TANG TAK HONG AND OTHERS v. CHEUNG YAT FUK

HCMP3265/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3265 OF 1996

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J U D G M E N T

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1. In this action, the Plaintiffs claim title to a piece of agricultural land registered in the Yuen Long New Territories Land Registry as Lot No. 473 in Demarcation District No. 114 based on adverse possession. The Defendant is the registered owner of the land.

Plaintiffs' case

2. The Plaintiffs' case may be summarized as follows. The 1st Plaintiff is an indigenous villager of Wang Toi Shan, Yuen Long. Back in 1950s and early 1960s, he was a farmer cultivating several pieces of agricultural land in Demarcation District No. 114 together with his wife. He had been noticing that a piece of land in the vicinity was vacant and abandoned for several years, and the land was overgrown with weeds. In about 1960, he decided to take possession of the vacant land as a trespasser. At the time, the land was uncultivated, and he and his wife together cleared the weeds, and used the land for growing vegetables and other agricultural crops. He and his wife also carried out substantial improvements on the drainage system in order to make the land suitable for growing vegetables. A fence was erected by them surrounding the boundary of the land in order to prevent wild animals from entering into the land.

3. This went on for about seven years, and then through the introduction of a Mr. Poon Wong ("Mr. Poon"), the 1st Plaintiff let the land to a Mr. Cheung Man Yau ("Mr. Cheung"), a neighbour of Mr. Poon, for a term of 10 years commencing from 26th March 1967 at an annual rent of $120. The leasing of the land was evidenced by two "Lease Books" signed by the 1st Plaintiff as landlord, Mr. Cheung as tenant, and Mr. Poon as witness. The Lease Books also evidenced the payment of rent by Mr. Cheung to the 1st Plaintiff throughout the term of the tenancy. The tenancy was renewed subsequently, and in total Mr. Cheung was the tenant of the 1st Plaintiff for about 30 years. The last rental amount was $1,000 per year.

4. According to the evidence adduced by the Plaintiffs, Mr. Cheung used to be the temple owner/attendant of a temple situated at Lot No. 403 in the same Demarcation District, which was very near to the subject land in question. The temple used to be known as Tin Tung Temple (天洞古廟), and Mr. Cheung and his family used to reside at the temple. The land was leased by Mr. Cheung from the 1st Plaintiff, which he used in conjunction with an adjacent plot of land (i.e. Lot No. 474) for the operation of a poultry farm or business known as Cheung Tat Chau Farm (張達偢農場). Cheung Tat Chau was said to be the name of a son of Mr. Cheung. This usage of the subject land was said to continue up to 1997/1998 when the tenancy eventually came to an end. Mr. Cheung was said to have retired in around 1998, moved out of the temple, and passed away thereafter. The temple has since been run by another person under another name.

5. According to the evidence of the wife of the 1st Plaintiff, the temple was just located on the side of a small road or track opposite to the farm used to be run by Mr. Cheung. She described in evidence that the subject land was more or less in a square or (more correctly as can be seen from her evidence relating to the size of the subject land by comparison with the size of the courtroom) a rectangular shape, less a corner in square shape facing the road and opposite to the temple on the other side of the road. This corner square did not form part of the subject land, but was used and occupied by Mr. Cheung as part of his farm after he had leased the subject land from the 1st Plaintiff. The 1st Plaintiff's wife explained in evidence that this corner square was a piece of cultivated land when she and her husband first assumed occupation of the subject land which was then in an abandoned state. That was why they only occupied the subject land without occupying the corner square as well.

6. After the subject land was let to Mr. Cheung, a structure abutting the road and facing the temple on the other side of the road was erected on this corner square by Mr. Cheung who used it for rearing chicken, and to its left also abutting the road and facing the temple there was also erected on a portion of land comprising part of the subject land a structure or part of a structure used by Mr. Cheung for storage purpose. It was not very clear from the 1st Plaintiff's wife's evidence whether there was only one structure abutting the road used partly for rearing chicken and partly for storage, or there were actually two adjacent structures abutting the road opposite to the temple for rearing chicken and storage respectively. Anyhow, Mr. Cheung used the rear portion of the subject land not facing the temple directly for rearing ducks, for which purpose he had erected about four sheds. There was also a small and shallow man-made pond in a rectangular shape constructed on the open ground at the rear portion of the subject land for poultry rearing purpose.

7. According to the evidence given by Mr. Poon, he had been living next door to the temple for over 40 years. He knew quite well the 1st Plaintiff and his wife, as well as Mr. Cheung (before his death), for many years since he moved into live in that area over 40 years ago. In fact the temple was built by Mr. Cheung several years after he first moved into his house. He was able to identify the subject land as a plot of land opposite to the temple on the other side of the road. He confirmed he was the person who introduced Mr. Cheung to lease the subject land from the 1st Plaintiff for use as a poultry farm in 1967. He actually signed one of the two Lease Books containing the terms of tenancy as the "introduction person" and witness.

8. He said in evidence that before the land was so let to Mr. Cheung, it had been used by the 1st Plaintiff's wife first for growing crops on a trial basis which apparently turned out to be unsuccessful and subsequently for growing vegetables. He said when he first moved to live in that area, the subject land in question was already in use by the 1st Plaintiff's wife for agricultural purpose, and he did not know what use if any the land had been put to prior to its use by the 1st Plaintiff's wife, as that would be before his time. He personally witnessed the 1st Plaintiff's wife fencing the boundary of the land with barbed wires before she turned the land into ground for growing vegetables.

9. Mr. Poon confirmed in evidence the name of Mr. Cheung's farm, the erection of two adjoining structures for rearing chicken and ducks in his farm, facing directly the temple on the other side of the road, and the existence of a pond for rearing ducks on the subject land which had since been filled up. He eye-witnessed the collection of rent by the 1st Plaintiff and his wife from Mr. Cheung, and said that the landlord and tenant relationship lasted over 30 years. He said the farm ceased business in the 1990s and Mr. Cheung had passed away for several years. He described the subject land as being in a rectangular shape approximately, and the area of the land as being more or less the size of the courtroom.

10. Very usefully, Mr. Poon was able to recognize and identify, amongst others, the temple, his own house, the road between the temple and the subject land, the subject land, and the two adjoining structures erected by Mr. Cheung on the land described above in an enlarged government aerial photograph of the area in question taken in 1972. He was slightly confused and was not clear whether the corner area of the subject land adjoining the road opposite to the temple formed part of the subject land. He also said that apart from the two structures, Mr. Cheung did not erect any other structure on the subject land, although he admitted that that piece of evidence was based on his observation from the outside as he had never entered into the inner part of the farm beyond the two structures.

11. The existence and locations of the temple, the farm operated by Mr. Cheung and the road between them were also confirmed by Mr. Chan Pat Shing who had been living in the nearby area since mid 1960s, not only by general oral evidence but also by reference to the enlarged aerial photograph as well as a 1973 government survey map covering the area in question. He said Mr. Cheung's farm apparently ceased business in about 1993, probably due to the stringent restrictions imposed by the government under its environmental protection policy. In fact, he personally knew Mr. Cheung both as the temple attendant as well as the owner of the farm. He knew the places involved in the present case since childhood very well.

12. According to the 1st Plaintiff, since he entered into possession of the subject land in 1960, he had been occupying and using the land as if he were the owner of the same. He had never paid any rent to anybody throughout the years, but rather he had received rent from Mr. Cheung in respect of the tenancy for 30 years. Up until 1996 when the present action (by originating summons) was commenced, he had never suffered any interference of his possession and quiet enjoyment of the subject land by its registered owner or anyone claiming under him. According to the Block Government Lease covering Lot No. 473, the land was at the time of the Lease subject to an old customary mortgage for $3 in favour of a Cheung Fung Hoa who was said to be in possession of the Lot. The 1st Plaintiff claimed that he had never been approached by Cheung Fung Hoa or anyone else acting on his or her behalf for repayment of the mortgage loan or interest, and his possession and enjoyment of the subject land had never been interfered with by Cheung Fung Hoa or anyone claiming under him or her.

13. The 1st Plaintiff's wife also said in evidence that after assuming occupation of the subject land and turning it into a piece of cultivated land, she and her husband regarded the land as belonging to them, and not its original owner who had left the land abandoned and uncultivated. Even if asked to, she would not have agreed to pay rent to its original owner, or accept compensation money in respect of her and her husband's labour expended on developing the land in exchange for their vacating the land. As a matter of fact, that never happened either.

14. Expert surveying evidence was called by the Plaintiffs to establish that the subject land allegedly adversely possessed by the 1st Plaintiff in the above circumstances was Lot No. 473.

15. In 1996, the 1st Plaintiff (then suing as the only Plaintiff) commenced the present action against the Defendant claiming that he had thus acquired a possessory title to Lot No. 473, and the Defendant's title to the same had been extinguished pursuant to section 17 of the Limitation Ordinance (Cap. 347). He sought declaratory relief against the Defendant accordingly.

16. When the present action was first commenced, the 1st Plaintiff made an Affirmation dated 9th September 1996 in support of his claim. The 1st Plaintiff has since been diagnosed as suffering from senile dementia, he being over 70 in age, and his wife (Cheung Chun Kiu) has been appointed as his next friend. The 1st Plaintiff through counsel successfully applied for the admission of the 1st Plaintiff's Affirmation as admissible hearsay evidence for use at trial. The 1st Plaintiff's wife said in evidence that back in 1996, i.e. the time when the 1st Plaintiff made his Affirmation, there was nothing wrong with the 1st Plaintiff's mental capacity. His present illness only started when he had a "stroke" around two years ago. The 1st Plaintiff did not give evidence at trial, but as mentioned above his wife, as well as Mr. Poon and Mr. Chan Pat Shing did. Originally a subpoena was issued to compel the wife of the late Mr. Cheung to give evidence on behalf of the Plaintiffs. Apparently the subpoena had been served on the widow but she did not turn up at trial. At one stage, counsel for the Plaintiffs mentioned the intention to apply for a warrant against the widow, but eventually the Plaintiffs decided not to do so or rely on the widow to give evidence in relation to this case.

17. According to the evidence of the 1st Plaintiff's wife, one day in around 1998, a Mr. Tang Wai Man ("Mr. Tang") suddenly used an excavator and other machinery to pull down some of the structures erected by Mr. Cheung on his farm. This led to a confrontation between the 1st Plaintiff and his wife with Mr. Tang, and eventually Mr. Tang agreed to fence the boundary of the subject land for the 1st Plaintiff and his wife. That was done by Mr. Tang. The 1st Plaintiff also paid compensation of $2,000 to Mr. Cheung for the loss of his structures on the land. Mr. Tang then asked the 1st Plaintiff to let the land to him, but the 1st Plaintiff was so angry about Mr. Tang's action that he refused for a year. But eventually the 1st Plaintiff agreed to let the land to Mr. Tang. By then, Mr. Cheung had closed his farm, terminated his tenancy of the subject land with the 1st Plaintiff and vacated the premises. Subsequently Mr. Tang who had apparently also acquired the right to occupy the adjacent land pull down the fence surrounding the subject land, and erected metal hoardings around the boundary of the land occupied by him (including the subject land).

18. I should mention at this stage that after the present proceedings were commenced in September 1996, the Defendant did not enter any appearance, and that resulted in an Order made by Mrs. Justice Le Picheon (as she then was) on 9th October 1997 declaring that the Defendant's title to the subject land had been extinguished and that the 1st Plaintiff had established a possessory title to the same and was accordingly entitled to be registered as the owner of the premises in the Land Registry. A copy of the Order was therefore registered in the Land Registry on 22nd June 1998. On 26th June 1998, the 1st Plaintiff as beneficial owner sold the land to two of his sons, Tang Fuk Keung and Tang Kap Yau, for $500,000. The relevant Assignment was duly registered in the Land Registry. Then in 1999, the Defendant took out an application to set aside the Order obtained by the 1st Plaintiff in his absence, arguing that he had never been served with or received the Originating Summons or other relevant documents in these proceedings. Eventually, the Order by default was set aside by Mr. Recorder Kotewall S.C. on 28th February 2000 and the Defendant was given leave to defend the 1st Plaintiff's claim. The two sons have since joined in as co-plaintiffs in this action.

Defendant's case

19. The case of the Defendant is very much different from that of the Plaintiffs on the facts. According to the Defendant, he was born Cheung Yat Fuk (張日福) in 1947. His grandfather and father both passed away before he was born. He was the lawful successor to Lot No. 473, i.e. the subject lot. His family lived in a village nearby but not in exactly the same area as the subject land. Prior to his reaching majority, the Lot was registered in the name of her mother as trustee for him. The Lot was eventually registered in his own name, Cheung Yat Fuk, in 1969, after he had reached majority. By then he had got married and moved to live in Kowloon. In the meantime, according to a statutory declaration made by him in 1972, he had since 1965 been using another name Cheung Yat Fung (張日鋒), which became his preferred name.

20. He said in evidence that whilst he was still a child, his mother had let the subject lot to a tenant Mr. Chan Wah ("Mr. Chan") who used the land for growing vegetables. He had accompanied his mother to visit Mr. Chan at the subject lot for the collection of rent on several occasions. There was no written tenancy agreement with Mr. Chan.

21. The Defendant said in evidence that in 1975, Mr. Chan no longer wanted to lease the land, which was then let to a new tenant Mr. Lai Kwong ("Mr. Lai") for five years under a written tenancy agreement. Mr. Lai lived nearby and was the owner of a farm known as Lai Kwong Yuen, a large farm comprising several plots of land quite near to Lot No. 473. Mr. Chan signed the written tenancy agreement as a witness. In the written tenancy agreement, the Defendant used his name by birth, because he wanted to use the same name in which his title to the land was registered. Under the same tenancy agreement, another plot of land nearby known as Lot No. 517 in the same Demarcation District was also let to Mr. Lai. The total rental amount was $150 per annum. He said in evidence that Mr. Lai, like Mr. Chan, also used the subject land for growing vegetables. None of them lived on the subject land, and no structures were erected on the subject land. In an earlier Affirmation filed by the Defendant in these proceedings, he had said that Mr. Chan used to live "next to" the subject land; however he corrected himself during cross-examination and explained that in fact Mr. Chan lived next to Lai Kwong Yuen which was near the subject land.

22. The Defendant said in evidence that in 1979, he visited Mr. Lai at Lai Kwong Yuen for the purpose of collecting rent and negotiating the renewal of tenancy. Mr. Lai told him that he was not really interested in renewing the tenancy. But as the Defendant had no other use for the land, so he offered to allow Mr. Lai to continue using the land for as long as he wished for free. Mr. Lai agreed. On that occasion, the Defendant did not visit the subject lot. In fact, the Defendant said he did not visit the subject land after 1975 when the tenancy agreement with Mr. Lai was signed until 1985.

23. The Defendant said in evidence that in 1985 he tried to pay a visit to Mr. Lai at Lai Kwong Yuen but could not find him there. He said he then walked in the direction of the subject land and saw at a distance that weeds had been overgrowing on the land. He thought to himself that Mr. Lai had abandoned the use of the subject land. He accepted in evidence that on that occasion, he did not actually enter the subject lot but only saw it from a distance.

24. The Defendant said he did not return to the land again, and years went by until 1996 when he was approached by Mr. Tang who expressed an interest in leasing the land from him for $2,000 per month. He found the offer acceptable and a written tenancy agreement was entered into with Mr. Tang on 1st July 1996. In the tenancy agreement, unlike the occasion in 1975, he used his name Cheung Yat Fung as the landlord. The Defendant said in cross-examination that about after half a month prior to the signing of the tenancy with Mr. Tang, Mr. Tang had taken him to visit the subject lot. On that occasion, he saw that Mr. Tang had already flattened the subject lot as well as the neighbouring land which were fenced off for open storage and vehicle parking purposes. The Defendant explained that in fact before Mr. Tang entered into the tenancy with him, Mr. Tang had entered into a purported tenancy with an aunt of his who pretended that she had the right to deal with the Defendant's land, for the leasing of the subject land. But he did not know for how long Mr. Tang had been using the land prior to the making of the tenancy agreement with him on 1st July 1996.

25. The Defendant said in evidence that during his various visits to the subject lot, he saw that the land was used for growing vegetables (until it was found uncultivated by him in 1985), and he never saw the erection of any structures, permanent or otherwise, on the land. He said he did not know where the temple was and had never heard of the farm allegedly operated by Mr. Cheung (partly) on his land. He did not know Mr. Cheung or Mr. Poon. He could not explain in evidence why the government aerial photographs taken in 1972 and 1973 showed that structures were erected on Lot No. 473, and did not show the growing of vegetables on the same. He said, by looking at the photographs, that the structures looked like structures for rearing poultry. He was quite adamant that the "Lot No. 473" he had visited on various occasions before did not have any structures erected on the same. Likewise, he could not explain why a government aerial photograph taken less than one month before 1st July 1996 (when he signed the tenancy agreement with Mr. Tang for the leasing of the subject lot) showed that there were still structures erected on Lot No. 473, and the land had not been flattened and was not used for open storage and vehicle parking purposes, contrary to his evidence about what he saw during his visit together with Mr. Tang to the land about half a month before the signing of the tenancy agreement.

26. The Defendant called three witnesses to give evidence for him. A Madam Ng, the widow of Mr. Lai who passed away in 1998, said she married Mr. Lai in 1984 and began to live in Lai Kwong Yuen after marriage. She had heard from Mr. Lai about his leasing of Lot No. 473 and Lot No. 517 from the Defendant through the introduction of the late Mr. Chan whom she knew, and confirmed that originally an annual rent of $150 was payable for a term of five years, but subsequently the Defendant let her husband use the land for free. Since mid 1996, the subject lot had been turned into a vehicle parking ground. For the subject lot, her husband used it for growing vegetables for self-consumption, whereas Lot No. 517 remained a vacant land just outside Lai Kwong Yuen. She used to help her husband irrigate the subject lot in her spare time. She said the subject lot was next to Lot No. 517 but the two were separated by a small road or track, and the two lots and Lai Kwong Yuen were more or less on a straight line. She said no structures whatsoever were erected on Lot No. 473, and from it no temple could be seen. She had heard of a temple (i.e. the temple mentioned above) but did not know where it was. She had never heard of the name of Mr. Cheung or the farm allegedly operated by him. She said her late husband knew Mr. Poon who lived near the temple, but she personally did not know him well.

27. The Defendant also called a Mr. Cheung Tin Cheung, a distant cousin and the registered manager of the tso or tong land in his native village, Cheung Uk Tsuen, to give evidence for him. The witness became the manager in 1980 and was involved in the rural affairs in the area including Demarcation District No. 114. Apart from his native village, the tso or tong owned land in that District. He said the Defendant had asked him to keep an eye on his land (and there were several plots) when he went to collect rent from the tenants of the tso/tong land in the District, which he did. He said the Defendant had told him that the subject lot in question had been let to Mr. Lai, which he found to be the case. He saw Mr. Lai using the land for growing fruits and vegetables. No structure was erected on the subject lot. The witness could recognise the temple, but said the subject lot was three to four plots of land away from the temple. He said the distance between the two was about five times the width of the courtroom from entrance to wall, and that represented about 300 to 350 feet. He could not quite recognise the location of Lai Kwong Yuen from the aerial photographs, but once the location of Lai Kwong Yuen (as per the location of the "residence of Mr. Lai" pointed out by Mr. Poon in the aerial photograph) was pointed out to him (together with that of the temple), he was able to identify the approximate location of the subject lot, which was in the upper right direction of the temple in the aerial photograph (i.e. in a direction away from the known location of Lot No. 473). When a different location of Lai Kwong Yuen was assumed (which accorded more accurately with the survey plan), he pointed to an area nearer to the known real location of Lot No. 473 as being the approximate location of the land owned by the Defendant including the subject lot. But he confirmed that nothing was erected on the land let to Mr. Lai. Anyhow, the witness said prior to 1987 when government started taking action to control poultry farming for environmental reasons, there were over 400 farms in that area and many farms near the temple. But after 1994, only those complying with the stringent requirements of the government and possessing the necessary permits survived, and there were only four left. He could not remember the name of Mr. Cheung's supposed farm. He confirmed the letting of the subject lot by the Defendant to Mr. Tang in 1996, after he had also on behalf of his tso/tong entered into similar tenancies with Mr. Tang. In fact it was he who introduced Mr. Tang to the Defendant.

28. At this juncture, it is pertinent to add that according to Mr. Poon who knew both Mr. Chan and Mr. Lai whilst they were alive, the two of them had never occupied or farmed on the subject lot, they farmed and lived somewhere within the vicinity respectively, and their approximate locations were indicated by Mr. Poon in the aerial photograph.

29. Returning to the witnesses called by the Defendant, the Defendant's last witness was Mr. Tang. According to Mr. Tang, he was in the business of amassing agricultural land by way of leasing and turning the amassed land into open storage ground for sub-letting to others. In 1995, he was interested in acquiring Lot No. 473. He asked around and learned that the 1st Plaintiff's family had once used the land. So through a relative he contacted one of the sons of the 1st Plaintiff who however said the land did not belong to his family. So Mr. Tang did a land search and learned that the Defendant was the registered owner thereof. Through the introduction of Mr. Cheung Tin Cheung (i.e. DW3), he entered into negotiations with the Defendant and eventually leased the same from the Defendant in 1996.

30. Mr. Tang said at a corner of the land there was erected a structure comprising a kitchen and toilet, almost directly opposite to the temple in question, and the kitchen and toilet apparently served the occupiers of the temple. Mr. Tang said this did not form part of Lot No. 473 but was in fact Lot No. 474. As for the subject land, by 1995 it was vacant and uncultivated. The land was overgrown with weeds. After he acquired the same from the Defendant in 1996, he and his workers simply flattened the land for use for open storage purpose. He had some vague recollection that his workmen mentioned to him that when they flattened the land some people scolded or argued with them in relation to their action. He said in 1998 he was approached by a son of the 1st Plaintiff telling him that he was the owner of the land and asking him for payment of rent for his occupation of the land. He did a land search of Lot No. 473 and found that a Court Order in favour of the 1st Plaintiff's possessory title to the land had been registered. He therefore entered into a new tenancy agreement with the son of the 1st Plaintiff for the leasing of the land for three years which had since been renewed for another two years, although he continued to pay rent (at a reduced rate) to the Defendant, apparently pending the resolution of the present dispute. He said he had already sub-let the land to others and could not afford any disruption of the sub-tenancy by either side.

31. Mr. Tang was adamant that there was no structure erected on the subject land by 1995/1996. When asked to indicate the location of the subject lot in a 1996 government aerial photograph and the enlargements thereof, Mr. Tang pointed to an unbuilt-on area to the left of the actual location of Lot No. 473 as being the location of the subject lot, insisting that the structures to the right were structures erected on a neighbouring Lot No. 475 (which is as a matter fact also in a roughly similar shape as Lot No. 473 but is located on the right-hand side of it). He could not explain why the aerial photograph did not indicate the structure comprising the kitchen and toilet erected on Lot No. 474 at the corner of the subject lot.

32. It is clear by comparing the survey plans, the aerial photographs and the location indicated by Mr. Tang that what Mr. Tang called Lot No. 475 (with structures erected on it) was actually Lot No. 473, whereas what he called Lot No. 473 (without any structures erected on it) was actually an area located at the neighbouring Lot No. 471 and Lot No. 472 to the left of the subject lot.

Findings of fact

33. Having carefully considered the oral evidence adduced before me as well as the demeanour of the witnesses, and having taken into account the documentary evidence and surrounding circumstances, I am fully satisfied that the 1st Plaintiff's wife, Mr. Poon and Mr. Chan Pat Shing were all honest and truthful with their evidence, and I have no difficulty in accepting their evidence. Their evidence also corroborated what the 1st Plaintiff had affirmed in his Affirmation made in 1996, and I accept that the 1st Plaintiff was truthful with what he had affirmed. Of course, there were minor discrepancies, which were only to be expected, as the various witnesses were asked to recall matters that took place many years ago. In this regard, my task is greatly assisted by the existence of very good aerial photographs, and the presence of the temple which acts as a most valuable reference point or landmark for identifying the true location of the subject lot as occupied by the 1st Plaintiff and Mr. Cheung's farm.

34. I am fully satisfied that the 1st Plaintiff and his wife did start occupying the subject lot in around 1960 and cultivate the land until 1967 when it was let to Mr. Cheung for operating a farm; and that Mr. Cheung did operate the farm on the subject lot pursuant to the tenancy which was renewed for a total period of about 30 years. In this regard, I note that when the 1st Plaintiff first commenced proceedings and made his Affirmation in support in late 1996, he referred to Mr. Cheung as still being the tenant of the subject lot at the time. I regard this as a useful marker of the length of Mr. Cheung's tenancy, which was of course also evidenced by the Lease Books. I fully accept the Lease Books as genuine records and documents evidencing the tenancy in question.

35. By accepting the evidence called by the Plaintiffs, I am not saying that the Defendant and his witnesses did not tell the truth in the witness box, although I do have some reservations relating to whether the evidence of Mr. Lai's widow was affected by prior discussion of the case between her and the Defendant, and whether Mr. Tang was absolutely honest relating to his flattening of the subject lot in 1996 and the alleged confrontation between the 1st Plaintiff and his family with Mr. Tang and/or his workmen. In my judgment, the Defendant, the late Mr. Chan and the late Mr. Lai did enter into successive tenancies relating to a plot of land which they genuinely but mistakenly thought to be Lot No. 473. Quite clearly, the descriptions of the demised premises by the Defendant, Mr. Lai's widow and Mr. Cheung Tim Cheung all pointed to the so-called Lot No. 473 as being a piece of land other than the real Lot No. 473 on which according to the aerial photographs several structures had been clearly erected, contrary to these witnesses' evidence. It is quite clear to me that all of them, including the late Mr. Chan and the late Mr. Lai, had mistakenly taken another plot of land on which no structures whatsoever were erected at any material time as being Lot No. 473. That therefore explains the tenancies of the so-called Lot No. 473 by the Defendant in favour of the late Mr. Chan and subsequently the late Mr. Lai, the latter of which was evidenced by a written tenancy agreement. I am not sure on the evidence as to the exact location of the plot of land actually let to Mr. Chan and Mr. Lai; but I am certain that it was not the same plot of land occupied by the 1st Plaintiff and his wife and subsequently by Mr. Cheung in operation of his farm, and that it was not the real Lot No. 473.

36. I reject the submission of Mr. Lee, counsel for the Defendant, that this plot of land formed part of the subject lot and lied at the rear end of the subject lot that had not been built on. For according to Mr. Poon's evidence, which as I said I totally accept, neither Mr. Chan nor Mr. Lai had ever farmed near the temple area. Moreover, according to Mr. Lai's widow's evidence, from the plot of land in question, one could not see the temple, and indeed she did not even know where the temple was, although she had been living in Lai Kwong Yuen since marriage in 1984. As for Mr. Tang, his evidence that there was no structure erected on the subject lot in 1995 and 1996 was clearly contradicted by the aerial photograph taken in June 1996. He was either mistaken as everyone else from the Defendant's side did or was not telling the truth (he having been involved in the subsequent demolition of some of the structures at the rear of Lot No. 473 belonging to Mr. Cheung's farm). Put at the lowest, he had mistaken the subject lot for Lot No. 475 to the right of the subject lot, and confused the structures on the two lots respectively.

37. I should mention for the sake of completeness that, in my judgment, Mr. Tang did flatten the structures at the rear of the subject lot together with the adjacent land in 1996, thinking that he had already obtained a lease from the Defendant of the subject lot. This led to a confrontation between the 1st Plaintiff and his family and Mr. Tang and/or his workmen. This also led to the commencement of the present proceedings by the 1st Plaintiff with a view to establishing his possessory title to the subject lot. By then, Mr. Cheung should have ceased operating his farm in the subject lot due to government intervention, but was continuing to occupy the front structure facing the temple. The demolition of the structures at the rear by Mr. Tang did not affect his farm operation which was no more, but did lead to the payment of a small compensation by the 1st Plaintiff to Mr. Cheung.

38. In short, I am fully satisfied that the witnesses from both sides were talking about two different plots of land, and there was no overlapping of the two whatsoever. The plot of land referred to by the Plaintiffs' witnesses was the subject lot, i.e. Lot No. 473, and the other one mentioned by the Defendant's witnesses was simply an unknown and irrelevant plot of land on the evidence before me.

39. Regarding the boundary of the land occupied by the 1st Plaintiff and his wife and subsequently Mr. Cheung, it is clear from the survey plans and other relevant documents and plans that roughly speaking the subject lot is in a rectangular shape located on the other side of the small road directly facing the temple, less a square-shaped top right corner opposite the temple (i.e. Lot No. 474). The descriptions of the subject lot given by the 1st Plaintiff's wife and Mr. Poon respectively accorded very well with the shape of the subject lot. As for the size of the land actually occupied, whilst both the 1st Plaintiff's wife and Mr. Poon said it was comparable to the size of the courtroom, whereas the actual size of Lot No. 473 would seem to be about double the size of the courtroom, one must give due allowance to this sort of comparison exercise. The inherent inaccuracy of the exercise is obvious. Apart from giving one some impression of the size in question, I do not think too much can be read into it.

40. Rather, in this regard, as I said, the descriptions of the shape of the land actually occupied by the 1st Plaintiff and Mr. Cheung's farm given by the 1st Plaintiff's wife and Mr. Poon are important. Moreover, it is quite clear from the aerial photographs that the plot of land to the rear of the subject lot was in use by people throughout, and structures were erected on the land. There is nothing to suggest that the owner or occupier of the rear plot of land did not use the land in accordance with its common boundary with Lot No. 473. And given my finding that the Defendant had throughout been mistaken as to the whereabouts of Lot No. 473, the same must have being in an unused and abandoned state prior to the occupation by the 1st Plaintiff. All this together would mean that when the 1st Plaintiff came into the picture and occupied the subject lot, the probabilities were that he would occupy the abandoned land from the front side abutting the small road all the way down to the (common) boundary with the rear plot of land.

41. Put another way, given that the whole of Lot No 473 was in an abandoned state and available for occupation, and given the 1st Plaintiff and his wife's intention to occupy and cultivate the piece of abandoned land which they found in the area, there was every reason for the 1st Plaintiff and his wife to actually do so by occupying the whole of the subject lot.

42. Moreover, by comparing the aerial photographs available with the survey plans, one can quite clearly see the several temporary structures erected on the subject lot from the aerial photographs corresponding to those mentioned by the 1st Plaintiff's wife and Mr. Poon in evidence. On a balance of probabilities, I accept that those structures seen in the aerial photographs were the structures mentioned by the two witnesses.

43. Looking at the evidence in the round, I am satisfied, on a balance of probabilities, that the whole of the subject lot had been taken possession of by the 1st Plaintiff and his wife as claimed, which was subsequently occupied by Mr. Cheung (together with Lot No. 474) as his farm until at least 1996 when proceedings were commenced.

Limitation Ordinance

44. I now turn to the law. The relevant provisions are contained in the Limitation Ordinance (Cap. 347):

"7(1) No action shall be brought by the Crown to recover any land after the expiration of 60 years from the date on which the right of action accrued to the Crown or, if it first accrued to some person through whom the Crown claims, to that person.

(2) No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person:

Provided that, if the right of action first accrued to the Crown through whom the person bringing the action claims, the action may be brought at any time before the expiration of the period during which the action could have been brought by the Crown, or of 12 years from the date on which the right of action accrued to some person other than the Crown, whichever period first expires.

...

9(1) Subject as hereafter provided in this section the right of action to recover any land shall, in a case where the estate or interest claimed was an estate or interest in reversion or remainder or any other future estate or interest and no person has taken possession of the land by virtue of the estate or interest claimed, be deemed to have accrued on the date on which the estate or interest fell into possession by the determination of the preceding estate or interest.

...

12(3) Where any person is in possession of land by virtue of a lease in writing by which a rent of not less than $20 is reserved, and the rent is received by some person wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease, and no rent is subsequently received by the person rightfully so entitled, the right of action of the last-named person to recover the land shall be deemed to have accrued at the date when the rent was first received by the person wrongfully claiming as aforesaid and not at the date of the determination of the lease.

13(1) No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) and where under the foregoing provisions of this Ordinance any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date, the right of action shall not be deemed to accrue unless and until adverse possession is taken of the land.

(2) Where a right of action to recover land has accrued and thereafter, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right of action shall be deemed to accrue unless and until the land is again taken in adverse possession.

(3) For the purposes of this section -

(a) possession of any land subject to a rentcharge by a person (other than the person entitled to the rentcharge) who does not pay the rent shall be deemed to be adverse possession of the rentcharge; and

(b) receipt of rent under a lease by a person wrongfully claiming, in accordance with section 12(3), the land in reversion shall be deemed to be adverse possession of the land.

...

17 Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished."

45. In order to establish a possessory title, a plaintiff must show continuous possession of the premises for the relevant period of limitation, together with the necessary intention to possess, i.e. an intention to possess the premises to the exclusion of the whole world including the true owner, in the usual case of a knowing trespasser, i.e. one who knows that he is not the true owner: Wong Tak Yue v Kung Kwok Wai [1998] 1 HKLRD 241 (CFA). For the requisite intention to possess in the rare case of a trespasser who (mistakenly) believes himself to be the owner of land, see Tsun Wai Man v Cheung Yung HCA14202/1999 Cheung J. (9/8/2001).

46. It is common ground in the present case that the relevant period is twenty years, as the material facts relied on took place well before the 1991 amendment shortening the limitation period to twelve years (Ord. No. 31 of 1991).

Intention to possess

47. So far as intention to exclude the whole world including the true owner is concerned, I accept the evidence of the 1st Plaintiff's wife and the Affirmation of the 1st Plaintiff and find that the requisite intention was present at all material times shortly after 1960 when the land had been turned into a cultivable state through the manual efforts expended by the 1st Plaintiff and his wife.

48. In my judgment, although the Affirmation of the 1st Plaintiff was rather unclear relating to his intention at the time, the intention of the husband in the present case must have been the same as the intention of the wife as clearly spelt out by her in evidence which I accept, i.e. to treat the land as their own and exclude the whole world including the true owner from entering into the land. I see no reason why their intentions should have been different on the evidence before me.

Adverse possession via a tenant?

49. But what about continued possession for twenty years? It is clear that on the evidence, the actual occupation of the land by the 1st Plaintiff and his wife lasted much less than the requisite period of twenty years; it lasted from sometime after 1960 until 1967 when the premises were let to Mr. Cheung. Mr. Lam, counsel for the Plaintiffs, argued that this did not matter. His argument was twofold. First, he argued that as a matter of general law, "possession" in the present context may take the form of occupation and possession by a "tenant" of the trespasser under a "tenancy" granted by the trespasser; and therefore there was no premature termination of adverse possession by the 1st Plaintiff when he granted a tenancy of the subject lot in favour of Mr. Cheung in 1967.

50. Second, Mr. Lam relied on section 12(3) and section 13(3)(b) and argued that the receipt of rent by the 1st Plaintiff from Mr. Cheung from 1967 onwards constituted deemed adverse possession by the 1st Plaintiff of the subject lot; and since the tenancy of Mr. Cheung lasted about 30 years, with or without the pre-tenancy period, there was a sufficient period of deemed adverse possession by the 1st Plaintiff.

Bligh v Martin

51. In support of his two arguments, Mr. Lam referred me to a first instance decision by Pennychuick J. in Bligh v Martin [1968] 1 WLR 804. In that case, a piece of land was first conveyed to the defendant who did not enter into possession of the land, and then subsequently by mistake it was included in a second conveyance in favour of the plaintiff's predecessor-in-title who entered into possession of the same. Afterwards, the plaintiff believing that he was the true owner granted a tenancy of, amongst other pieces of land, the subject land in favour of the defendant (who was ignorant of his ownership). Rent was duly paid and received. The court held that a case of adverse possession, comprising various periods of actual possession as well as the period of tenancy, had been made out by the plaintiff. The relevant parts of the judgment (at pp. 812H to 813H) are as follows:

" The summer period in 1960 presents what seems to me the real difficulty in this case. The question appears to be entirely novel. During this period, the position was that the defendant was in physical possession of the plot under a tenancy agreement granted by the plaintiff, to whom the defendant paid rent. Counsel for the plaintiff contended that the position is covered by section 10 (3) (b) [i.e. our section 13(3)(b)], of the Limitation Act, 1939, which I have read. That provision is no doubt primarily addressed to the state of affairs in which the land is already in the possession of a tenant when the adverse possession begins; that is to say, the first act of adverse possession is the receipt of rent by the wrongful claimant from the tenant. The provision would have no particular significance in the ordinary case where the wrongful claimant first takes physical possession himself and then lets the land to a tenant, since in that case the possession of the tenant is no less adverse to that of the rightful owner than is the possession of the wrongful claimant. It seems to me, however, that on the plain meaning of the words used, the provision does cover that position. There is receipt of rent under a lease by the person who wrongfully claims to be entitled to the land in reversion immediately expectant on the determination of the lease, and none the less so by reason that he granted the lease himself.

If that is the proper construction of subsection (3), then it must cover the altogether exceptional position in which the tenant who pays the rent to the wrongful claimant is himself the rightful owner. I do not see any reason in principle why this should not be so. Indeed, as regards the freehold interest, it appears to be a striking instance of adverse possession.

Mr. Francis conceded that section 10 (3), applies where the land is already in the possession of a tenant when the adverse possession begins, but he says the subsection has no application where the wrongful claimant has taken possession himself before granting a tenancy. On this footing he goes on to contend that the only relevant possession during the six-month summer period was that of the plaintiff himself; and that, of course, would represent the cessation of adverse possession within the meaning of subsection (2). I do not think that that is a natural construction to put on subsection (3).

Both counsel pointed out that where land is subject to a tenancy, the landlord and the tenant have each, in correct legal parlance, possession of the land, though in different senses. Counsel then proceeded to draw opposing conclusions from this position. It seems to me that, for the purpose of adverse possession of freehold land under the Limitation Act, 1939, the land must be regarded as in the possession of one or other of the two parties concerned, i.e., the landlord or the tenant; and it seems to me that subsection (3) designates the landlord as the relevant party for this purpose. On that footing it follows that the plaintiff, having been in receipt of rent during this summer period, remained throughout the period in adverse possession of the land."

52. Mr. Lam seized upon the following sentence from the above extract to argue that as a matter of general law, "possession" by a trespasser in the present context of adverse possession may take the form of his letting the premises out for occupation by a tenant:

"The provision would have no particular significance in the ordinary case where the wrongful claimant first takes physical possession himself and then lets the land to a tenant, since in that case the possession of the tenant is no less adverse to that of the rightful owner than is the possession of the wrongful claimant." (emphasis added)

53. Mr. Lam was unable to point to any authority, apart from the above sentence in Bligh v Martin, and a local case Wong Luen Chun v Secretary for Justice [1998] 4 HKC 122 following Bligh v Martin, which supported the proposition advanced by him. I shall deal with the local case in due course. But I note that Pennychuick J. did not cite any authority for his above sentence, which in my judgment, does not in any event support Mr. Lam's first argument. It should be noted that the learned judge merely said that "the possession of the tenant" was no less adverse to that of the rightful owner than was "the possession of the wrongful claimant". He did not say that the possession of the tenant against the true owner could be taken as that of the wrongful claimant. Thus analysed and understood, this part of Pennychuick J.'s judgment in Bligh v Martin simply provides no support for Mr. Lam's first argument.

Proper construction of section 13(1) and (2)

54. But is Mr. Lam's first argument right as a matter of principle? In this regard one must return to section 13, which introduces the concept of adverse possession in the first place. Section 13(1) stipulates when a period of limitation can start running; whereas section 13(2) deals with how the period may stop running, or put another way, how it may continue running. Both require that "the land is in the possession of some person in whose favour the period of limitation can run", which is termed "adverse possession", in order that time may start running or continue to run. The section does not define the word "possession", leaving aside the provisions in subsection (3) concerning "deemed" adverse possession which I will turn to in due course in dealing with Mr. Lam's second argument.

55. What does "possession" mean? The word bears different meanings under the general law depending on the context it is being used. However, it is in the context of limitation of actions and adverse possession that one is using the word in the present case. This must primarily be a question of statutory construction. In my judgment, the clue lies in the following words "some person in whose favour the period of limitation can run" in section 13(1). In the context of the Limitation Ordinance where one is concerned with the time within which a plaintiff must enforce his cause of action against a defendant, this "some other person" must be a person having "possession" of the land, whom the true owner should sue in order to recover his land. Otherwise it would not make sense to talk about the limitation period running in his (i.e. this some other person's) favour. It is such a potential defendant's "possession" of the land within the meaning of section 13(1) that one is interested in.

56. In the simple case of a trespasser in actual occupation of the land, he will naturally be the defendant the true owner should sue for recovery of his land. His "possession" in such a case must mean his actual occupation of the land. It is this trespasser's "possession" which may constitute adverse possession of the land, assuming he also has the right intention to possess.

57. In the case of successive trespassers within the limitation period, the true owner will and need only sue the last and current trespasser as defendant to recover his land. This defendant trespasser's "possession" must mean his actual occupation of the land. But he can also rely on his preceding trespassers' previous possession of the land as part of his own "possession" of the land to bar the true owner's claim if he can, again assuming that he has and his preceding trespassers all have had the necessary intention to possess. The reference to these preceding trespassers' "possession" of the land must also be a reference to their respective actual occupation of the land previously.

58. Pausing here, thus analysed, the "possession" referred to in section 13(1) and (2) must be, at least in these two situations, a reference to the actual occupation by the single trespasser, or as the case may be, the successive trespassers.

59. What about the case of a trespasser in actual occupation entering into a "tenancy" and then giving his "tenant" exclusive possession of the land during the term of the "tenancy"? In such a case, whom is the true owner going to sue to recover land? The answer must be the "tenant", rather than his "landlord" (i.e. the trespasser who was once in actual occupation but is no longer so after the grant of the tenancy). There is simply no need to sue the trespasser/"landlord" who is no longer in occupation of the land. A successful suit against the "tenant" would enable the true owner to recover possession of the land. The trespasser/"landlord" would be a totally irrelevant person to the true owner so far as recovery of the land is concerned. And what "possession" does the "tenant" have? Certainly he has his own "possession" - meaning his actual occupation - to rely on, and where necessary he can add to his own possession his "landlord's" previous "possession" - meaning his "landlord's" previous actual occupation of the land prior to the "tenancy", in order to mount a case of adverse possession against the true owner if he can (see below), assuming the necessary intention to possess is and was present at all material times.

60. Viewed in that light, "possession" must again be a reference to actual possession of the land by the "tenant" and that previously by his "landlord" before the "tenancy" was created.

61. In this context, the "concurrent possession", as it were, of the trespasser/"landlord" qua "landlord" of the land during the currency of the "tenancy" is totally irrelevant and useless to the "tenant" in seeking to establish a case of adverse possession, because the "tenant" has his own actual occupation of the land to constitute "possession" for the same period of time. Such so-called concurrent "possession", although perhaps correct as a matter of legal parlance in some context, is not the "possession" that section 13(1) and (2) talks about.

62. From the above analysis, one may conclude that when section 13(1) and (2) mentions "possession" or "adverse possession" of "some person in whose favour the period of limitation can run", it must be referring to the actual occupation of the land of the present and/or preceding trespasser(s) at the material times. And therefore I cannot agree with Mr. Lam's first argument that a person may claim adverse possession in the form of a tenancy granted by that person to a purported tenant, within the meaning of section 13(1) and (2) of the Ordinance.

63. That said, I am not suggesting that the possession of land by such a "tenant" can amount to adverse possession against the true owner within the meaning of the section. No doubt he is in actual occupation of the land and under the purported tenancy from his supposed landlord he has exclusive possession of the land for the term of the purported tenancy. However, in my judgment, he lacks the requisite animus possidendi to claim adverse possession arising from his own occupation of the land as a purported tenant. Possession by a tenant, even a tenant who refuses or fails to pay rent, can never amount to adverse possession against his landlord, or by the same token, the true owner if his landlord is not the true owner. In other words, he is not a "person in whose favour the period of limitation can run" within the meaning of section 13(1). But this does not in any way invalidate my analysis of the situation above in my construction of the word "possession" within the meaning of the section. All it means is that the limitation period does not run in favour of a "tenant" in a purported tenancy situation. It does not follow that the true owner should in such a case sue the "landlord" for recovery of his land or that the "landlord's" "concurrent possession" of the land qua "landlord" will therefore become the "possession" within the meaning of section 13(1) and (2).

64. In other words, in my view, in the case of a purported tenancy, neither the purported landlord who does not have actual occupation nor the purported tenant who does not have the necessary intention to possess is a person in whose favour the limitation period can run. This is not surprising at all, for land may be in occupation by a trespasser for many many years without there being any adverse possession against the true owner due to the lack of an intention to possess. The Court of Final Appeal decision in Wong Tak Yue, supra, is a good example of a former tenant/trespasser in long occupation of over 30 years failing to establish adverse possession against his former landlord/the true owner for want of the necessary intention to possess. And section 13(1) itself actually envisages the situation of there being no person in adverse possession in which case the limitation period will not begin running, whereas section 13(2) specifically provides for the situation of a break in continuous adverse possession within the limitation period in which case time will stop running and will only begin to run afresh when new adverse possession is taken. To the true owner, such a "tenant" is no different from any other trespassers. He is not concerned with how this purported tenant came to occupy his land. He may sue to evict the purported tenant anytime without the sanction of any limitation period.

65. The above is not a mere academic analysis of the position. It has direct bearing on the position of Mr. Cheung under his "tenancy" from the 1st Plaintiff to be discussed below.

66. But so far as Mr. Lam's first argument is concerned, in my judgment, on the proper construction of section 13, subject to the exceptions provided in subsection (3), adverse possession by a trespasser cannot take the form of actual occupation not by himself but by a "tenant" of the trespasser/"landlord" under a "tenancy" between the two.

67. Thus far I have used "actual occupation" as a convenient term to distinguish the type of "possession" required by section 13(1) and (2) from the "possession" a trespasser/"landlord" under a "tenancy" may be said to have during the term of the purported tenancy. Of course, I do not intend by the use of that term to depart from the established case law on what may or may not constitute "possession" of land or any part thereof within the meaning of "adverse possession", short of a purported tenancy situation faced by me in this case; and my use of the term "actual occupation" in this judgment should be understood accordingly.

68. The above conclusion of mine relating to the meaning of "possession" in a purported tenancy situation sits well with the well established principle that a good possessory title may be established by a claimant based not only on his own period of adverse possession but also any preceding (but unbroken) period(s) of possession by another/others. All I am saying is that a trespasser who parts with actual occupation of the land before the expiry of the limitation period does not acquire a good possessory title to the land. It does not prevent his succeeding trespasser from accumulating a sufficient period of adverse possession (counting if possible his initial period of adverse possession as well) and eventually obtaining a good possessory title against the true owner. Section 13(1) only refers to "some other person" but does not require that this person must remain unchanged throughout the whole period of limitation. But one cannot mount a case of adverse possession in reverse. In other words, so far as the first trespasser who has left prematurely is concerned, he does not acquire a possessory title against the true owner, and cannot "appropriate" his succeeding trespasser's possession as his to make up for the missing years.

69. In my judgment, it does not matter at all whether the first trespasser parts with actual possession of the land in favour of his "tenant" pursuant to a purported tenancy or is succeeded in whatever other manner by a subsequent trespasser. In the former case, his actual possession ceases with the creation of the "tenancy" and the taking up of actual occupation of the premises by the "tenant". So far as he is concerned, he has not occupied the land for long enough to obtain a possessory title, and his "tenant's" occupation of the land cannot be counted as part of his occupation and thus continued "possession" of the land for the purpose of the section 13(2).

70. Therefore on the facts of the present case, the occupation of the subject lot by Mr. Cheung as from 1967 cannot per se be regarded as occupation or continued "possession" by the 1st Plaintiff within section 13(2).

71. For the sake of completeness, I should add that as regards Mr. Cheung and his actual occupation of the subject lot for 30 years under a "tenancy" granted by the 1st Plaintiff (as renewed), there was no adverse possession by Mr. Cheung against the Defendant. As analysed above, Mr. Cheung simply lacked the necessary intention to possess. His long occupation of the land did not constitute any adverse possession against the Defendant, and he did not obtain any possessory title to the land against the Defendant.

Proper construction of sections 12(3) and 13(3)(b)

72. This leaves Mr. Lam with his second argument based on sections 12(3) and 13(3)(b) of the Ordinance, relating to receipt of rent by a wrongful claimant from a tenant as "deemed" adverse possession. (I should add that section 13(3)(a) sets out another situation of deemed adverse possession relating to rentcharge which is irrelevant in the present case.)

73. Section 13(3)(b) provides that receipt of rent under a written lease by a person wrongfully claiming, in accordance with section 12(3), the land in reversion shall be deemed to be adverse possession of the land. Under section 12(3), essentially,

(a) if there is a person, whom we may call the tenant, who is in possession of land by virtue of a lease in writing (by which a rent of not less than $20 is reserved);

(b) if the rent is received by another person "wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease", whom we may refer to as the wrongful claimant; and

(c) if no rent is subsequently received by the person "rightfully so entitled", whom we may call the true owner; then the right of action of the true owner to recover the land shall be deemed to have accrued at the date when rent was first received by the wrongful claimant, "and not at the date of the determination of the lease".

74. For all practical purposes, the reference in the present context to a person being "entitled to the land in reversion immediately expectant on the determination of the lease" is a reference to that person as the immediate landlord of the tenant under the lease.

75. Quite plainly, the section applies to the situation where there is a lease in writing granted by the true owner to a tenant, and then a wrongful claimant comes along, claims to be the landlord and receives the rent from the tenant, resulting in no rent being received by the true owner/landlord. In that case, the wrongful claimant may establish a case of adverse possession of the land against the true owner upon the expiry of the limitation period based wholly or partially on his period of receipt of rent from the tenant plus any necessary period of actual possession after the expiry of the lease. If by the time of expiry of the limitation period, the term of the lease has not yet expired, then upon the expiry of the lease, the wrongful claimant, rather than the true owner, will be the person entitled to the return of possession of the land from the outgoing tenant.

76. Mr. Lam, in reliance on the two sections, argued that the 1st Plaintiff's receipt of rent from Mr. Cheung, his tenant, for over 30 years in respect of the latter's "tenancy" of the suit premises falls within the two sections and a case of deemed adverse possession is thus made out. He argued that the fact that the "tenancy" was not granted by the true owner or someone authorized by him, and indeed was granted by the wrongful claimant, does not matter at all, and the two sections are wide enough to cover the situation.

77. In this regard, Mr. Lam's second argument has the direct support of Bligh v Martin where the learned judge held as a matter of construction that the relevant statutory provisions are couched in sufficiently wide language to cover the receipt of rent by a wrongful claimant from a "tenant" under a "lease" in writing created not by the true owner but by the wrongful claimant himself. So on the facts in that case, the plaintiff/wrongful claimant there was able to utilise his receipt of rent from the true owner under a tenancy granted by him to the true owner as comprising part of his adverse possession against the true owner.

78. In the local case Wong Luen Chun, Barnett J. followed this decision and applied it to the situation of wrongful receipt of rent from tenants by one of the three co-owners to the exclusion of the other two co-owners. The learned judge held that this amounted to adverse possession under section 12(3), and a title by adverse possession was established by the wrongful owner after the lapse of the relevant period of limitation:

"As I commented during the course of the trial, a person who has not been in actual possession or occupation of the land would not seem to have a strong claim for adverse possession. Mr. Kwan was able to deal with this point by relying on the case Bligh v Martin [1968] 1 WLR 804. Mr. Kwan submitted that a person claiming adverse possession may do so although he has not been in actual possession or occupation, but simply in receipt of rent. I did not understand Mr. Law, who appeared on behalf of the defendant, to disagree.

[The judge then summarized the relevant facts in Bligh v Martin, quoted our sections 12(3) and 13(3)(b) as well as part of the judgment from Bligh v Martin already extracted above, and continued.]

That conclusion [of Pennychuick J.] seems to me to be unassailable. But, by virtue of the provisions of the Limitation Ordinance to which I have referred, it is confined to the position where there is a lease in writing. I, for my part, would hesitate to extend the position beyond that.

In our case, in my judgment, sufficient documentation has been produced which constitutes a lease in writing. Even if it does not, I am satisfied that I can properly draw the inference that originally there was such a lease. So, applying the decision in Bligh to the present case, prima facie the 2nd plaintiff's family had established a claim by adverse possession probably by 1954 and certainly by 1974." (at pp. 127H to 128H)

79. It should be carefully noted that in Wong Luen Chun, the person relying on section 12(3) to claim adverse possession was in fact a co-owner of the suit property. As such it is most doubtful whether she can really be said to have been a wrongful claimant to "the land in reversion immediately expectant on the determination of the lease". Thus analysed, the actual decision may well not concern section 12(3) or section 13(3)(b) at all. In any event, as a co-owner, the "wrongful claimant" had the authority to grant a lease in respect of the property and indeed to receive rent from the tenant, although she ought to have accounted the rent so received to her co-owners, which she wrongfully failed to do. Therefore the decision does not, in any event, really support Mr. Lam's argument that the two sections apply to a "tenancy" granted not by the true owner, for the tenancies there were indeed granted by a co-owner. However, taking a more general view of the case, it does signify the Court's broad acceptance of Bligh v Martin as representing good law on this subject.

80. In fact, apart from Wong Luen Chun, Bligh v Martin was also followed by Deputy High Court Judge Muttrie in Chan Kwok Yun v Ng Chan Shi HCMP3929/98 (16/7/99). In that case, the true owners did not enter any appearance in the proceedings and the judgment was obtained by the plaintiff in the absence of his opponents. The learned judge accepted the correctness of Bligh v Martin and applied it to the facts of the case before the Court. In that case, the tenancies in question were not granted by the plaintiff who had been collecting and pocketing the rent from the tenants since 1978. However, from the judgment, it is not clear whether the tenancies were granted by or on behalf of the true owners or by someone unauthorized to do so. If they were granted by or on behalf of the true owners, I fully agree with the result. If they were granted by a person unauthorized to do so, this decision may be regarded as a decision in support of the preposition that the lease need not be granted by the true owner (or on his behalf) but by some unauthorized person.

81. The construction of section 12(3) to the effect that the section applies not only to a lease granted by or on behalf of the true owner, but to a purported lease granted by a wrongful claimant (or some other unauthorized person), does not appeal to me. In my judgment, the starting point must be the wording of section 12(3) itself. First of all, it refers to a " person ... in possession of land by virtue of a lease in writing". I can accept that just looking at this phrase, the "lease" need not be construed as a lease granted by or on behalf of a person with good title to the land, i.e. the true owner, but could mean one granted by a wrongful claimant.

82. The section then refers to the receipt of "rent" by "some person wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease". Again I would accept that this could refer to the receipt of rent by a person, i.e. the wrongful claimant, claiming wrongfully to be the person entitled to the reversionary interest, whether under a lease granted by the true owner or a purported lease granted by himself.

83. But the next phrase "and no rent is subsequently received by the person rightfully so entitled" cannot be so explained away. The words "rightfully so entitled" must be read together with the preceding phrase, (i.e. "some person wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease"), and are quite plainly a reference to the true owner's rightful entitlement to the reversionary interest under the lease. In my judgment, these words presuppose quite obviously the validity of the lease and thus the rightful entitlement of the true owner/landlord to the reversionary interest under the lease, and therefore his right to receive rent. All this presents no problem at all if the lease is created by or on behalf of the true owner in the first place. It makes good sense to refer to his rightful entitlement to the reversionary interest under the lease and thus his right to receive rent.

84. However, if the lease is created by the wrongful claimant or is otherwise an unauthorized one, then regardless of any tenancy by estoppel as between the wrongful claimant/purported landlord and the "tenant", the lease is null and void as between the true owner and the purported tenant; and no leasehold interest is created in favour of the purported tenant, nor by the same token is any reversionary interest vested in the true owner at all. It would be a complete misnomer to refer to the true owner as having a reversionary interest in his land, which he has never let out (so far as he is concerned). His interest in the land is a present one as a landowner entitled to possession rather than a reversionary one as a landlord. There is no simply no "rent" for the true owner to receive from the purported tenant; rather he is entitled to receive mesne profits, not rent, from the so-called tenant who as a matter of law is no more than a trespasser to him.

85. It is perhaps possible for the true owner to ratify or adopt the purported tenancy as his own (notwithstanding that it is otherwise a nullity to him), and once that is done, he would be the person rightfully entitled to the reversionary interest and he would have rent to receive. But then that would be a case of a ratified lease, which is not my present subject of concern. What is clear is that section 12(3) will not begin to apply unless and until there is ratification or adoption of the purported lease by the true owner (assuming that that is possible), thereby giving rise to his rightful entitlement to the reversionary interest and right to receive rent. And if the true owner was never aware of the purported lease, there could never be any ratification or adoption, and the subsection could never apply to give rise to any deemed adverse possession.

86. The ending phrase in the subsection,

"the right of action of the last-named person to recover the land shall be deemed to have accrued at the date when the rent was first received by the person wrongfully claiming as aforesaid and not at the date of the determination of the lease",

confirms the above construction of mine. For in the normal case of a landowner/landlord whose interest in the land during the currency of the tenancy is only a reversionary one, the right of action will only accrue against the landlord in favour of a trespasser upon the expiry or earlier determination of the leasehold interest and the coming into possession of the landowner/landlord's reversionary interest, as per section 9(1) of the Ordinance. But if section 12(3) is satisfied, the date of accrual of action will be advanced to the date of first receipt of rent by the wrongful claimant. But section 9(1) is clearly a section dealing with a landowner who has granted a tenancy of his land to a tenant so that his interest in the land becomes a reversionary one. It is not concerned with the situation of a purported tenancy not granted by or on behalf of the landlord but by a wrongful claimant (or some other unauthorized person). For in such a case the landowner's interest in the land would remain a present one, and it would not, by reason of the purported tenancy which is a nullity to him, become an "interest in reversion" referred to in section 9(1). In other words, section 9(1) is not concerned with such a purported lease, and the obvious reference to section 9(1) in the ending phrase in section 12(3) is thus an unmistakable reference to a lease granted by or on behalf of the landowner rather than a purported lease granted by a wrongful claimant (or any other unauthorized person).

87. And looking at section 12(3) as a whole once again, I would say that the more natural and correct construction of the earlier phrases "lease in writing" and "the rent is received by some person wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease" is that they refer to a "lease" granted by or on behalf of the true owner to his tenant (rather than a purported lease granted by the wrongful claimant or some other unauthorized person to the so-called tenant), and to a wrongful claimant's interception of rent lawfully due under such a genuine (and not purported) lease.

88. For my part, I would therefore construe section 12(3) as applicable only to the situation where there is a lease in writing granted lawfully by or on behalf of the true owner, and not to a purported lease "granted" by a wrongful claimant (or some other unauthorized person).

89. So far as authorities are concerned, with the greatest respect, I am not persuaded by the reasoning in Bligh v Martin, which seems to focus more on (our) section 13(3)(b) rather than the more crucial section 12(3) to which section 13(3)(b) refers and the proper construction of the wording used in section 12(3). In any event, the decision is not binding on me and I respectfully decline to follow this part of the decision.

90. As regards the decision by Barnett J., apart from the limitations of the actual decision as an authority on the proper construction of section 12(3) or an authority in support of Mr. Lam's second argument in this case mentioned above, the case simply followed this part of the decision in Bligh v Martin without any separate discussion of the issue in question. The English decision was accepted as correct by counsel acting for the other side (p. 127I). Moreover, the learned judge was prepared to find on the evidence adduced before him that in fact the so-called "co-owners" were in fact one and the same person with several aliases, and thus there was no question of adverse possession arising at all (p. 130A). Therefore although the learned judge put it the other way round, it is certainly open for one to say that the discussion relating to adverse possession in that case was also for that reason obiter in nature. In any event, the first instance decision is not binding on me, and I have indicated above my reasons for not following this part of the decision in Bligh v Martin.

91. As for Chan Kwok Yun, I have already mentioned above the unsatisfactory aspects of this decision as an authority on the issue under discussion. Insofar as this decision may be taken as a case on unauthorized tenancies granted not by the true owners, I respectfully decline to follow it. As I said, the Court did not have the benefit of hearing argument from the true owners who did not appear, and Bligh v Martin was simply treated as good law without any discussion.

92. For the sake of completeness, I should mention that in Hilder Company Limited v Occupier(s) of Premises HCMP1534/2001 Burrell J. (17/12/2001), the unauthorized occupier of land sought unsuccessfully to establish a case of adverse possession by reliance on, inter alia, receipt of rent from oral tenancies he had granted to others for use of the suit land. Burrell J. referred to Barnett J.'s hesitation expressed in Wong Luen Chun to extend the application of sections 12(3) and 13(3)(b) beyond the case of a lease in writing and rejected the occupier's argument on the ground that the absence of a written lease was fatal. There was no further discussion of the other aspects of the decision in Wong Luen Chun. For my part, I certainly see no justification for extending the scope of application of sections 12(3) and 13(3)(b) beyond the case of a written lease. Hilder does not, however, turn on the correct construction of the two sections relating to their actual scope of operation, apart from deciding that they do not apply to an unwritten lease.

93. My dissatisfaction with this part of the decision in Bligh v Martin was apparently shared by Rix J. in an unreported judgment in Sturminster Holdings Ltd v James (20/5/97), a case of alleged adverse possession based on, amongst other things, receipt of rent under an unauthorized lease granted by a trespasser:

"Mr. Cherryman [counsel for the trespasser's successor in title] had one further arrow in his quiver and that was by reference to para.8(3)(b) of Sch I of the 1980 Act. That paragraph reads:

"For the purposes of this paragraph ... (b) receipt of rent under a lease by a person wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease shall be treated as adverse possession of the land."

In this connection Mr. Cherryman referred me to Bligh v Martin [1968] 1 All ER 1157, [1968] 1 WLR 804, a case decided on the Limitation Act 1939 which, however, contained materially identical provisions to that of the 1980 Act (see in particular at page 812H-813H of the latter report). For these purposes Mr. Cherryman relied upon the rent ... which Mr. Richards [i.e. the trespasser] received under the 1973 strip lease [i.e. the unauthorized lease granted by the trespasser]. Mr. Cherryman effectively conceded that the statute on his construction made no sense, but he said that it was not for him or, perhaps of more importance, for me to quibble with a clear statutory provision, even though it went wider than might have been intended.

In my judgment, however, the statute does not go as far as Mr. Cherryman submits. It would be the most unfair nonsense if it did. It would mean that a man could secretly let someone else's land or home to a third party, collect the rent for 12 years and base a claim for adverse possession on nothing more. In Bligh's case the act of letting and the receipt of rent were open, for the letting was to the paper owner himself, who seems to have overlooked his own title.

Mr. Sheridan submits that para.8(3)(b) is to be explained as dealing with the interception of rent from the true owner. That may be so but it is somewhat difficult to square that with Bligh, which does not appear to stress the question of interception. In a sense, however, I see that it might be said that the lessor in Bligh was intercepting the true owner's rent, for he was receiving it from the owner, but whether that be so or not I hold that to amount to adverse possession under para.8(3)(b) the receipt of rent must be open. It was in Bligh of course, for the rent was paid to the lessor by the owner himself and he therefore knew everything there was to know about it. That, however, is not so in the present case where, so far as Mr. Ingram [i.e. the true owner] in London was concerned, the letting of the strip to the partnership was a purely private arrangement between the parties to that lease and was not open to him.

The statute says nothing about openness, that is a gloss imposed by jurisprudence, and I hold that it is a necessary ingredient of a good claim to adverse possession under para.8(3)(b). Mr. Cherryman's final shot therefore fails and for all these reasons I hold that the Plaintiff is entitled to the declaration of ownership for which it claims."

94. Rix J. was content with putting a gloss on the construction of paragraph 8(3)(b) of Schedule I of the English Limitation Act 1980 which is similar but not identical in wording to (our) sections 12(3) and 13(3)(b) that were construed by Bligh v Martin, by requiring the purported lease to be an "open" one known to the true owner. That is perhaps understandable as the wider wording of paragraph 8(3)(b) is more in favour of including unauthorized leases within its ambit of application than our local provisions, since the former does not refer to the true owner's "rightful entitlement" to the reversionary interest; and after all Bligh v Martin is a 30-year old English authority that is perhaps of more direct relevance to the learned judge than to us in Hong Kong.

95. Anyhow, for my part I see no justification for following the same course in my construction of our section 12(3). All I would like to note is that if adding the gloss suggested were the correct way of interpreting the subsection, then on the facts of the present case, the Plaintiffs would equally fail because the tenancy in favour of Mr. Cheung was just a "purely private arrangement" between the 1st Plaintiff and Mr. Cheung and was not an "open" one known to the Defendant.

96. I have thus come to the conclusion that section 12(3) and therefore section 13(3)(b) do not assist the Plaintiffs. I reject Mr. Lam's second argument.

Outcome

97. The upshot of all this is that the pre-tenancy period between sometime after 1960 and the creation of the tenancy in favour of Mr. Cheung in 1967 is insufficient in length by itself to ground a claim of possessory title against the Defendant. Moreover, the thirty-year occupation by Mr. Cheung cannot be relied on by the Plaintiffs as the 1st Plaintiff's adverse possession of the land, and in fact it broke the continuity of the adverse possession by the 1st Plaintiff himself starting from sometime after 1960. In other words, there was no continued adverse possession for a total period of 20 years, and the Plaintiffs' claim of possessory title must fail.

98. The Plaintiffs' claim is dismissed.

99. The Plaintiffs succeed on all issues but one that is fatal, and thus fail in their claim of possessory title. They only lose on the issue because I decline to follow an English as well as some local authorities all in their favour. In any event, it is fair to say that much of the time, effort and costs expended by both parties in the action including the trial were in relation to the other issues eventually won by the Plaintiffs. The Defendant does not simply put the Plaintiffs to proof of their case on the facts, but puts forward a positive case which I do not accept. The Defendant succeeds on one and only one legal issue and claims victory.

100. All this should, in my judgment, be properly reflected in the costs order. Bearing all these circumstances in mind, and in the exercise of my discretion, I make an order nisi that the Plaintiffs pay to the Defendant one-third of his costs of the action to be taxed if not agreed; and that the Defendant's own costs be taxed in accordance with the Legal Aid Regulations. Unless either side applies to vary this order nisi as to costs within 14 days after this judgment is handed down, the order will become an absolute one upon the expiry of the 14-day period.

101. Lastly, I would like to thank counsel for their patient assistance.