WONG YAT WANG v. KAM ON PROPERTY CONSULTANTS LTD AND ANOTHER

DCMP 1215/2021

[2023] HKDC 1100

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1215 OF 2021

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BETWEEN

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DECISION

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1.  This is the hearing of the Amended Originating Summons issued on 9 June 2022 (the “Amended OS”) in which the Plaintiff claims for, inter alia, declaratory relief in relation to his adverse possession of the Remaining Portion of Lot No. 1233 in D.D. 19, Tai Po, New Territories, Hong Kong (“the Lot”).

Background and Procedural History

2.  It is the Plaintiff’s case as set out in his affirmation that the Lot was first took over by his grandfather in 1950s whereas the Plaintiff moved into the Lot in 1993 and has since occupied it. He claimed that he carried out refurbishment to the Lot in 1992 and set up various utility accounts for the purpose of occupation. A brick wall around the Lot was erected in 2007 and the Plaintiff started paying the rate and government rent in 2013.

3.  In mid-2020, the Plaintiff received a letter informing him that the Lot had been sold and the 1^st Defendant was the registered owner. The Plaintiff therefore commenced the present proceedings by way of Originating Summons (the “OS”) in March 2021 for a declaratory relief that he has acquired possessory title to the Lot by way of adverse possession for a continuous period of more than 12 years immediately prior to this action. The 1^st Defendant (who was the only Defendant at that time) filed the Acknowledgement of Service (the “AS”) indicating its intention to contest the proceedings.

4.  Some 15 months later, the Plaintiff amended the OS in June 2022 by adding Lai Yu Chuen as the 2^nd Defendant who acquired the Lot from the 1^st Defendant by the end of May 2021, i.e. after the OS was issued. The Amended OS together with the 1^st Affirmation of the Plaintiff were served on both the 1^st and 2^nd Defendants (collectively known as the “Defendants”), and both of them indicated in the AS that they did not intend to contest the proceedings.

Undisputed facts

5.  I would not repeat the factual evidence presented by the Plaintiff here save that I am satisfied with the occupation, improvement works and activities carried out by him since 1993 on the Lot. The Plaintiff provided ample of convincing and compelling evidence to show that both he and his wife have been in continuous and uninterrupted possession of the Lot by their exclusive occupation and use of the Lot for more than 12 years before this present proceedings. As such, I am also satisfied that the Plaintiff has established that both he and his family have possessed the intention to exclusively possess the Lot.

6.  By reason of the unchallenged evidence that the Plaintiff had been in exclusive possession of the Lot with the requisite intention to adversely possess it since around 1993, the Court finds a clear case of adverse possession is made out, and thus the 1^st and 2^nd Defendants’ title and rights to the Lot had been extinguished.

Costs

7.  The costs remains an issue for the Court to resolve.

8.  The Plaintiff contended that costs should follow the event and that the 1^st and 2^nd Defendants should bear the Plaintiff’s costs in this action. The Defendants on the other hand argued that the Court should make no order as to costs, save for the costs incidental to the amendment of the OS.

9.  The procedural history of this action was outlined in paragraphs 3 and 4 above and it is sufficient for me to highlight that the Defendants filed the Acknowledgment of Service to the Amended OS promptly and indicated to the Plaintiff and the Court that they did not intend to contest the case.

10.  In deciding whether the Plaintiff is entitled to his costs in an uncontested adverse possession case, one bears in mind that first, the Court has a wide and unfettered discretion on the issue of costs and the general rule is that costs should follow the event, meaning that the unsuccessful party shall pay the successful party’s costs.

11.  However, as discussed in Huang Chun Kan v Shine Excel Limited [2020] HKDC 592, HHJ Andrew Li explained why this “winner takes all” norm may be departed from in adverse possession claims as the squatter / trespasser gained a cause of action by his wrongdoing, i.e. dispossessing the rightful or registered owner from the land who committed no wrong against the squatter.

12.  The registered owner’s possessory title can only be extinguished by a squatter upon the expiry of the limitation period. Therefore, “the essence of an adverse possession claim is that any cause of action the registered owner has against the squatter has become time-barred” see §59 of Huang, supra.

13.  When we take a step back to consider the basic principle of possession under the common law, we can understand why the Court should always be careful in making costs orders in adverse possession cases, whether in the absence of the registered owners or not.

14.  The relevant principles of adverse possession were succinctly summarized in Powell v McFarlane and Anor (1979) 38 P & CR 452 where Slade J said (i) in the absence of evidence to the contrary, the owner of land with paper title was deemed to be in possession, and the law would thus, establish a title through him; (ii) a claimant to possession with no paper title, must show both factual possession and the requisite intention to possess; (iii) factual possession signified as appropriate degree of physical control and it must be a single and conclusive possession and thus an owner and an intruder could not both be in possession of the land at the same time and, accordingly the acts constituting the sufficient degree of exclusive physical control must depend on the circumstances; and (iv) the animus possidendi was also necessary to constitute possession and involved 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, so far as was reasonably practicable and so far as the processes of the law would allow; and that the courts would require clear and affirmative evidence that the intruder, claiming that he had acquired possession, not only had the requisite animus possidendi but made such intention clear to the world.

15.  It is therefore clear that the trespasser / squatter bears the burden of proof to show to the world, not only the registered owner, compelling evidence that he had the requisite animus possidendi, which was defined by Lindley MR in Littledale v Liverpool College [1900] 1 Ch 19, 23, CA as the intention to exclude the registered owner as well as other people. Thus, if the Court is convinced that the Plaintiff has the requisite intention to constitute possession, he acquires title to the Lot not only against the Defendants but against the world at large.

16.  So while it is true that the Plaintiff may not have had to issue the present proceedings but for the 1^st Defendant’s acquisition of the Lot in 2020, it must be borne in mind that time can never run in favour of a person who occupies a piece of land whose license has not been duly determined as no right of action to recover the land has ever accrued against the owner. Hence, such a person has no “adverse possession” however long his occupation or use may have lasted.

17.  In light of the aforesaid interpretation and analysis, I am of the view that the acquisition of the Lot by the 1^st Defendant gave rise to a right of action for the Plaintiff to acquire a possessory title, which he would otherwise not have acquired. If the Court is to make a costs order against the legal owner of the Lot who was deemed in law to be in possession, it would, in my judgment, impose a punishment on a faultless registered owner, while rewarding the squatter who dispossessed the paper title owner of the Lot just because he beats the statutory time limit. This, in my view, would not be just as the Court should not be bound to reward with costs those who trespass long enough without interruption.

18.  In conclusion, in order to achieve a just result overall, I shall make the following orders and declarations sought by the Plaintiff under the Amended OS:

(1) A declaration that the 1^st and 2^nd Defendants have lost their rights to bring any action to recover the Remaining Portion of Lot No. 1233 in D.D. 19, Tai Po, New Territories, Hong Kong or any part thereof by virtue of section 7(2) of the Limitation Ordinance (Cap. 347) and that the title of the 1^st and 2^nd Defendants on the Lot has been extinguished;

(2) A declaration that the Plaintiff has been in adverse possession of the Lot for a continuous period exceeding 12 years immediately prior to the commencement of these proceedings and has thereby acquired a possessory title to the Lot;

(3) A costs order nisi that no order as to costs of the present proceedings and of this application save and except the costs of and incidental to the amendment of the OS be borne by the 1^st and 2^nd Defendants jointly and severally, to be taxed if not agreed. The Plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations.