YEUNG KAM HEUNG v. YU YI SHEK

DCCJ 2595/2019

[2023] HKDC 464

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2595 OF 2019

(TRANSFER FROM HCA No. 2178 OF 2011)

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DECISION

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Introduction

1.  This is the Plaintiff’s application by way of Summons dated 12 December 2022 (“Present Summons”) for default judgment for declaratory relief based on a claim in adverse possession against the Defendant, the paper owner of Lot no. 197 in D.D, 98, Yuen Long, New Territories as registered at the Land Registry.

2.  The precise area of the land concerned (“the Property”) is indicated in pink in the plan annexed to the Amended Writ of Summons endorsed with Amended Statement of Claim in this action.

3.  The Defendant is, and was at all material times, the registered owner of the Property according to the title documents registered with the Land Registry.

Procedural History

4.  The Plaintiff issued the Writ of Summons endorsed with the Statement of Claim under action no. HCA2178/2011 in the High Court.

5.  All attempts to serve the Writ and the relevant documents on the Defendant at his last known address as well as to locate him met with no success. The search of record of death with the Births and Deaths Registry in the name of the Defendant was proven to be futile.

6.  Leave was accordingly granted for substituted service of the Writ by advertising in a newspaper and affixing a copy of the Writ to some conspicuous part of the Property.

7.  By Order dated 9 July 2019, the action was transferred to the District Court and became the present action. Pursuant to Order dated 26 March 2021, leave was granted to the Plaintiff to amend the Writ and the Statement of Claim and to serve the same together with the relevant documents on the Defendant by way of substituted service. There has been no filing of notice of intention to defend or defence by the Defendant. The Plaintiff then issued the Present Summons for default judgment against the Defendant.

Plaintiff’s Case

8.  It is the Plaintiff’s pleaded case that on or about 20 August 1978, the Plaintiff purchased from a person known to her as 陳瑞真 (“Chan”) an old farm (“Subject Farm”) and trading goods in the sum of HK$60,000 (“the Purchase”). The Subject Farm included the Property together with other pieces of land adjacent to the Property (“Adjacent Land”).

9.  At the time of the Purchase, the Plaintiff:-

(a)  did not make any enquiry as to the true owner of the Property or the Adjacent Land;

(b)  was unaware that the Defendant was the registered owner of the Property; and

(c)  believed that Chan had the right to sell to her the Property and the Adjacent Land.

10.  Soon after the Purchase, the Plaintiff had the use and occupation of the neighbouring land (“Leased Land”) of the Subject Farm, which were leased from their rightful land owners for her use in the name of her mother-in-law on or about 15 August 1979.

11.  The Plaintiff had since the Purchase been in possession of the Property in the belief that she was the sole owner of it. Throughout the decades, she occupied and used the Property, the Adjacent Land and the Leased Land for her farming business. She had erected fences on with a gate outside the Property ever since her possession of the Property and had kept the fences under repair to exclude all others from the Property. She had raised chickens and pigs on the Property.

12.  A small hut was first built on the Property which extended to the Adjacent Land in about 1979. Three years later, a rectangular structure (“Rectangular Structure”) extended from the small hut running the full length of the east of the Property and taking up about two-fifths of the Property was erected.

13.  The Rectangular Structure was furnished with furniture and served as day time and/or alternative residence for the Plaintiff and her family. The other third-fifths of the Property was kept as an open court for drying clothes, storage of miscellaneous items. It also served as playground for the Plaintiff’s children.

14.  The Plaintiff had after her possession of the Property in 1978 managed to connect the Property to water supply and electricity supply. She also paid the utilities bills as well as the government rates and rents.

15.  In or about 1984, the Squatter Control Unit inspected and considered the Rectangular Structure as an illegal structure. Subsequently, the Squatter Control Unit removed most of the roof and walls of the Rectangular Structure.

16.  In the course of the inspection, it was disclosed to the Plaintiff for the first time that the registered owner of the Property was the Defendant. Notwithstanding that, the Plaintiff had never seen or made contact with the Defendant. Nor had she ever paid rent to him.

17.  After demolition, the Plaintiff still kept chicken in the remains of the Rectangular Structure and used the Property as usual notwithstanding her knowledge about the Defendant. Five years later, she rebuilt the entire Rectangular Structure without the consent of the Defendant or the Squatter Control Unit. She continued to possess and occupy the Property in the same manner as she had done before.

Legal Principles : Default Judgment and Declaratory Relief

18.  In the present case, I am satisfied that proper service of legal documents in these proceedings have been effected on the Defendant. Neither acknowledgement of service nor defence has been filed. Hence, the default judgment procedure under Order 19 rule 7 of the Rules of the District Court is available to the Plaintiff.

19.  In default judgment application, the court looks to the pleaded facts alone and no other evidence will be permitted. Judgment will be given on the Plaintiff’s claim provided that the pleaded facts give rise to the relief sought : Lam Chi Fat v Liberty International Insurance [2002] 3 HKLRD 480, §§26-27, per Ma J (as he then was).

20.  As regards the Plaintiff’s claim for declaratory reliefs in default judgment application, it is well-settled that the normal practice to grant a declaration without a trial is only a rule of practice and not a rule of law, and such practice will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled. Declaratory relief will be granted where the plaintiff has a genuine need for it and where full justice would not be done if such relief is denied. The declaratory relief to be granted should not be in terms wider than what the plaintiff is entitled to and what is necessary to do justice to him : §19/7/20 Hong Kong Civil Procedure 2023 vol 1.

Legal Principles : Adverse Possession

21.  Sections 7(2) of the Limitation Ordinance stipulates that no action shall be brought by any person to recover land after the expiration of 12 years from the date on which the right of action first accrued to him.

The right of action accrues on the date of dispossession and when such dispossession is adverse.

22.  Section 8(1) provides that where the person bringing an action to recover land, or some person through whom he claims, has been in possession thereof, and has while entitled thereto been dispossessed or discontinued his possession, the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.

23.  Section 13(1) provides that 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.

24.  Section 17 provides that, subject to the provisions in case of land held on trust under section 10, the title of that person to the land shall be extinguished at the expiration of the period prescribed by the ordinance for any person to bring an action to recover land.

25.  For possession prior to 1 July 1991, the effective date of the amendment of the Limitation Ordinance in 1991, the limitation period is 20 years pursuant to s.38A of ordinance.

26.  The legal principles applicable to adverse possession are well settled which have been summarized by the Court of Appeal in Tsang Foo Keung v Chu Jim Mi Jimmy [2017] 3 HKC 527 as follows :

(a)  To establish possessory title based on adverse possession, the claimant must be shown to have both factual possession of the suit land and the requisite intention to possess (animus possidendi) for the whole of the period as required under the Limitation Ordinance.

(b)  the requisite factual possession is a sufficient degree of exclusive physical control, which depends on the circumstances of the case and, in particular, the nature of the land and the manner in which land of that nature is commonly enjoyed. What must be shown is that the alleged possessor has been dealing with the land as an occupying owner might expect to deal with it. It must be a single and conclusive possession.

(c)  the requisite intention is to exclude the world at large, including the true owner, from the land so far as is reasonably practicable and so far as the law allows.

(d)  The person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention by compelling evidence. It cannot be lightly assumed that the paper title holder has foregone his interest in land.

(e)  Evidence of subjective intent should be approached with caution. Intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use.

27.  The act of enclosure was considered to be unequivocal demonstration of the occupier’s intention to possess the land : Buckinghamshire County Council v Moran [1990] Ch 623.

28.  The occupier mistakenly believes that he has good title may still validly establish a claim of adverse possession even though he acted in the honest but mistaken belief that the subject property was in fact his : Topwell Corp Ltd v Kwan Kam Kee [2014] 5 HKLRD 1; Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464).

Discussion

29.  Applying the legal principles aforesaid, I am satisfied that, on the facts as pleaded in the Amended Statement of claim, the Plaintiff had been in continuous and uninterrupted exclusive possession of the Property with the requisite intention to adversely possess it since around 1978 when she purchased the Property from Chan and started to occupy it in the manner and in the belief that she was the real owner of it.

30.  The Plaintiff enclosed the Property together with the Adjacent Land and the Leased Land by a fence and a gate, effectively excluding others, including the Defendant, from the Property. She also built a small hut and subsequently, a rectangular extension, on the Property. She caused to have electricity and water supplied to the Property. She had been paying government rates and rents for it. She lived there with her family and kept livestock on it.

31.  I am satisfied that the pleaded case has established the Plaintiff’s possessory title based on adverse possession. The pleaded facts have satisfied the requirements of the Plaintiff having both factual possession of the Property and the requisite intention to possess it for no less than 20 years as required under the Limitation Ordinance. The cause of action had accrued to the Defendant since August 1978. There was no evidence of any claim to the title of the Property.

32.  Given a clear case of adverse possession is made out, the Defendant’s title to and interest in the Property has therefore been extinguished. The Plaintiff has established possessory title over the Property against the Defendant, the paper owner. The balance of justice weighs towards departing from the rule of practice to not grant declaratory reliefs.

33.  At the hearing, Ms Chong, Counsel for the Plaintiff, sensibly confirmed that other than the declaratory relief which I will set out in paragraph 37 below, the other reliefs sought in the prayer in the Amended Statement of Claim would not be further pursued with.

34.  This is a sensible concession. Suffice it to say that the common law does not provide a squatter with a right to succeed to or take over the title of the paper owner whom she has dispossessed. Nor does the Limitation Ordinance operate as a statutory conveyance of that title to the squatter.

35.  Hence, the Plaintiff only acquired a possessory title through adverse possession which does not entitle her to be registered as owner in substitution of the paper owner. This is particularly so since the Hong Kong land registration system is based upon the registration of instruments, and not that of title : Wong King Lim v The Incorporated Owners of Peony House [2013] 4 HKC 295 at §§33.2 and 37.

Conclusion

36.  Having considered the submissions for the Plaintiff and all the documents before me, I find the Plaintiff had established factual possession over the Property with requisite intention to adversely possess the Property for not less than 20 years before the commencement of the present proceedings. I am persuaded that she had established possessory title over the Property against the registered owner.

Order

37.  In the circumstances, I make an order that : -

(1)  a declaration that the Defendant’s title, rights and interest of and in Lot no. 197 in D.D, 98, Yuen Long, New Territories to the extent such lot is indicated in pink in the plan annexed to the Amended Writ of Summons in this action as Annexure A have been extinguished by virtue of section 17 of the Limitation Ordinance (Cap.347);

(2)  a declaration that the Plaintiff has been in adverse possession of the Property for a period of no less than 20 years prior to the commencement of the present proceedings, and has thereby acquired and is entitled to an indefeasible possessory title, interest and/or rights in and of the Property; and

(3)  there be no order as to costs of the present proceedings and of this application.

38.  I thank Counsel for her assistance.