YU CHI CHUN AND OTHERS v. LEUNG ON

DCCJ 2321/2015

[2019] HKDC 104

IN THE DSTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2321 OF 2015

________________

___________________

JUDGMENT

___________________

1.  This action concerns the land known as Lot No. 759 in Demarcation District 29, Tai Po, New Territories, Hong Kong (“the Lot”) which was previously registered in the names of Yu Yui Pong, Yu Pong (the father of the 3^rd plaintiff) and Yu Shek Chuen. At present, the Lot is registered in the names of the 2^nd and 3^rd plaintiffs and the late Yu Cho Ching and Yu Shek Chuen. By a “Carry-on Order”, the 3^rd plaintiff was appointed to represented the estate of the latter two for the purpose of these proceedings.

2.  The defendant and his wife, Ng Mei Yuk (“Madam Ng”) currently occupied the Lot.

3.  The plaintiffs are seeking, inter alia, an order that the defendant to deliver vacant possession of the Lot but the defendant counterclaims for declaratory relief that he acquired possessory title over the Lot by reason of adverse possession.

The parties’ cases

4.  The plaintiffs’ case is that the Lot has been leased or licensed to the defendant since the beginning of the occupation around 1985 under an oral contract. The term of the contract was that the defendant would send some pots of mandarin oranges to Yu Bong’s store each year at the time of Chinese New Year as rent or license fee. When the 3^rd plaintiff inherited his share of the Lot in 1999, he entered into a formal yearly rent in which he collected money from the defendant around Chinese New Year. This has continued until the end of 2011 because the defendant refused to pay rent, but has continued to occupy the Lot.

5.  The defendant’s case is that he has occupied the Lot and other adjacent lots (including Lot 760 and 761) since around 1985 and has enclosed the Lot and Lot 761 with wire mesh and ran a farm on the land. All along, no one has asked them to leave, or to pay any rent until the 3^rd plaintiff came in 1999. However, the 3^rd plaintiff only identified the adjacent Lot 760 (which was used as assess road and not enclosed) to be his land. The defendant has paid some rent but discovered around 2012 that the real owner of Lot 760 was a Mr. Li, so he refused to pay further rent.

The experts’ evidence

6.  There is no substantial dispute between the experts. The aerial photographs first showed the fencing around the Lot in 1994. The aerial photograph of 1995 showed similar findings and the fence was also seen in 2000 although in other years, parts of the fence were obscured by dense trees. However, the position of the fence appeared consistent and the court can infer from the evidence that the Lot has been enclosed since around 1994.

The legal principles and the issues in question

7.  The legal principles are trite and needed not to be repeated in details here: the claimant needs to establish a factual possession and an intention to possess for the requisite period of time (which is not disputed and is 20 years in this case.).

Factual possession

8.  The court is satisfied that the Lot has been fenced off since around 1994.

9.  The defendant has used various correspondence addresses and much time has been spent in cross-examination on such. I need not go into details here suffice to say that I am satisfied that the defendant and his wife has been residing on the Lot and various surrounding areas since 1985.

10.  I am therefore satisfied that factual possession has been established since 1994.

Intention to possess

11.  The crux of this case concerns this issue: in particular, whether the Lot has been identified and whether there was a lease or licence. There is substantial factual dispute between the parties.

Around 1984-1985 (when the defendant first occupied the Lot) to 1999

12.  The 3^rd plaintiff’s evidence was that he heard from his father, Yu Bong, that around this time, Yu Bong found that there were a lot of mandarin orange plants on the Lot and confronted the defendant with a survey map (which Yu Bong had obtained at the time).

13.  Thus, an “oral agreement” was made that the defendant would give mandarin oranges to Yu Bong as yearly rent or licence fee. The defendant would send two pots of mandarin oranges to Yu Bong’s store in the village around Chinese New Year and this has continued until Yu Bong died in 1998. (Paragraphs 6 and 7 of 3rd plaintiff’s witness statement on page 2 of Trial Bundle 2, and paragraphs 6 to 8 of 3rd plaintiff’s supplemental witness statement on pages 30 and 31 of Trial Bundle 2)

14.  The defendant agreed that he first occupied and cultivated the Lot around this time but no one confronted him to leave the Lot. No one requested him or Madam Ng to pay any rent and, further, no one had contacted or communicated with him or Madam Ng discussing the title or use of the Lot. The defendant never knew who owned the Lot and he had intended to possess the Lot since the beginning. (Paragraphs 14 and 15 of the defendant’s witness statement on page 14 of Trial Bundle 2).

15.  I would think the scenario of Yu Bong walking up to confront the defendant with a survey map was quite unlikely given neither he nor the defendant was a trained surveyor nor someone familiar with handling such matters. Further, this scenario was advanced by the 3^rd plaintiff only in his supplemental witness statement made in July 2017 and one wonders that such important matter, if true, would have been mentioned in the 3^rd plaintiff’s first witness statement prepared some 16 months earlier. In any case, this is, at best, hearsay evidence and even if it did happen, the court would accept the evidence from expert surveyor Mr. Joseph Wong that a person without training as a surveyor would have great difficulty identifying the Lot from the survey map alone, especially when San Liu Road was not even built at the time.

16.  I would therefore find that Yu Bong would not have identified the Lot to the defendant at the time.

17.  Nevertheless, I do not think this is fatal to the plaintiffs’ case.

18.  Madam Ng admitted in court of the practice to send mandarin oranges every year to “more than 10” villagers in order to forge “good relations”.

19.  Upon further questioning, Madam Ng made the following admissions:-

i)  Many villagers had claimed that she and the defendant were using their land;

ii)  This was because when they had the farm they were occupying a lot of land, not just the land belonging to the “Yu” family;

iii)  The villagers who made such claims had not asked for “rent” in cash but she and the defendant had to send mandarin oranges every year to them for establishing “good relations”;

iv)  Some of the “yearly mandarin oranges” they sent to villagers were because of such claims;

v)  They have sent mandarin oranges to Yu Bong’s store in the village;

vi)  It was “possible” that Yu Bong also made the claim that they were occupying his land so that was the reason why they sent the mandarin oranges every year to his store;

vii)  However, neither Yu Bong, she nor the defendant was aware which piece of land and which lot number that was occupied; and

viii)  She knew that she was occupying other people’s land right from the beginning.

20.  I would put more weight on such evidence in view that these was not “self-serving” evidence but evidence which, in many ways, would be against the self-interest of the defendant and corroborated with the 3rd plaintiff’s case on the existence of this “oral agreement” (Wong Tak Yue v Kung Kwok Wai [1998] 1 HKLRD 241).

21.  Further, the fact that the defendant was sending “yearly mandarin oranges” to so many villagers simply because they claimed that the defendant was occupying their land must also mean that the defendant did not know exactly which pieces of land belonged to whom except that they know they had to send the mandarin oranges to maintain good relations to those “claimants”.

22.  However, even if each piece of the occupied land and their respective owners were not individually identified, such practice of sending “yearly mandarin oranges” must be evidence that the defendant acknowledged that at least some of these “claimants” were owners of the land he was occupying and he was paying a form of “rent” or “licence fee”.

23.  So, despite the fact that the Lot was not identified, I accept that there was such an “oral agreement” between Yu Bong (and perhaps other villagers) and the defendant (and Madam Ng). The defendant could not have an intention to possess these occupied lands as long as this practice was maintained.

24.  According to the 3^rd plaintiff, such practice continued until the death of Yu Bong in 1998, but Madam Ng said that the practice stopped at around 1995 or 1996 when the farm stopped dealing with mandarin oranges. The date was not important in this case given what happened in 1999.

The meeting in 1999

25.  There was no dispute that the 3^rd plaintiff went up to meet with the defendant and his wife in 1999. The circumstances of this meeting, however, was much in dispute.

26.  The 3^rd plaintiff was at pains to submit to court that he had pointed out the location of the Lot to the defendant and Madam Ng. He claimed that when he saw that the Lot was fenced in 1999, he had asked the defendant, “Why did you surround my land?”

27.  However, upon questioning, the 3^rd plaintiff admitted that he already noticed the fence way before 1999 when he routinely rode his bike there. When asked further, he claimed that his father Yu Bong, told him that the defendant had said that there were wild boars and asked for permission to surround the Lot by fencing, which Yu Bong granted.

28.  Of course, if this was true, there would be a question as to why he still asked the defendant about the fencing in 1999. The 3^rd plaintiff’s answer was that he thought that there were no wild boars by then.

29.  This explanation was clearly absurd and, of course, none of such evidence concerning fencing of the Lot was raised by the 3^rd plaintiff before. The court finds that the 3^rd plaintiff has never questioned the defendant about the fencing around the Lot.

30.  In fact, it was quite clear that, at the relevant time, the 3rd plaintiff had no idea which part of the land occupied by the defendant that his land was located: the 3^rd plaintiff has produced the stub of a rental receipt dated 20 April 2008 which he purported to be the receipt from the defendant’s rent of the Lot for the year 2008 (page 16-1 of Trial bundle 3).

31.  On this stub, the name of the defendant, date, rental period, rent paid (HK$200) and the words “田租” (“farm rental”) were written. However, two addresses appeared on the receipt: “712” and “759”. It is not in dispute that the 3^rd plaintiff owned both Lot 759 and 712.

32.  Crucially, whilst the word “712” was written in black ink along with the rest of the receipt, the word “759” was written in blue ink.

33.  The 3^rd plaintiff admitted that the word “759” was added by himself in around 2012 when the defendant refused to pay rent.

34.  There have been some attempts from the defendant to suggest that this stub was for receipt of rental for another piece of land, that is, Lot 712. However, there was no evidence that the defendant has ever occupied Lot 712 which was located some distance away from the defendant’s farm.

35.  The logical conclusion must be that, at the time the 3^rd plaintiff wrote the stub (on or around 20 April 2008), he had written the wrong lot number by mistake when he was simply referring to whichever piece of his land that the defendant was occupying.

36.  Further, the fact that the 3^rd plaintiff had mistaken the lot number meant that, at least up to 20 April 2008 (and likely beyond that until the rental dispute in around 2011 or 2012), he could not have read the survey map properly (if at all) which also meant that he would not likely have any precise idea where his land was located, where the boundaries were, except that he knew that it was occupied by the defendant.

37.  On the other hand, both the defendant and Madam Ng were at pains to point out that, at the 1999 meeting, the 3^rd plaintiff was pointing at the access road next to Lot 759 (which we now know as Lot 760) and claimed that this was his land.

38.  I have serious doubt about the memories of the defendant and Madam Ng on this meeting given that even the evidence between them did not appear to agree: the numbers of meetings at the time, whether Madam Ng was alone or with the defendant, what exactly was said, whether money was paid etc.

39.  Madam Ng was initially adamant that all the 3^rd plaintiff did was to point to the ground of the access road and said, “This is my land” and left without saying anything more.

40.  Given such an unlikely and illogical scenario, she was asked as to why she would pay rent to someone who simply appeared and made a claim in this way. In reply, Madam Ng admitted that when he returned a few times riding past their place (but only irregularly and occasionally, and never stopped to talk), she realised that the person was Yu Bong's son.

41.  But how did she “realise” that? She answered that she asked the villagers who often walked past their place.

42.  But how did she described the 3^rd plaintiff (who she only occasionally saw but only talked to once) to the villagers? In reply, Madam Ng changed her evidence in that the 3^rd plaintiff did tell her that he was the son of Yu Bong in that meeting in 1999.

43.  Madam Ng also repeatedly said that she did not pay rent in 1999 and only paid money 3 times over the years, and when she did, it was for “tea money” for the 3^rd plaintiff’s mother when she found out that the 3^rd plaintiff was Yu Bong’s son.

44.  This version of events was completely different from the defendant’s evidence: the defendant said that the 3^rd plaintiff never mentioned that he was the son of Yu Bong, but that the 3^rd plaintiff came regularly every year since 1999 to collect money (which he assumed to be) for the access road (or Lot 760).

45.  There were numerous inconsistencies in Madam Ng’s evidence and also between hers and the evidence of the defendant. I need not go into all the details here. But whenever these were pointed out to her, Madam Ng explained that she was old and her memory was vague. One would therefore question that if she remembered so little about the circumstances of the 1999 meeting, why would she “selectively” remember so well about the 3^rd plaintiff pointing to the access road and claiming that it was his land?

46.  Given that I found that the 3^rd plaintiff had no precise idea where his land was up until at least 2008, it would be highly unlikely that he would be identifying any plot of land to the defendant in 1999. If the 3^rd plaintiff was made any pointing gesture at all (which I doubt), he would not have been showing the defendant and his wife the exact boundaries of his land.

47.  Further, in his witness statement, the defendant seemed to be suggesting that he agreed to rent Lot 760 from the 3^rd plaintiff in 1999 so that he could expand his business into that area at that time (paragraph 13 on page 13 of Trial Bundle 2). However, the defendant gave evidence in court that he has been using Lot 760 as access road since 1985 or 1986. Thus, the court would not accept that the defendant had any misconception (as it turned out) that the 3rd plaintiff saw his business expansion and asked for rent for the area it was expanding to (that is Lot 760).

48.  The crucial question was why the defendant and Madam Ng handed over money to a stranger if all he did was to appear yearly (or occasionally, as the case may be) on their land asking for rent (or “tea money”). The defendant and Madam Ng again gave different answers.

49.  The defendant said that he initially assumed he was a “local gangster” and that the money was very little so he did not want to cause trouble. The defendant admitted in court that the 3^rd plaintiff came back every year to seek rent. And when he came back every year, the defendant came to believe that he was the owner (of the assess road/Lot 760 only) so the defendant kept on paying rent.

50.  On the other hand, Madam Ng told the court that, only much later, around 2011, when the 3^rd plaintiff came and asked for HK$100 as “tea money” for his old mother and that she realised that the 3^rd plaintiff was the son of Yu Bong, that she paid, and that she only ever paid 3 times. These are all new evidence which she has never stated in her witness statement.

51.  I am not convinced by such explanations which are not only inconsistent but clearly self-serving.

52.  However, it was crucial that Madam Ng admitted that she knew, at some point, that the 3^rd plaintiff was the son of Yu Bong and that was when she decided to pay.

53.  I would again put weight on this evidence because this was not self-serving and was actually against the defendant’s self-interest (as per the Wong Tak Yue case): the argument must be that if there has never been any “oral agreement” with Yu Bong, and if the defendant and Madam Ng never knew, as they claimed, that they were occupying the land of Yu Bong, why would they see any significance as to the 3^rd plaintiff being Yu Bong’s son?

54.  The fact that Madam Ng readily paid the 3^rd plaintiff when she knew he was the son of Yu Bong must necessarily confirm that she and the defendant were aware that they were occupying land that belonged to Yu Bong (and now passed to the 3^rd plaintiff), and that there was such an “oral agreement” before but now the 3^rd plaintiff was asking for money as rent instead of mandarin oranges.

55.  This would therefore support the plaintiffs’ case.

56.  Further, the 3^rd plaintiff has produced the receipts of 2010 and 2011 for farm rent (pages 15 and 16 of Trial Bundle 3). The Chinese words for “farm rent” was clearly stated on them. These were his own copies. The copies produced by the defendant did not contain any reference to “DD29” and Lot “759”. The 3^rd plaintiff might well have added these reference later, but there was no dispute as to the authenticity of the receipts: Madam Ng agreed that she had signed them. As for the stubs for the rental receipts, besides the 2008 stub already mentioned above, the 3^rd plaintiff has also produced the stubs for 2009, 2010 and 2011.

57.  I would therefore accept that the 3^rd plaintiff had been returning to collect rent from the defendant and his wife every year since 1999 until the rental dispute in around 2011 or 2012.

58.  As such, despite the fact that I found unconvincing and self-serving evidence from all sides, on my analysis as above, I found that the defendant has indeed been paying rent in one form or another as described above and this showed that he did not have the intention to possess the Lot to the exclusion of the owner. The fact that neither party appeared to know precisely the boundaries of the Lot at the relevant time was not important in this case.

59.  As such, it would logically follow that the defendant and Madam Ng must have been under the impression that the 3^rd plaintiff owned much of the land around there so they were surprised when a Mr Li turned up in around 2011 at Lot 760 with construction workers and converting it into a car park. It was only when they complained to the 3^rd plaintiff that the boundaries of the Lot and Lot 760 were identified.

60.  Further, if the defendant and Madam Ng had all along honestly believed that the 3^rd plaintiff was only claiming to be the owner of Lot 760 and that they were only renting this from him, one would expect that they would be very angry since the 3^rd plaintiff had clearly been “scamming” them. The fact that they did not take any steps to confront the 3^rd plaintiff to recover past rents must be further evidence to support that the 3^rd plaintiff never identified Lot 760 as his land for renting all along.

61.  Therefore, this is a case where the squatter has factual possession by way of physical enclosure, but his conduct showed that he acknowledged the title of the paper owner by payment of gifts and rents. (Wu Yee Pak v Un Fong Leung HCMP 3773/1998)

62.  As such, the defendant had clearly failed to “make it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can”, and therefore he did not have the requisite animus possidendi (Powell v McFarlane ChD 1977).

Conclusion

63.  I would therefore enter judgment in favour of the plaintiff and dismiss the defendant’s counterclaim.

64.  I would make the following orders:

(a) the defendant do deliver vacant possession of the Lot within 28 days, failing which the plaintiffs shall be at liberty to demolish and remove all buildings, structures / and /or items occupying the Lot at the defendant’s costs;

(b) the defendant do pay the plaintiffs mense profits in the sum of HK$200 per year from 1st January 2012 until vacant possession together with interest until payment; and

(c) costs of this action be to the plaintiffs to be taxed if not agreed with certificate for counsel and the defendant’s own costs to be taxed in accordance with the legal aid regulations.