KWOK TAK SUN v. ETEK CO LTD

HCMP 756/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 756 OF 2003

____________

______________

J U D G M E N T

______________

1. This is an application brought by originating summons for a declaration that the plaintiff has acquired a possessary title to a parcel of land by adverse possession and a consequential declaration that the defendant's title thereto has been extinguished.

2. The plaintiff's evidence has not been challenged and I revert to that for the following history. At all material times the defendant, an incorporated company, has been the registered proprietor of a parcel of land known as section M of Hung Hom Inland Lot No. 235. A printout from the urban land register reveals that the defendant acquired its interest by assignment registered in November 1971. That interest is that of lessee of a Government lease stated to be for 75 years from 1 January 1901 renewable for a further 75 years. It is approximately oblong in shape running between buildings from Baker Street to Inslow Street.

3. The land the subject of this application is a small percentage of section M, fronting Baker Street. For the purpose of these proceedings the plaintiff engaged a surveyor who drew a plan that properly defines the land, a total of about 59 square meters. The plaintiff's account is that he assumed possession of the land in 1974 without leave, licence or other authority from the owner. From then on he utilised it for the purpose of running a business called 'Oceanic', supplying fish bait and accessories. His customers in the main comprised those fishing at the waterfront nearby. He built structures the better to operate his business and store his stock and to secure it when he was absent. He registered his business, and produced as evidence the registration certificate for 1977 in the name of Oceanic, at 60, Baker Street, Side Door, Hunghom, Kowloon.

4. For a few years he shared part of the land with a neighbour, called Man Kwai Hung. Mr Man ran an electroplating business next door, and used a part of the land for storage. When he closed down the business, in 1981, he vacated the premises. Thereafter and to date the plaintiff has been in sole possession. In 1989 the redevelopment of Hung Hom saw a decline in trade. Since then and to date the plaintiff has been running a flower stall called the Tak Hui Flower Shop. The change of business has not altered his ongoing use and occupation of the land in question to the exclusion of all others. Mr Man also filed an affidavit, confirming the plaintiff's use and occupation of the land from the early 70's. And the survey report exhibited official aerial photographs of Hung Hom going back to 1974 which depicted the structures the plaintiff said he built the better to operate his business.

5. The defendant having been served the proceedings and all documents filed in support and notice of the trial date has taken no steps. In particular there has been no evidence filed and there was no attendance at trial.

6. Given the evidence before me I am satisfied that at least since August 1981 the plaintiff has been in continuous possession of the land more specifically defined on the survey plan drawn for the purpose of identifying it and attached to the plaintiff's originating summons. His possession has been without leave or licence from the registered lessee thereof to the exclusion of all others including the lessee uninterrupted and without any action brought for recovery of it.

7. The law on adverse possession is governed by the Limitation Ordinance Cap. 347. The relevant section is at 7(2) which reads as follows:-

"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 ..."

8. But in this case the limitation period is in fact 20 years, by virtue of the plaintiff's rights accruing before July 1 1991.

9. On the face of it, my findings of fact warrant an order in terms applied for. But the issue that remains is that the defendant's lease, albeit subject to renewal, came to end on 31 December 1976. So how does this affect the plaintiff's rights?

10. The answer lies in sections 4 and 15 of the Government Leases Ordinance Cap. 40. I reproduce those in full:-

" RENEWAL OF GOVERNMENT LEASES

4. Renewal of Government leases which expired before commencement of Ordinance

(1) Where a renewable Government lease of a lot expired before the commencement of this Ordinance and the lot had not been divided into sections before the expiration of the lease, the right of renewal contained in the lease shall be deemed to have been exercised by the person or all the persons, if more than one, entitled to that right immediately before the expiration of the lease and there shall be deemed to have been granted to such person or persons on the day following the day on which the lease expired a new Government lease of the lot.

(2) Where a renewable Government lease of a lot expired before the commencement of this Ordinance and the lot had been divided into sections before the expiration of the lease, the right of renewal contained in the lease shall be deemed to have been exercised by the persons entitled to that right immediately before the expiration of the lease, and there shall be deemed to have been granted to such persons on the day following the day on which the lease expired separate new Government leases of the sections of the lot respectively held by them under the lease.

...

15. New Government leases subject to encumbrances and interests

Every new Government lease and the land thereby deemed to be demised shall be deemed to be subject to such of the following encumbrances and interests as the land and the renewable Government lease relating thereto were subject to immediately before the expiration of the renewable Government lease-

(a) any mortgage or charge, whether legal or equitable, and whether registered in the Land Registry or not;

(b) any public rights;

(c) any other right, easements, tenancies or other burdens of whatsoever kind or nature, except-

(i) in the case of a covenant, a contrary intention is expressed; and

(ii) in the case of any other right, easement, tenancy or burden created by an instrument, it is not expressed in that instrument to continue after the date of the expiration of the renewable Government lease.

11. Thus by section 4 the lease in existence was automatically renewed upon expiry and by section 15 any rights and interests were also preserved.

12. In the case Chung Ping Kwan & others v. Lam Island Development Limited [1996] WLR 448 the Privy Council expressly held that where a lease was renewed automatically by legislation the squatters' rights remained preserved.

13. The plaintiff in this case falls into the same category. The lease to the defendant has been automatically renewed but without disturbing the plaintiff's adverse interest. He has been in adverse possession for a continuous period of not less than 20 years. In the circumstances, he is entitled to the declarations he asks for including costs.

I order accordingly.