CHAN FOK YI, the executor of the estate of CHAN LI MUI, Deceased v. KOO LOI SHING AND ANOTHER

DCCJ 3158/2016

[2022] HKDC 62

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3158 OF 2016

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J U D G M E N T

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1.  This case concerns a dispute in the interest of Lot No. 25 in D.D. 79, North, New Territories (“Lot 25”).

Background

2.  It is not disputed that Lot 25 forms part of the estate of the Deceased, who passed away in April 2007. The plaintiff was appointed the other executor of the estate of the Deceased in February 2016 and became the only executor in July 2016.

3.  In June 2016, the plaintiff commenced this action to claim for, inter alia, vacant possession of Lot 25 including the area which was alleged to be occupied by the 1^st defendant.

4.  In December 2018, the plaintiff partitioned Lot 25 into Lot 25 Section A (referred to in the pleadings and hereinafter as “the Area”), Section B (referred to in the pleadings and hereinafter as “the Canopy”)  and Remaining Portion (referred to in the pleadings and hereinafter as “the Garden”). The plaintiff sold the Canopy to a third party around the same time.

5.  The 1^st defendant claimed adverse possession of the Area (which he claimed to have occupied since 1966)  and the Garden (which he claimed to have occupied and use since 1967). He also claimed to be told by his great grandmother before her death in 1971 that she had paid HK$30 to a male person to buy the house built on the Area and the Garden in 1968.

6.  The plaintiff has erected a wire fence around the Garden in early 2017 and claims to have recovered possession to the exclusion of all others up to now. The 1^st defendant is seeking damages in respect of this in his counterclaim.

Preliminary issue

7.  The 1^st defendant, in his counsel’s Opening Submission, raised an alternative case (paragraph 28(a)  of the 1^st defendant’s Opening Submission)  that the main issues were “whether the 1^st defendant has established exclusive factual possession…for at least 20 years at the material times or 12 years before the commencement of the action…”

8.  The plaintiff objected to the alternative case of the 1^st defendant claiming exclusive factual possession “for 12 years before the commencement of proceedings”.

9.  During the hearing, the court has ruled against allowing the 1^st defendant to pursue the alternative case and has given reasons. There is no need to repeat this here.

10.  As such, the 1^st defendant’s case as pleaded is that he and members of his family have occupied the Area commencing from around 1966 and the Garden commencing from around 1967. This dated from prior to 1991 so the 1^st defendant’s case was that he has exclusive factual possession for at least 20 years.

The legal principles

11.  The law on adverse possession is trite and need not be repeated in details here: in short, to established possession the 1^st defendant need to show factual possession and an intention to possess for a period of at least 20 years.

12.  It is also trite that once the 1^st defendant established adverse possession and extinguish the owner’s title, a subsequent acknowledgement cannot revive the title (Chong Yuk Por v Chan Kam Muk DCCJ 3826/2007).

The plaintiff’s evidence

13.  The plaintiff’s first witness was Chan Choi Mei (“Ms. Chan”). The plaintiff is her father and, in view of his old age, Ms. Chan assisted him with his role as the executor in this matter, including dealing and liaising with the plaintiff’s solicitors, Messrs. Fu & Cheng (“Fu & Cheng”).

14.  Ms. Chan confirmed that no plots of land were individually listed in the Deceased’s Will and no rental agreements were found in the Deceased’s personal belongings. However, she was aware that the Deceased had been receiving rental income for a living. The plaintiff had instructed Fu & Cheng to investigate the estate of the Deceased during which Lot 25 and also another piece of land close by, Lot 37, amongst others, were revealed. The plaintiff had then instructed Fu & Cheng to follow-up on such matters.

15.  Ms. Chan never attended Lot 25, and her evidence is restricted to what she heard as reported by the handling solicitor from Fu & Cheng, Cheng Fung Yee (“Ms. Cheng”), or from others. In particular, paragraphs 8 to 20 of Ms. Chan’s witness statement (Trial Bundle B, pages 181 to 185)  stated:

a.  On 11 May 2016, Ms. Cheng was accompanied by a staff of Fu & Cheng (whom we now know is Ng Yip Kai (“Mr. Ng”, the plaintiff’s second witness)  and a surveyor to attend the relevant properties of the estate of the Deceased including Lot 25.

b.  Ms. Cheng said that they were greeted by the 1^st defendant who was occupying the house in the south side of Lot 25.

c.  The 1^st defendant admitted that he was a tenant of that piece of land paying a monthly rent of HK$700.

d.  Ms. Cheng then prepared a new tenant agreement (the “Draft Tenancy Agreement”, enclosed as attachment 1 of Ms. Chan’s witness statement, Trial Bundle B pages 190-193).

e.  The 1^st defendant then explained that he needed time to find the old tenancy agreement and to consider whether to sign a new agreement, so he did not sign the Draft Tenancy Agreement at the time.

f.  The 1^st defendant then accompanied Ms. Cheng and others to help them to enter Lot 37 to meet the occupier, Mr. Yeung Kam Wun (“Mr. Yeung”)  who did sign the tenancy agreement regarding Lot 37 during that meeting (“Mr. Yeung’s Tenancy Agreement”).

g.  Later, Mr. Yeung also explained that he needed to consider the length of rental period so it was arranged between Ms. Cheng, the 1^st defendant and Mr. Yeung to meet again on 14 May 2016.

h.  On 14 May 2016, when Ms. Cheng returned to Lot 37, the son of Mr. Yeung requested to cancel Mr. Yeung’s Tenancy Agreement.

i.  At this meeting, the 1^st defendant changed his story and claimed that he had, in fact, occupied his land without paying rent for many years.

j.  As such, Ms. Cheng informed both that the disputes would be settled in the court via legal proceedings. As requested by Mr. Yeung’s son, Ms. Cheng cancelled Mr. Yeung’s Tenancy Agreement (enclosed as attachment 2 of Ms. Chan’s witness statement, Trial Bundle B, pages 195-196).

k.  Later on that day, Ms. Cheng received a telephone call from the 1^st defendant claiming that he, the 2 household of Lot 37 and the household on Lot 25 (a total of 4 households)  had a meeting and agreed that all 4 would pay rent but would not sign any tenancy agreement. He also requested the plaintiff’s bank account details for rental payments.

l.  Ms. Chan enclosed what appeared to be a screen capture of Ms. Cheng’s mobile phone showing an incoming call from the 1^st defendant at 14:57 on 14 May 2016 (as attachment 3 of Ms. Chan’s witness statement Trial Bundle B, page 198)

m.   In view that there was not yet any bank account for the estate, the plaintiff instructed his solicitors that the rents should be paid into the bank account of Fu & Cheng for the time being.

n.  As such, a staff of Fu & Cheng (whom we now know to be Mr. Ng as well)  attended Lot 25 on 19 May 2016 to affix, amongst others, a letter (also dated 19 May 2016)  to (what Mr. Ng believed to be)  the 1^st defendant’s gate.

o.  The letter summarized the discussions between Ms. Cheng and the 1^st defendant etc. and provided the bank account details of Fu & Cheng (see attachment 4 of Ms. Chan’s witness statement, Trial Bundle B pages 200-201).

p.  Ms. Chan also attached a photograph purporting showing this letter affixed on the gate of the 1^st defendant (see attachment 5 of Ms. Chan’s witness statement, Trial Bundle B page 203).

q.  The 1^st defendant did not pay any rent so Fu & Cheng affixed a vacant possession notice dated 22 June 2016 on the gate of the 1^st defendant.

r.  The plaintiff conducted negotiation with the 2 occupiers of Lot 37 who bought the occupied areas of Lot 37 and that dispute was settled.

s.  The other occupier of Lot 25 also purchased the occupied area from the plaintiff on 10 December 2018. Lot 25 was therefore sub-divided. Lot 25 subsection B was the part sold, subsection A was now the Area and the Remaining Portion was the Garden.

t.  In early 2017, under the plaintiff’s authorisation and assistance from relatives, workers have fenced up the Garden. At that time, Ms. Chan understood from her relatives that some old fencing was found but such were old and partly fallen down and in any case did not completely enclose the Garden. The 1^st defendant has never taken any action after the Garden was fenced up.

16.  Mr. Ng, a clerk working at Fu & Cheng at the time, gave evidence next. He has accompanied Ms. Cheng to the visit to Lot 25 on 11 May 2016 (and he has also re-visited on 19 May and 12 June 2016 to serve various letters)  and so he is a witness to the events on that day.

17.  Mr. Ng’s evidence was that:

a.  On 11 May 2016, when they met the 1^st defendant coming out of the gate of the second house they visited, he heard Ms. Cheng informing the 1^st defendant that she was the lawyer acting for the landlord, that the land belonged to her client and that she would be dealing with the land belonging to the landlord, and she asked the 1^st defendant in what capacity was he occupying that piece of land (paragraph 5 of Mr. Ng’s witness statement, Trial Bundle B page 255).

b.  The 1^st defendant told Ms. Cheng that he was a tenant of the house (paragraph 6 of Mr. Ng’s witness statement, Trial Bundle B page 255). Mr. Ng also provided details like he was then instructed by Ms. Cheng to alter the solicitor’s letter to read “delivered in person” (in Chinese)  and wrote the time and time, the alterations of which was then signed by Ms. Cheng (Appendix 4 of Mr. Ng’s witness statement, Trial Bundle B page 272)  and delivered the letter to the 1^st defendant.

c.  Ms. Cheng then asked the 1^st defendant for assistance regarding the first house because there was no response when they previously tried knocking on the gate. Together with the 1^st defendant, they returned to the first house and the 1^st defendant also knocked on the gate but again there was no response.

d.  Mr. Ng also recalled the conversation between Ms. Cheng and the 1^st defendant including his admission that there was a signed tenancy agreement and that the monthly rent was HK$700 etc. Ms. Cheng informed the 1^st defendant that the landowner has passed away but the executor of the owner’s estate wished to sign a new tenancy agreement with him, and asked the 1^st defendant for his Hong Kong Identity Card for record to prepare the new contract (Mr. Ng’s witness statement paragraph 6, Trial Bundle B pages 255-256).

e.  The 1^st defendant then produced his Hong Kong identity Card and Ms. Cheng took a photograph of it (Appendix 5 of Mr. Ng’s witness statement, Trial Bundle B pages 274 and 275). Ms. Cheng then requested the 1^st defendant to produce his (existing)  tenancy agreement, but the 1^st defendant replied he did not know where he placed it and needed to search in his home.

f.  Ms. Cheng suggested that he could rent the house in the same condition and could sign the tenancy agreement right away. But the 1^st defendant stalled and said he needed to look for the old tenancy agreement and also need to consider.

g.  However, on Ms. Cheng’s request, the 1^st defendant gave her his contact telephone number, which was recorded on the Draft Tenancy Agreement (also enclosed as Appendix 6 of Mr. Ng’s witness statement, Trial Bundle B, page 279)  (paragraph 7 of Mr. Ng’s witness statement, Trial Bundle B, page 256).

h.  The 1^st defendant then helped Ms. Cheng concerning her inquiries about Lot 37, he told her that his two neighbours were also tenants, and then actually voluntarily took Ms. Chang and Mr. Ng to enter Lot 37 to meet Mr. Yeung etc. (paragraphs 8-10 of Mr. Ng’s witness statement, Trial Bundle B, page 257).

18.  As such, the evidence of Mr. Ng is very much in line with what Ms. Chan claimed that she was told by Ms. Cheng regarding the events on 11 May 2016.

19.  During the cross-examination of Mr. Ng, much time was spent on questioning a possible mix up on his part of the gates of the first and second house when he returned to Lot 25 on 19 May 2016. However, there was no convincing challenge of the rest of his evidence, especially those regarding the events on 11 May 2016.

The 1^st defendant’s evidence

20.  The 1^st defendant claimed that he come to Hong Kong in 1966 and had lived at the Area with his family including his father, mother, brothers and his great grandmother. He claimed that his great grandmother told him in around 1971 (before she passed away)  that she bought the Area (or rather the house in the Area)  and the Garden for HK$30 in 1968 from a person called “Ar Pin Lo” (or “the Opium Guy”).

21.  The 1^st defendant also conceded that he was absent from the Area and the Garden for a period of 10 years when he allegedly fled Hong Kong for the mainland in 1992 and was then arrested and jailed from 1997 to 2002.

22.  The 1^st defendant also produced various documents to support his occupation of the house in the Area e.g. a document that shows that his reported address to the Immigration Department from 1980 to 2017.

23.  However, under cross examination, the 1^st defendant changed his evidence and revealed that he had another home in the mainland. However, his evidence of when he was living there was rather inconsistent.

24.  As for the incident in May 2016, the 1^st defendant’s account lacked details or explanations (especially when compared to Mr. Ng’s very detailed account).

25.  He simply stated that:

a.  On 11 May 2016, a lawyer surnamed Cheng (who must have been Ms. Cheng)  visited his home and claimed to be instructed by the owner of the Lot and asked him to sign a tenancy agreement to pay rent. Ms. Cheng requested for his Hong Kong Identity Card and his mobile number and he gave them to her. He claimed that he could not remember be served any letter from the lawyer (paragraphs 13 to 15 of the witness statement of the 1^st defendant, Trial Bundle B page 305).

b.  He immediately told Ms. Cheng that (as I translated): “I and my family members have always lived here and had never paid any rent to anyone…”  Then Ms. Cheng told him that the owner was old and wished that the 1^st defendant would sign a tenancy agreement. The 1^st defendant stated, “At the time, I did not promise her, I expressed that I need to consider this, my aim was to stall this and to consider what to do next.” (paragraphs 16 and 17, Trial Bundle B page 306).

c.  He had further discussions with the lawyer regarding the tenancy agreement when she returned on 14 May 2016 when he refused to sign the tenancy agreement or pay rent (paragraph 18, Trial Bundle B page 306).

d.  As for the telephone conversation with Ms. Cheng on 14 May 2016, he claimed that he saw an unanswered call on his phone and called back, and found out that it was from Ms. Cheng, so he repeated that he would not pay rent or sign any tenancy agreement (paragraph 19, Trial Bundle page 306)

e.  He also denied any proper oral agreement to pay rent nor receiving the latter dated 19 May 2016 from Fu & Cheng.

Analysis of the evidence on intention to possess

26.  Although I think Mr. Ng might be confused about which gate belongs to the 1^st defendant’s house when he returned on 19 May 2016 and might have posted the letter from Fu & Cheng dated 19 May 2016 on the gate of Lot 25 Section B and not on the 1^st defendant’s gate, this should not distract from the issue of truthfulness of what he heard the 1^st defendant said on 11 May 2016 including the admission that he was a tenant paying HK$700 per month.

27.  Mr. Ng was a clerk at Fu & Cheng but he no longer worked there: he left in January 2019 and now worked as a security guard at the airport (Trial Bundle B page 254). There was no challenge from the defendant as to his independence as a witness. There is no evidence to suggest that he has any interest in the outcome of this case nor why he might be a dishonest witness. Furthermore, Mr. Ng has provided plenty of details supported by various photos and documents (attached to his witness statement)  to support his version of events on 11 May 2016 so it would be unlikely that his memory of that day was somehow mistaken.

28.  Further, it could not be disputed that the 1^st defendant had provided Ms. Cheng and Mr. Ng his name, telephone number, HKID number and the numbers of occupiers of the house in the Area, which were all recorded on the Draft Tenancy Agreement.

29.  The question must be why the 1^st defendant would do so if he had all along believed that he (or his family)  had owned the Area since 1966 (or at least since around 1971 when he heard from his great grandmother that she bought the house and Garden in 1968).

30.  When asked under cross-examination on how he replied when asked to sign a tenancy agreement on 11 May 2016, the 1^st defendant was very evasive. At first, he claimed that he said “nothing”. Then he claimed he asked Ms. Cheng, “Sign what tenancy agreement?” and “I would not pay a cent.”

31.  If this had been the 1^st defendant’s position right from the start, why would he disclose his personal details to Ms. Cheng?

32.  The 1^st defendant explained that he disclosed such details because “they threatened me with legal action” and “I was afraid”.

33.  I do not believe this.

34.  Firstly, this was the first time the 1^st defendant claimed that he was “threatened”: none of such allegation ever appeared in the Defence or the 1^st defendant’s witness statement. If the 1^st defendant had really been threatened and was somehow forced to disclose personal details, this would have been an important issue and would not likely be omitted in the pleadings.

35.  Secondly, Mr. Ng’s account of events contained details like what the 1^st defendant told him as his monthly rent and how the 1^st defendant “stalled” signing the Draft Tenancy Agreement by claiming that he needed to look for the old tenancy agreement. These are details that Mr. Ng would unlikely to fabricate nor be mistaken about. Mr. Ng account of events were logical and reasonable and many aspects of it was supported by various documents.

36.  Thirdly, if the 1^st defendant had really heard from her great grandmother as long ago as 1971 that she had purchased the house and had truly believed that he (and/or his family)  was the owner since 1966 (or 1968), imagine the scenario when one day some strangers knocked on the door and asked him to sign a tenancy agreement: why would the 1^st defendant, under the circumstances, either said “nothing”, or reply in the line of “I would not pay a cent”?

37.  Instead, I would imagine that the 1^st defendant should be very surprised and replied immediately: “What do you mean? Are you crazy? We are the owner! We bought this place many decades ago!”

38.  I cannot imagine why the 1^st defendant would entertain any further discussions on signing any tenancy agreement or rent to be paid, let alone agreeing to (and actually bothering to attend)  another meeting a few days later.

39.  Even on the 1^st defendant’s own evidence (paragraph 16 of his witness statement, Trial Bundle page 306), he only told Ms. Cheng that “he and his family had lived here all along and never paid rent”. It is evident that he failed to mention that his great grandmother actually bought the Area (or the house on it)  and the Garden in 1968 and therefore his family owned the place. I would reasonably expect that this would be the first thing a person would say if he truly believed himself to be the owner.

40.  As such, I would think that, on balance, this story about the great grandmother was likely to be the 1^st defendant’s self-serving evidence for bolstering his adverse possession claim, probably fabricated at a later stage.

41.  It is also important to note that the 1^st defendant agreed that he had told Ms. Cheng that he would “consider the rent” on 14 May 2016. The 1^st defendant explained that he was trying to “accommodate” or “flatter” (“奉承”)  Ms. Cheng.

42.  This does not make sense: I cannot see how anyone who truly believes that he (and / or his family)  is the owner would say that or feel the need to “accommodate” or “flatter” a lawyer asking him to sign a tenancy agreement.

43.  Of course, if the 1^st defendant has all along flatly refused to pay rent, it would be hard to explain why Fu & Cheng would bother to seek instructions from the plaintiff regarding bank account for rental payment or bother to write the letter dated 19 May 2016 to him with bank account details (although the 1^st defendant denied receiving this letter).

44.  Was the 1^st defendant suggesting that Fu & Cheng would go to the extent of fabricating all these evidence as some sort of conspiracy?

45.  Fourthly, the 1^st defendant admitted, under cross-examination, that after disclosing his personal details, he voluntarily told Ms. Cheng that Mr. Yeung was a tenant paying rent and led them to Mr. Yeung’s house to knock on the door.

46.  If the 1^st defendant really was threatened and felt afraid, one wonders why he would then help Ms. Cheng further instead of simply shutting his door and calling the police?

47.  Fifthly, there is no dispute that the tenancy agreement signed by Mr. Yeung on 11 May 2016 was cancelled on 14 May 2016 (Trial Bundle B, page 195 – 196).

48.  If Ms. Cheng and others from Fu & Cheng were such bullies who resorted to threatening people, fabricating evidence and conspiring in order to gain an advantage for the client, why would Ms. Cheng cancel Mr. Yeung’s Tenancy Agreement immediately on request from Mr. Yeung’s son on 14 May 2016? Surely, one would expect that Ms. Cheng would simply refuse in order to bully Mr. Yeung as well?

49.  As a passing comment, I would put little weight on the evidence of Mr. Tsang Siu Yeung, the 1^st defendant’s second witness, who merely gave hearsay evidence from what he claimed was told by the 1^st defendant and his family. This is no more than adding another layer of self-serving evidence. What first hand evidence Mr. Tsang gave were unreliable observations as a neighbour.

50.  As such, I accept the plaintiff’s evidence over the 1^st defendant’s evidence regarding the dealing and conversation between the 1^st defendant and Ms Cheng and others in May 2016.

51.  I accept that the 1^st defendant did admit on 11 May 2016 that, inter alia, he was a tenant and that he was saying rent of HK$700 a month. On balance, I find that the 1^st defendant must have been paying HK$700 a month as rent all along. And perhaps when he realised the landlord had passed away and that the lawyers for the executor was actually asking him for evidence for the rental agreement, he sensed an opportunity to exploit the situation and decided to stall. The 1^st defendant claimed that he wanted to buy time to see what he could do, and I think he was at least truthful on that aspect. He then saw what he could do: to lay a claim on adverse possession.

52.  As such, I find that the 1^st defendant simply lacked the requisite intention to possess the Area nor the Garden even up to at least 11 May 2016.

Analysis of the evidence on exclusive and factual possession

53.  The expert’s evidence was not controversial: from the aerial photos, the Area was built upon by 1969 with fence-wall identified in 1973.  Cultivation in the Garden was first seen in 1978 with fence along the western boundary and along the southern boundary first seen in 1986.

54.  There is no evidence to suggest that the Garden was cultivated and fenced in in around 1966 as alleged by the 1^st defendant.

55.  As stated above, the 1^st defendant was inconsistent as to whether he had lived in the Area and Garden as the only abode since 1966 (save the period between 1992 and 2002).  Under cross-examination, he disclosed that he was married and had children in the mainland prior to 2001. At first, he claimed that he was married around 1980 and had two children shortly afterwards as a result of which he spent nights in the mainland whilst working in Hong Kong during the day for extended period until the children were 1 or 2 years old.

56.  Upon return to the witness box the next day, the 1^st defendant then volunteered to the court to change his evidence and pushed back the date of marriage to 1988. This date would conveniently be later than 1986 or 20 years from 1966, the date the 1^st defendant claimed he first lived in the Area, and exactly 20 years from 1968, the date that the 1^st defendant claimed that his great grandmother said she bought the place. It would also conveniently merge with his earlier evidence of the period that he fled Hong Kong in 1992. None of these were supported by any documents.

57.  I also note that there was an inconsistency in the 1^st defendant’s evidence of the number of occupants of the house in the Area.

58.  I accept that even if there is no compelling evidence that the 1^st defendant has continuously lived in the Area since 1966, it does not mean that the 1^st defendant, or his family, has not continually and factually possessed the Area in question. There are PCCW bill issued to the 1^st defendant’s mother dated 2011 and CLP electricity bill issued to his father dated 2017. However, none of the 1^st defendant’s family were called to give evidence.

59.  With regard to the Garden, there was dispute regarding whether there was ever complete fencing that surrounded the entire Garden, the condition of such fencing all along, and what action the 1^st defendant took, if any, after the plaintiff built a new fence surrounding the Garden in early 2017.

60.  At the end of the day, any discussion regarding factual possession of the Area and the Garden is not important given the court’s finding that the 1^st defendant lacked the intention to possess up to at least 11 May 2016.

Conclusion

61.  The court therefore dismisses the 1^st defendant’s claim for adverse possession for the Area and the Garden and also dismiss the counterclaim for damages regarding damages to the trees and wire netting of the Garden.

62.  Since the plaintiff has already recovered possession of the Garden, the court would only order that the 1^st and 2^nd defendants to deliver vacant possession of the Area back to the plaintiff.

63.  The court would also grant an injunction restraining the 1^st and / or 2^nd defendants from occupying, possessing, entering or otherwise using the Area and the Garden.

64.  The calculation for mense profit has been agreed between the parties and the court orders such to be paid for the period between 29 June 2016 to 28 June 2017 be HK$1,272 per month, for the period between 29 June 2017 to 28 June 2018 be HK$1,295 per month, and the period from 29 June 2018 to date of Judgment be HK$1,330 per month.

65.  Costs of this action be to the plaintiff with certificate for counsel.

66.  The 1^st defendant’s own costs to be taxed in accordance with the Legal Aid Regulations.