. I find his assertions of helping Madam Lai to be not totally correct.  His purpose must include obtaining a written proof to confirm that Madam Lai was a tenant of the Land A.  In my judgment, even if it was the case that Mr Woo urged Madam Lai to sign the Tenancy Agreement, which was denied by Mr Woo,  it is not inconsistent with my finding of facts that Madam Lai had paid the rents to the Woo family at all material times between 1971 to 2005. 

66.  In this regard, Madam Lai claimed in her witness statement that she was repeatedly urged in signing the Tenancy Agreement.  This is inconsistent with her pleaded case that she entered into the Tenancy Agreement under a mistaken belief that the Woos had valid title over the Land A.

67.  The basic objective of pleadings is fairly and precisely to inform the other party in the litigation of the pleading party’s case so that proper preparation is made possible. It is not allowed for unpleaded issues to be slipped in: see Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663 at §21 and Wing Hang Bank Ltd v Crystal Jet International Ltd [2005] 2 HKLRD 795 at p 799B-D.  Madam Lai should have sought amendments to her defence but she failed to do so.  I would not consider the unpleaded case of Madam Lai that she was urged by Mr Woo and his wife to sign the agreements.

Whether the transcripts prepared was a correct and accurate record of the Meeting

68.  Miss Lau, who is a Hakka translator working in a professional service company, transcribed the tape recording into the transcripts.  She confirmed that her transcription is true and correct to the best of her knowledge.

69.  Before the commencement of the trial, Counsel for Madam Lai confirms that the transcript could reflect what had been spoken during the conversation.  However, he seeks to argue that the transcripts are not exactly accurate.  Here are the  observations made by Counsel for Madam Lai that the transcripts were  unreliable:-

(i) In one of the dialogue made by Mr Woo, it was transcribed as“我阿媽過世的時候…” It is an obvious inaccurate as the Mother is still alive; and

(ii) It is undisputed that villagers address Madam Lai as榮嫂.  In the transcript, some parts of the content had referred her as林嫂.

70.  The transcripts contained obvious typographical errors (林嫂) and mis-transcriptions (the Mother’s death).  In my view, it could have easily picked up by merely reading the transcripts.  It reflects that Miss Lau could have been more careful with her transcription.

71.  As regards to the  accuracy of the transcripts, the solicitors for Madam Lai confirmed to the court in the pre-trial review that Madam Lai would only dispute pages 16-17 of the said transcripts[4] (“the disputed parts”).  It follows that Madam Lai accepts that the transcripts are generally accurate except for the disputed parts. The disputed parts of the conversation made by Madam Lai is as follows:-

“我也幾十歲，一樣還一樣，這些去年的。…去年的租金，三千二百，由八幾年交這個數，當時你爸爸媽媽 (合糊不清)，一直到現在你說千五”

72.  It is agreed by the parties that the disputed parts of the sound recording should be interpreted by the court’s Hakka interpreter in the trial. Here is version made by the court Hakka interpreter:-

“我都幾十歲，我一樣還一樣，依啲都舊年嘅。…舊年哥啲屋租錢 (四個字，但聽不清)，八幾年叫我搞/交(數字聽不清) ，你亞爸你亞媽(數字聽不清) ，至到宜家你話千五”

73.  There are some slight differences between the two translations. However, I would not conclude that Miss Lau’s transcription is inaccurate.  It is not uncommon that different people would have their own style and use of words in the translation process.

74.  Further, having considered the whole conversation as recorded in the transcripts, I find that the general content is logical and makes sense.

75.  In my judgment, I accept the transcripts as a true record of the conversation during the Meeting.

76.  In view of the impartiality of the court Hakka interpreter, I adopt her translation of the disputed parts for the purpose of this trial (refer to paragraph 72 above).

77.  The disputed parts of the transcripts apparently show that Madam Lai had paid a certain amount of rent in the year immediately before 2005 and in the 1980s.  Then she was told by Mr Woo to pay $1,500 in the year of 2005.

78.  Mr Woo testified that when Madam Lai said“依啲都舊年嘅。…舊年哥啲屋租錢”, she handed him $3,200 and said that was the rent of last year.

79.  I find Mr Woo’s evidence on this disputed parts ran consistently with the flow of the conversation.  I accept that Madam Lai paid him $3,200 when she uttered those lines.  Therefore, I find that she paid the rent of $3,200 for 2004 during the Meeting.

80.  Apart from the disputed parts, each party has put forward their ways of interpretation of the transcripts. However, most of the disputes do not involve the determination of the core issues.  In these circumstances, it is not incumbent upon the court to make finding of facts of each and every interpretation of the transcripts.

Weight to be attached to the transcripts

81.  As the weight of an admission depends on the circumstances under which it was made, these circumstances may always be proved to impeach or enhance its credibility. Thus, the admission may be shown by the party against whom it is tendered to be untrue; or to have been made under a mistake of law or fact; or to have been uttered in ignorance, levity or an abnormal condition of mind: see Phipson on Evidence, 18^th ed at §4-13 on page 96.

82.  Madam Lai claimed in her written statement that she and Mr Woo had talked about a lot of things in the Meeting including the lands in adjoining the said lots and their rent (not the rent of the said lots).  Counsel for Madam Lai submits that the alleged admission is ambiguous. If any mention of the rent within the transcripts of the tape, it must relate to the rent of other land adjoining the said lots.  Therefore Madam Lai was not saying that she paid rent with respect to the said lots before 2005 as recorded in the transcripts. He submits that the alleged admission is capable of two equally possible views. 

83.  If his [the possessor’s] acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words 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: see Powell v MacFarlane (supra) per Slade at p 472.

84.  Madam Lai bears the burden to prove that she had made it perfectly plain to the world at large by her actions or words that she has intended to exclude the owner as best she can.  If Madam Lai’s admission amounts to two equally possible views, it is inconsistent that she has the requisite intention to possess the said lots.

85.  Madam Lai was unaware of the recording by Mr Woo.  In my judgment, this is a contemporaneous record of Madam Lai in the Meeting. 

86.  I find that the transcripts support the allegations that Madam Lai had paid the rent of $3,200 for 2004. She also paid a certain amount of rent in the 1980s.  They are consistent with plaintiffs’ evidence.  Since these statements are against her interest, as laid down in Wong Tak yue (supra) at p 69, I would accord to them considerable weight.

87.  To avoid doubt, I would point out that I do not regard the transcript to be the only evidence in relation to the payment of rents made by Madam Lai. My findings were also based on the parties’ statements and their oral testimony in court. 

Whether Madam Lai had surrendered possession and the plaintiffs had recovered possession of  Land B

88.  Madam Lai stated in her statement that she had no idea that she signed the Surrender Agreement during the Meeting.

89.  From the transcripts of the taped conversation, I find that Madam Lai understood the whole course of what was happening to her[5]. She spoke coherently.  The accuracy of this relevant part of the transcripts is not in dispute.  

90.  Besides, Madam Lai can read her written statement and the transcripts during her testimony in court. There is no evidence that she did not read before she signed the agreements.  Therefore, I find that she had surrendered possession of the Land B orally as evidenced by the Surrender Agreement. 

91.  I agree with the submission by Counsel for the plaintiffs that it is inherently improbable that if Madam Lai had animus possidendi as alleged for so many years, she would have agreed to sign the Tenancy Agreement and paid the rents pursuant to thereto. In the same token, it beggars belief that she would have surrendered the Land B.

92.  I therefore find that the plaintiffs had recovered possession of Land B.

93.  For completeness, I note that Madam Lai has raised in the Reply to defence to amended counterclaim that the Surrender Agreement was void for lack of consideration. Both parties did not lead any evidence nor make any submission on this point. Given the findings of fact that I have made, it is not necessary to deal with this pleading point.

Whether Madam Lai had the intention to possess the said lots

94.  I am not satisfied that Madam Lai has discharged the burden of proof that she had the requisite intention to establish adverse possession of the said lots.  Here are my reasons.

Payment of rent from 1971 to 2005

95.  Given my findings on fact that Madam Lai had paid the rent throughout the period from 1971 to 2005, in my view, she was enjoying possession under a lawful title from the owners.  In that case, she never has the intention to exclude the Woo family.

Tenancy Agreement

96.  It is common ground that in 2005, the squatter control unit requiring Madam Lai to demolish the illegal structures on Land A.    According to the transcript, she said she was told by the squatter control unit that her illegal structures could be reserved on Land A if the owner of the land can give her a consent/contract.

97.  In this regard, I consider that Madam Lai’s act of showing the Tenancy Agreement to the squatter unit is inconsistent with her intention to exclude the owner.  The Tenancy Agreement clearly demonstrates to the world at large that the plaintiffs are the owner of the Land A and that Madam Lai is the tenant.  I consider that Madam Lai should be bound by this Tenancy Agreement and to the whole world that she accepted herself to use Land A as a tenant.

Payment of rent of $3,000

98.  As regards to the Tenancy Agreement, I accept that Madam Lai paid a total of $3,000 to Mr Woo at the Meeting as the rent for the two year tenancy starting from 2005.  I find that Madam Lai’s assertion of $3,000 as tea money to the squatter unit was a recent fabrication.  It did not feature in her pleading and witness statement.

99.  An intention to possess would not be established if the squatter was willing to pay rent if asked: see Wong Tak Yue (supra) per Li CJ at p 69F.

100.  Counsel for Madam Lai relies on the decision in J. A. Pye (Oxford) Ltd v Graham[2003] 1 AC 419 at p 438 in which Lord Brown-Wilkinson stated that there is no inconsistency if the squatters prepared to pay for their occupation of the disputed land if  they had been asked by the paper owner.  This did not indicate an absence of an intention to possess. 

101.  There is a divergence of law on the legal effect of the squatter to pay rent between the approach taken by the House of Lords and Court of Final Appeal. However, the contrary view in J.A. Pye (Oxford) Ltd does not represent Hong Kong law: see Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (No5), [2007] 5 HKC122 per Lam J at §§84 to 89.

Enclosure

102.  Madam Lai testified that she had fenced off the said lots. However, part of fences on Land B (Remaining portion of Lot 314) was damaged and washed away by flood over the years.  She marked that area on a plan (exhibit D1).  

103.  During the final submission, Counsel for Madam Lai fairly abandons the claim on the part marked on D1.  However, he argued that animus possidendi could be inferred from her enclosure of the rest of the said lots (excluding the area marked green on plan D1). 

104.  In my view, enclosure alone is not a decisive factor for the inference of animus to be drawn. Therefore the enclosure point does not advance Madam Lai’s case: see Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (No 5) [2007] 5 HKC 122, p 141-142 at §83 by Lam J and Yu Kit Chiu and Ors v Chan Shek Woo, DCCJ 5488 (22.3.2010) by Chan J at §59, affirmed on appeal by the Court of Appeal in CACV 137/2010 (18.2.2011).

105.  The Counterclaim is dismissed.

The damages payable by Madam Lai for her occupation of the said lots if adverse possession is not established

106.  In view of my findings, Madam Lai has not been able to establish that she has been in adverse possession of the said lots.  I will accordingly make an order for Madam Lai to deliver up vacant possession of the said lots to the plaintiffs within six months from the date of service of the order to be drawn up pursuant to this judgment.  This six months’ period has been agreed by the parties.  Mesne profits is payable at $1,500 per month up to delivery of vacant possession of Land A to the plaintiffs. 

107.  It is not in dispute that Madam Lai had not paid rent since 1 March 2007 after the termination of the Tenancy Agreement.  The amount of mesne profit claimed is based on the rent of $1,500 per year as agreed under the Tenancy Agreement.  The plaintiffs are therefore entitled to mesne profits from 1 March 2007 to 20 October 2014 in the sum of $11,457 with interest from the date of the writ until payment at judgment rate.   

108.  I will further make a costs order nisi that Madam Lai is to pay the plaintiffs' costs of the original action and of the Counterclaim, with certificate for counsel, to be taxed if not agreed. 

109.  Lastly, I thank counsel on both sides for their helpful assistance in this matter.

( Amy Chan ) Deputy District Judge