黄景廉 v. 牡丹大厦業主立案法團

DCCJ 2313/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2313 OF 2009

____________

J U D G M E N T

1.  The dispute concerns a scavenging lane (“the Lane”) situated between Peony House (North Block) at Nos.2-6 of Ka Shin Street and No.8 of that street in Tai Kok Tsui, Kowloon. The Lane was at all material times part of the common part of Peony House. The Plaintiff (“Wong”) claims property right over the Lane by reason of adverse possession. The Defendant, which is the Incorporated Owners of Peony House (“IO”), resists the claim and puts forward a counterclaim for, among other things, possession.

The Lane

2.  Peony House (North Block) (“the Building”) was surrounded by Tai Kok Tsui Road to the east, Ka Shin Street to the south and Fuk Chak Street to the north.  The west side of the Building is now an open yard  (“the Open Yard”) fenced by a wall running along the entire width of the Building between Ka Shin Street at one end and Fuk Chak Street at the other end.  The Lane is sandwiched between the other side of the wall and No.8 Ka Shin Street.  It is identified and coloured red in the Block Plan annexed to Wong’s pleading [1].

3.  At the moment, the side of the Open Yard facing Ka Shin Street is occupied by a restaurant business while the other side facing Fuk Chak Street is closed by a stainless steel door with lock.  There is no dispute that the door was erected by the IO.

4.  The whole width of the Lane at the Ka Shin Street end (slightly less than 5 feet) is currently occupied by Wong to operate his business of plumbing, electric and decoration work as well as door key prescription.  The upper storey of the shop is roughly constructed by corrugated iron, frames, boards and tarpaulin. The 2-storey structure extends into the Lane by about 40 feet where the back of the shop is now sealed, though not air-tight, by a steel board.  There is also no dispute that the board was erected by the IO.

5.  The rest of the Lane is now in the open air with a stainless steel door with a lock at the end of the Lane facing Fuk Chak Street.  The door was erected at about the same time as the steel board sealing the back of the shop by the IO.

6.  Therefore the Lane is now effectively divided into the shop front portion (“Front Portion”) and the rear portion (“Rear Portion”).

7.  In the Rear Portion, there are now the following features:  There are 3 door openings with the remains of wooden and stainless steel doors on the side of the wall in the Lane.  The corresponding openings on the other side of the wall in the Open Yard have by now been sealed by concrete.  There are also 2 manholes with cast iron covers on the ground of the Lane.

8.  The current layout and features of the Lane and its vicinity are respectively indicated in the agreed plan [2], which was prepared after the site visit by this court and the parties on the first day of the trial.

The dispute

9.  In 2008, the IO commenced proceedings in the Lands Tribunal against Wong (LDBM 219/2008).  The parties then agreed to stay the proceedings pending the determination of the rights over the Lane by the court and hence the present action was commenced in the following year.

10.  The parties used to act in person.  Since they became legally represented, the original homemade pleadings have been amended.

11.  Essentially Wong claims that he first entered into possession of the Lane in 1987-1988 when the 2-storey structure erected at the Front Portion already existed.  He carried out various works to the structure and the rest of the Lane, including installing an iron door at his shop front facing Ka Shin Street as well as an iron gate at the end of the Rear Portion facing Fuk Chai Street.

12.  Wong says since 1988, he has been operating his business at the shop occupying the Front Portion and used the Rear Portion for storage.  In 2008, the IO gained entry into the Rear Portion, removed the structure and properties put there by Wong, and replaced his iron gate at the end facing Fuk Chak Street by the current stainless steel door.  Wong has since been kept out of the Rear Portion.

13.  Wong claims declaratory relief as regards his right over the Lane by reason of adverse possession.  He also claims damages for the loss of properties that were removed from the Rear Portion by the IO in 2008.

14.  The IO denies that Wong has been in occupation of the Lane since 1987-1988.  Instead numerous other persons also occupied the Lane during the same period of time.  The IO denies liability for the alleged removal of Wong’s properties from the Rear Portion.  In 2009, the IO received a notice from the Buildings Department (“BD”) to demolish the structure occupied by Wong.  Despite requests, Wong refused to comply.

15.  The IO puts forward a counterclaim against Wong for possession of the Lane together with injunction to remove the structure from the Front Portion; and to restrain him from occupying the Lane.  The IO also claims against Wong for rent or mesne profit and damages for the alleged trespass of the Lane.  As pleaded, the counterclaim is brought on the basis of section 34I of the Building Management Ordinance, Cap.344 (“BMO”)

Limitation Ordinance, Cap.347 (“LO”)

16.  The starting point is the LO.  Amongst others, the following current provisions are relevant:

Section 7(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.”

Section 8(1):

“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.”

Section 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.”

17.  Mr Yin for Wong accepted that the applicable period of adverse possession is 20 years in the present case, referring to Yu Siu Cheuk v Realray Investment Ltd, CACV 181/2009 (10 November 2009).

The issue

18.  The crux of the matter is whether Wong has been in adverse possession of the Lane for not less than 20 years as a matter of fact with the requisite intention by the time when the IO sought to recover possession.

19.  There is no dispute that as at the date of commencement of legal proceedings, and even today, Wong was and still is in possession of the Front Portion that houses his shop.

20.  As to the Rear Portion, possession was effectively recovered by the IO by conduct, namely, by entering the Rear Portion, removing the structures and articles, sealing up of the back of the shop and, more symbolically, erecting the current stainless steel door with lock.  Though the exact timing is in dispute, this happened before the commencement of legal proceedings.

21.  Hence the starting point of counting 20 years backward for the purpose of ascertaining the alleged adverse possession slightly differs in the case of the Front Portion and the Rear Portion.

The principles

22.  A person claiming to be in adverse possession must be shown to have both factual possession and the requisite intention to possess (animus possidendi): see Wong Tak Yue v Kung Kwok Wai & Anor (No.2) (1997-98) 1 HKCFAR 55, approving the principles enunciated by Slade J in Powell v McFarlane (1979) 38 P & CR 452 and adopted in R v Sceretary of State for the Environment ex p Davis (1990) 61 P & CR 487 and Buckinghamshire County Council v Moran [1990] Ch 623.

23.  The intention to possess involves the intention in one’s own name and on one’s own behalf to exclude the world at large, including the paper owner, as far as is reasonably practicable and so far as the process of law will allow.  The question of intention to possess is one of facts.

24.  The principles were subsequently approved by the English House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419.  In particular, Lord Browne-Wilkinson said:

“36. …… The question is simply whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner.

……

38. …… there will be a “dispossession” of the paper owner in any case where (there being no discontinuance of possession by the paper owner) a squatter assumes possession in the ordinary sense of the word. Except in the case of joint possessors, possession is single and exclusive. Therefore if the squatter is in possession the paper owner cannot be. If the paper owner was at one stage in possession of the land but the squatter’s subsequent occupation of it in law constitute possession the squatter must have “dispossessed” the true owner for the purposes of Schedule 1, paragraph 1 [i.e., section 13(1) of Cap.347 in the Hong Kong context]……

……

42. …… Once it is accepted that in the Limitation Acts, the word “possession” has its ordinary (being the same as in the law of trespass or conversion) it is clear that, at any given moment, the only relevant question is whether the person in factual possession also has an intention to possess: if a stranger enters on to land occupied by a squatter, the entry is a trespass against the possession of the squatter whether or not the squatter has any long term intention to acquire a title.”

25.  The Court of Final Appeal confirmed the above principles in the subsequent case of The Incorporated Owners of San Po Kong Mansion v Shine Empire Limited (2007) 10 HKCFAR 588 (at §7).

26.  In the recent case of Yu Kit Chiu & Ors v Chan Shek Woo, unrep., CACV 137/2010, the Court of Appeal summarised the above principles (at §§15-22).  The apparently different approaches of the English House of Lords and the Hong Kong Court of Final Appeal towards the significance of the squatter’s indication of willingness to pay rent (§23) did not arise for determination in Yu Kit Chiu.  Nor in the present case.

The evidence

Wong’s case

27.  According to Wong, by the time when he came to occupy the Lane, the 2-storey structure at the Front Portion was already there; but he found it deserted.  He started to repair the same for his own use.  He had the ground of the entire length of the Lane raised by concrete.  The photographs produced show that the ground had indeed been raised by layer of concrete above the pavement level.  The observation was verified during the site visit.  As mentioned, Wong also had the metal door erected at the shop front facing Ka Shin Street and the metal gate erected at the Fuk Chak Street end of the Lane.

28.  Wong added that he also discovered a working telephone and received telephone bills that were addressed to a Madam Huen To, including a final notice to settle telephone charges in arrears.  For convenience, he started to use the telephone until he changed the registration into his own name in the following year.  He does not know Madam Huen To.  Nor has he ever seen her.

29.  Wong also explained his understanding that the adjacent No.8 Ka Shin Street used to be split into 2 shop premises, namely, 8A and 8B, and thus resulting in 2 individual electricity meters.  By the time he came to occupy the Lane, No.8 had already been occupied by a single tenant so that the meter for No.8B, then registered in the name of one Au Koon Wah, became surplus.  Wong started to use that surplus meter and subsequently changed the registration into his own name.  He does not know Au Koon Wah.  Nor has he ever seen him.

30.  Copies of various types of documents were produced, including personal mails, business registration certificate and documents from the Government as well as public utility companies.  They show that Ground Floor, No.8 Ka Shin Street (or sometimes Side Door or Side Shop or Side Lane thereof) was reported to be Wong’s address.  The earliest one in time that was addressed to Wong was dated January 1988.

31.  During the site visit, one should also be fairly impressed that the condition and contents of the 2-storey structure that houses the shop evidence many years of occupation.  An example was that beneath the advertisement banner on top of the shop front, the older signboard of the shop was found.  It advertised the same business of Wong’s and the long expired 6-digit business telephone number.

32.  Wong called numerous witnesses.

33.  Lo Sheung Wa was the casual worker Wong engaged then to carry out the ground raising work mentioned above.

34.  Chan Kin Leung was the worker then engaged by Wong to erect the metal door at the shop front and the metal gate at the Fuk Chak Street end.

35.  Lin Sai Kau is an old friend of Wong’s for over a quarter of a century.  He testified about his visits to Wong’s shop since its opening in 1988.  He distinctly remembered his visit to his shop before the 4 June incident in 1989.

36.  Hui Kin Hing used to live on the roof of No.18A of Ka Shin Street.  He testified that in about 1988-1989, he contracted Wong to install water pipes and to apply for water meter there at the fee of HK$5,000.

37.  As neighbours, Hui Kin Hung and Tang Kin had been passing by Wong’s shop regularly.

38.  Tsui Lai Hing has been a resident at the vicinity since 1986.  She testified that it was about 1988 when she first engaged Wong for his service.

39.  Chan Sui Cheong is the rent collecting agent of the landlord of No.8 Ka Shin Street.  He confirmed that Wong’s shop had been there for approximately 20 years.  The shop effectively blocked the Front Portion so that no one could pass through.

40.  As to the Rear Portion, Wong said that part was in the open when he started occupying there.  Towards the end of 1989 and the beginning of 1990, he erected a canopy of about 6 feet long to shelter the building materials, tools and equipment that he stored there.  He could identify the rust marks on the wall indicating the positions of the metal frames then erected to support the canopy.  The canopy was removed by the IO while he was not at the shop one day in late 2008.  On the same occasion, his properties there were removed, the end of the shop sealed up, his metal gate at the Fuk Chak Street end removed and replaced by the current metal door.

41.  Besides Lo Sheung Wa and Chan Kin Leung, another witness Lo Shu Fong testified that he had been to the Rear Portion to collect and to return materials, tools and equipment when Wong contracted him to work during the few years after the shop was opened.  All of them gave evidence that the Fuk Chak Street end of the Lane was closed with a locked metal gate.

The IO’s case

42.  The IO contends that apart from Wong, there were other persons occupying the Lane in or since 1987. These persons included Madam Huen To, Au Koon Wah, Madam Lui Soo Kum and Lui Man Sing.

43.  As mentioned, the names of these persons appeared on the bills produced by Wong.  Worth mentioning are the two Lui’s.  It only transpired from the land search produced during the trial that they were and still are the registered owners of No.8 Ka Shin Street.

44.  Upon her application, I gave leave to Miss Yang to further cross examine Chan Sui Cheong on matters arising out of the discovery of the identities of the owners of No.8 Ka Shin Street from the recently produced land search.  Chan was thus re-called; but only to confirm that Lui Soo Kum is his sister in law and the sister of Lui Man Sing.  Both of them have emigrated to the New York, USA for decades.

45.  Chan added that when he took over the rent collecting responsibility from his predecessor approximately 20 years ago, Wong’s shop was already there.  He was not in a position to tell the prior situation of No.8 Ka Shin Street, including the prior split of the premises into A and B as Wong explained.

46.  The IO called one witness, Ho Man Lai, who has been the Vice Chairman of the IO since 2008, though he has been member of the management committee since 2004.  Ho did not really have personal knowledge about the alleged occupation of the Lane since 1987 by Madam Huen To, Au Koon Wah and the two Lui’s.

47.  Obviously the IO managed to refer to these names simply because of their appearance in the documentary evidence disclosed by Wong.  As mentioned, Wong gave direct evidence in this respect which, in my view, is not effectively contradicted by the IO.  As far as the two Lui’s are concerned, the evidence of Chan Sui Cheong actually confirmed Wong’s case.

48.  Point was taken as to whether the metal gate erected at the Fuk Chak Street end of the Lane by Wong was at all times locked up.  According to Wong, the metal gate was secured by padlock but every now and then found damaged.  In my judgment, occasional breach of the security or unwanted invasion does not compromise the assertion, degree and intention of continuous control and possession of land as one’s own.

49.  It was suggested on behalf of the IO that other people also had access to the Rear Portion.  The IO were referring to the residents of and visitors to the structures that once existed in what is now the Open Yard.  It was suggested that the door openings on the dividing wall were evidence of the means through which these people obtained access to the Rear Portion.

50.  Such suggestion is not part of the IO’s pleaded case.  Further, there is no actual evidence to the alleged effect.  Ho of the IO did not claim to have witnessed the alleged use of the door openings as means of access into the Lane by these people.

51.  There is also lack of evidence of the primary facts in support of such inference either.  Even assuming that there were residents of and visitors to the structures that used to exist in what is now the Open Yard, I find it hard to draw the inference as contended, in the absence of any evidence of the configuration of the structure in relation to the door openings then.

52.  As the Front Portion was occupied by Wong’s shop; and if the Fu Chak Street end of the Lane was closed by the metal gate erected by Wong, one wonders what sort of access to the Lane through the doors openings could have been.  Speculation with a view to somehow justifying the once existence of these door openings does not assist the IO, particularly when the time when they came to exist is unknown too.

53.  Referring to the 2 manholes located on the ground of the Rear Portion, it was suggested that the workmen engaged on behalf of the IO had the liberty to enter there for maintenance over the past decades.

54.  Again the allegation does not transpire from the current version of the pleading.  Ho Man Lai of the IO gave no direct evidence in support.  Further the suggestion that this kind of entry into the Rear Portion freely in past decades is difficult to reconcile with his evidence that that portion of the Lane was constantly lumped with a lot of things and rubbish.  He managed to recall one occasion when Fuk Chak Street was flooded; and the workmen from the Drainage Services Department did enter the rear portion of the Lane to unblock the manholes.  Wong actually referred to that isolated occasion too in his evidence.

55.  It was suggested on behalf of the IO that serious consequence to the maintenance of the drainage of the Building could result from the dispossession of the Lane from it.  Assuming that access to the manholes would be necessary for this reason, the fact that the IO has been dispossessed of the Lane does not necessarily mean that it cannot have any right whatsoever to access there.  Whether some sort of easement could exist in the circumstances is not an issue in this case so that I do not venture to say anything about that.  Whether certain arrangement could be made by agreement is also something that need not be ruled out.

56.  The IO argued that the structure that houses Wong’s shop was an unauthorised one; and its condition is far from safe.  It is suggested that the continued existence of the structure will pose danger to the people in the neighbourhood.

57.  That the structure was an unauthorised one is properly beyond dispute.  Nevertheless, whilst the structure is a piece of evidence of the continuous possession of the Lane by Wong in the past; its continued existence is not a pre-requisite to Wong’s establishment of his right and interest over the Lane in the present case.

58.  What the court is asked to do is to declare his right and interest in the Lane, not the right in keeping the structure there.  Whether the structure needs to be removed is a matter for the Building Authority and Wong.  If injury or property damage is caused by the condition of the structure to any third party in the interim, it will be the liability of Wong, not the IO.

59.  At the end, the determination of the issue of adverse possession is a question of fact.  Wong and his witnesses told the court what they saw and knew.  Their evidence impressed me as being candid and straightforward.  I cannot say the same in respect of the witness for the IO whose ability to give direct evidence of what happened during the relevant period of time is doubtful.  On balance, I prefer the evidence of Wong and his witnesses in case of discrepancy with the evidence adduced on behalf of the IO.  I find on the evidence that Wong has as a matter of fact been in possession of the Lane since 1987.

60.  It is interesting to note that at one point, even the IO (by its original pleading) admitted that it came to realise that the Lane formed part of the common parts of the Building only upon receipt of the BD notice to demolish the unauthorised structures there in May 2008.  As Ho Man Lai of the IO eventually admitted in court, the current iron door was erected by the IO at the Fuk Chak Street end of the Lane subsequently in about September 2008.  I find that Wong’s possession of the Lane since 1987 has all along been, and understood by Wong to be, in his own name to the exclusion of the world at large in the absence of intervention until what happened in 2008 as mentioned above.

Section 34I of the BMO

61.  Section 34I of the BMO confers a right of action in case of conversion of any common part of the building that will be treated as breach of the deed of mutual covenant.  There is dispute as to whether this provision targets someone like Wong who is neither a co-owner of the Building and nor a party to the governing deed of mutual covenant.

62.  Miss Yang submitted that the section applies to Wong, relying on The Incorporated Owners of No.27A Chatham Road, Kowloon v Mr Lee or Unlawful Occupier (Lee Kai Kong (李啟剛) & Anor, CACV 2238/2001 (2 August 2002); The Incorporated Owners of Kwan Sen Mansion v So Kwai Chor, HCMP 134/1994 (6 June 2002); and The Incorporated Owners of Man Hong Apartments v Kwong Yuk Ching & Ors, CACV 498/2000 (27April 2001) whereas Mr Yin persuasively submitted otherwise.

63.  In view of my conclusion on the facts against the IO, a conclusion on this question of construction is not called for.  In any event, for the purpose of the claim for possession, occupation rent or mesne profit or damages for trespass, as prayed for in its pleading, reliance on section 34I of Cap.344 is actually unnecessary, even if not inappropriate.  The right of the IO to commence proceedings on behalf of all the owners of the Building is conferred by sections 16 and 18.  The cause of action against a trespasser, who is not a co-owner, of the common part of the Building is in tort.  These would have been all the IO needed.

Conclusion

64.  For the above reasons, I conclude that by the time the IO sought to recover the Rear Portion by actual re-entry in 2008 and the Front Portion by legal proceedings, Wong has already been in possession of the Lane for not less than 20 years.  Pursuant to section 7(2) of the LO, the owners of the Building, and the IO, ceased to have any right of action to recover the Lane from Wong.  Pursuant to section 17, the title of the owners of the Building in the Lane has been extinguished.

Loss and damage

65.  This is the claim for loss and damage as a result of the IO’s trespass of the Lane since September 2009.  The claim is not particularised in the pleading or Wong’s both statements.  It was not until a week before the trial did Wong, through his solicitors, sent to the solicitors for the IO the particulars of the alleged loss and damage.  A copy of that letter was inserted during the trial.

66.  It is alleged that the materials, tools and equipment belonging to Wong that had been removed by the IO in 2009 cost HK$12,867.  Wong also claims a sum of HK$23,500 being the cost of repair to be carried out after the recovery of the Rear Portion.

67.  Some 40 items of materials, tools and equipment have allegedly been removed from the Lane without his knowledge in 2009.  There is no convincing evidence, if at all, how Wong managed to do the itemisation a week prior to the trial, in the absence of any record or document.  Wong’s evidence in court regarding their identification, quantification and suggested value bears all the hallmarks of arbitrariness.  I am not at all impressed.  Accepting that the incident happened and as a result of which Wong has lost his properties, yet in the absence of substantive proof, I am only prepared to award him nominal damages of HK$100.

68.  The cost of repair is said to be incurred for erecting the canopy and the metal gate at the rear portion of the Lane.  However, even on his own land, it is doubtful whether Wong will be authorised to keep the existing structure that houses the shop front, let alone erecting the canopy and the metal gate as he may wish.  Whilst he may be entitled to claim for the value of the canopy and the metal gate lost, I am not prepared to award him the cost of putting up new ones.  In any event, the amounts to be incurred are again arbitrary and put forward in the absence of quotation whatsoever.

69.  In view of my conclusion, the IO had no right to erect the steel door at the Fuk Chak Street end of the Lane in the first place.  Wong is entitled to demand its removal.  But I make no order as to Wong’s prayer for the key to it.

Order

70.  I grant the declarations that pursuant to section 7(2) of the LO, the owners of the Building, and the IO, ceased to have any right of action to recover the Lane [3] from Wong; and pursuant to section 17, the title of the owners of the Building in the Lane [3] has been extinguished.

71.  There shall be judgment for nominal damages in the sum of HK$100 with interest thereon at the judgment rate from the date of writ until payment.

72.  The counterclaim is dismissed.

73.  The IO shall pay Wong’s costs of this action, including his costs of defending the counterclaim and any costs reserved.  Costs shall be taxed, if not agreed, with certificate for counsel.  Wong’s own costs shall be taxed according to Legal Aid Regulations. In the absence of application within 14 days to vary, this costs order shall become absolute.

[1]: Page 8 of Trial Bundle Part I.

[2]: Page 8A of Trial Bundle Part I.

[3]: As defined in the Amended Statement of Claim and identified in the plan attached thereto (i.e., [1] above).