WONG KOON WAH v. ALL PERSONS IN OCCUPATION OF LOT NO. 775 IN DEMARCATION DISTRICT 216 AND ANOTHER

HCMP 1716/2012

[2020] HKCFI 3094

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1716 OF 2012

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J U D G M E N T

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Table of Contents

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A.	Introduction
B.	Brief Background
C.	Scott Schedule of Disputed Issues
D.	The witnesses
E.	The handwriting experts’ evidence
	E.1     On P’s Chinese signatures
	E.2     P’s English signatures on the 1979 P/A and Memorial 97045
F.	The gist of P’s written evidence
	F.1     How P came to make the Small House Application
	F.2     How P came to execute the 1977 London P/A
	F.3     After the issue of New Grant
	F.4     Approaches made to P re the Land
G.	P’s credibility
	G.1     P’s Small House Application
	G.2     P’s knowledge of the proposed development in the Area
	G.3     P’s address in Hong Kong
	G.4     Whether P had signed the 2nd Application Letter
	G.5     The Loan
	G.6     The 1977 London P/A
	G.7     P’s knowledge of the completed development
	G.8     Conclusion
H.	Issue 1 - The 1979 P/A Issue
I.	Issue 2 - The Trust Issue
J.	Issue 3 - The Beneficial Interest Issue
	J.1     From P to Ho
	J.2     From Ho to Honoo
	J.3     From Honoo to Edico
	J.4     Edico to D2
	J.5     Conclusion on devolution of beneficial interests
K.	Issue 4 - Waiver/Acquiescence Issue
L.	Issue 5 - The Adverse Possession Issue
	L.1     Possession
	L.2     Intention to possess
M.	Issue 6 - The Illegality Issue
N.	Issue 7 - The Limitation Period Issue
O.	Issue 8 - The Counterclaim to Counterclaim Issue
P.	Conclusion

A.     Introduction

1.  The plaintiff (王冠華) (“P”), who is the registered owner of a piece of land in Sai Kung, issued the present action to claim for possession of the piece of land against unknown occupiers.  Subsequently, the company Rich Trend Limited applied to join as 2^nd defendant (“D2”) herein.

2.  The land concerned is Lot 775 in DD 216 (“Land”) held under New Grant no 6201 dated 25 October 1977 issued to P, subject to the “General Conditions” and “Special Conditions” therein (“New Grant”)[1]. P is an indigenous villager of a village called Tai Wan Village (大環村) in Sai Kung, New Territories (“Village”) and the Land is situate in or in the vicinity of the Village, which is now also known as No 156, Tai Wan, Sai Kung[2].

3.  The Land, together with 11 other lots, namely Lots 769, 770-776 (including 775), 778, 780-782 in DD 216 (collectively “12 Lots”) form an area (“Area”) and a “small house” of 3 storeys high and approximately 700 sq ft per floor (“Small House”) had been built respectively on each of the 12 Lots.  The Area or the development thereon is currently known as “Greenery Vista”.  The Small House built on the Land is known as “House 8”.

4.  It is P’s case that the Small House on the Land was not built by him, nor built with his knowledge, authorization or consent and that there had been frauds and conspiracy whereby he was deprived of possession of the Land (“Fraud”).

5.  D2 is a company incorporated under the laws of British Virgin Islands on 19 October 1989 and is a wholly-owned subsidiary company of the Shun Tak Group of which the flagship company is Shun Tak Holdings Limited, a company listed on the Hong Kong Stock Exchange and controlled by the family of the late Dr Stanley Ho (“Shun Tak Group”).  D2 now claims to be in possession of the Land.

6.  D2’s case is essentially that (i) P held the Land on resulting trust and/or constructive trust by common intention and/or understanding of the parties for one Ho Loi Fat (何來發) (“Ho”), through whom and whose successors D2 obtained beneficial ownership of the Land; or alternatively, (ii) P is estopped from recovering possession by reason of his representation by conduct in having executed an irrevocable power of attorney in 1979 (“1979 P/A”) and parted with possession of the Land with the intention that Ho and other persons would rely thereon to their detriment; and/or alternatively (iii) if Ho and his successors including D2 did not have beneficial ownership of the Land, D2 has acquired a possessory title to the Land by virtue of adverse possession since around 1996.

7.  Counsel Mr Chan Chi Hung SC and Mr Derek J Y Chan appeared for P at the trial, and Mr Erik Shum and Mr Duncan Ho appeared for D2.  D1 was not represented and no one appeared on behalf of D1 at the trial.

B.     Brief Background  

8.  P was born in July 1956 in Hong Kong.  His family members, consisting of his parents and his 4 surviving siblings (a younger brother of P’s died some years ago) were/are all indigenous villagers in Hong Kong.  He ranked 2^nd amongst his siblings.  When he was about 2 years old, his father emigrated to London to work in a Chinese restaurant and that between early 1970s to mid 1970s, all his other siblings also emigrated to London, leaving his grandmother and him living in one of the small houses owned by his father in the Village. 

9.  According to P, later when he was about 20 years old in 1977, his mother forced him to emigrate to United Kingdom by buying him an air ticket, and that he then moved to London in May 1977, since when he has been residing in London[3].  According to P, his mother later returned to live in Hong Kong sometime in 1978.

10.  As shown in P’s passport, he left Hong Kong on 7 May 1977 and entered United Kingdom on 8 May 1977, about two months before he reached the age of 21.

11.  It was P’s case that prior to his emigration, one day in or about 1974 or 1975, his cousin Wong Si Man (王思民) (“Wong”) suggested to him that he could make an application for a grant to build a Small House under the Government’s Small House Policy[4] (“Small House Application”).  P recalled that he had told Wong that he was unable to pay for a premium to obtain the new grant, and that Wong had told him that Ho, who was Wong’s father-in-law, could lend P a personal loan (“Loan”) and that P could repay Ho the Loan later and that, in future, if P were to sell his interest in the New Grant/the Land, he would first approach Wong and Ho as prospective purchasers, to which P indicated that he had no objection in principle.

12.  Prior to his moving to London, on 7 April 1976, a letter was purportedly sent by P to the Sai Kung District Office (“District Office”) to seek approval to build a Small House in the vicinity of the Village and to seek directions as to how to proceed (“1^st Application Letter”)[5].   Although there seemed to be some misunderstanding as to whether P was challenging the authenticity of his signature on the 1^st Application Letter, I am prepared to accept that there was a mistake/misunderstanding by P’s legal advisors, and that P’s case was that his signature on the 1^st Application Letter was genuine.

13.  As seen in the record of the Companies Registry, Ho was initially described as a “fish merchant”, and later a “merchant”, residing at 108-110, Man Nin Street, Sai Kung.  As at 11 January 1978, Ho and another person Ho Chi Shing were the two directors and shareholders, each holding one issued share, of a company called Honoo Limited (“Honoo”)[6].

14.  It was P’s case that the offer of the Loan by Wong and Ho  to pay for the premium and to proceed with the Small House Application and to obtain a new grant was for their own secret purpose of furthering the Fraud against P[7].

15.  The Land was granted to P by the District Office pursuant to the New Grant on 25 October 1977.

16.  As seen in the New Grant, under General Condition 4(a), the grantee was to develop the Land by the erection thereon of a Small House in compliance with the Special Conditions before the expiration of 30 months from the date of grant (“Deadline”).

17.  It was P’s case pleaded that he never proceeded with the development of the Land or building the Small House thereon, and he thought that the Land must have reverted back to the Government due to the long lapse of time and that he thought the Land was granted to another grantee[8].

18.  The documents obtained by P from the District Office and the Land Registry showed that the 12 Lots including the Land formed one single development and that P had purportedly entered into a power of attorney on 18 December 1979 appointing Ho as his attorney to deal with the Land, namely the 1979 P/A[9], and Ho, as P’s attorney, entered into a development agreement on 19 December 1979, signed by Ho on behalf of P, with Honoo (signed by one Mr Lock Kwan Bui (“KB Lock”) on behalf of Honoo) as the developer[10] (“19.12.79 Development Agreement”).  From the registration record at the Companies Registry[11], Ho and the other director both resigned as directors of Honoo on 5 May 1978 and there were two new directors appointed, a Mr Lock Shiu Cheung and a Madam Yeung Wan Kam and on the same day the shares of Ho and the other shareholder  were also transferred to Mr Lock Shiu Cheung and Madam Yeung Man Kam, and there was also a change of Honoo’s registered office.  All this indicated that Ho was no longer connected with Honoo after 5 May 1978 and that the Lock family, of which KB Lock was a member, had taken over Honoo.

19.  Subsequently on 28 June 1980, Ho entered into a Deed of Substitution whereby KB Lock was appointed Ho’s substitute attorney under the 1979 P/A[12] (“1980 Substitute P/A”).

20.  As the documents also showed, the proposed development on the 12 Lots took a very long time, due to various problems including lack of access road and rejections of the developer’s proposed site formation plans and also lack of water supply.  Due to the delay, there had been one extension after another by the District Office or the Sai Kung District Lands Office (“District Lands Office”) of the Deadline on payment of a fine (“Extension”). 

21.  By a deed dated 28 April 1989, Edico Development Limited (“Edico”) became the substitute developer of the Land in place of Honoo[13] (“28.04.89 Deed”).  Edico was incorporated under the laws of Hong Kong on 10 March 1989 and as at April 1989, there were 3 directors, namely Madam Lai Oi Ye (黎愛兒) (“Ms Lai”) and a Lee Shiu Wan (李笑雲) (“Lee”) and a Mr Lau Wan Hei (劉運喜) (“Mr Lau”), but only Ms Lai and Lee were shareholders of Edico[14].

22.  Thereafter, it would then appear that Edico was in need of funds and on 7 February 1994, a loan agreement was entered into by a company called LionTeam Investments Limited (“Lion Team”) as the “Lender” and Ms Lai and Lee as “First Borrower” and Edico “Second Borrower”[15] (“Loan Agreement”).  The Loan Agreement was signed by its Company Director Mr Anthony Chan Wai Lun (“Mr WL Chan”) and pursuant to which a credit facility to be provided in 3 tranches totalling HKD 25.2m was extended to the borrowers for the development of 12 Small Houses, one on each of the 12 Lots (“Tai Wan Project”).  The credit facility was to be secured by (i) a charge, debenture and assignment by Edico of the sale proceeds of the Small Houses on the 12 Lots and (ii) a legal charge by Lee over a property in Admiralty Centre.

23.  Lion Team is an associate company of D2. 

24.  Subsequently, on 23 September 1995, a joint venture agreement was entered between D2 and Edico and its shareholders Ms Lai and Lee  (“JV Agreement”)[16], pursuant to which D2 and Edico agreed to jointly develop the Tai Wan Project upon the terms and conditions therein.

25.  One of the terms was for D2 to advance a sum of HKD 14m to Edico and its two shareholders to enable them to finance or refinance all acquisition or other costs incurred by Edico in connection with the Tai Wan Project.  This sum was in fact used to repay to Lion Team on behalf of Ms Lai and Lee Shiu Wan in order for Edico to be released from the debenture/charge/assignment of the sale proceeds, namely one of the securities in the Loan Agreement for the credit facility[17].  It would appear that on the same day of the release, ie 2 October 1995, as seen in the record of the Companies Registry, a further debenture was then created by Edico in favour of D2 to secure the loan of HKD 14m[18].

26.  Although the debenture referred to the HKD 14m as a loan, D2 and Edico maintained that they entered into a joint venture pursuant to the JC Agreement.  It was D2’s case that pursuant to the JV Agreement, D2 took over the development as the new developer and exclusive possession of the Area from Edico together with the minor site works which had by then been done by Edico. 

27.  It was not until 25 November 1998, some 21 years after the issue of the New Grant that a Certificate of Compliance was issued by the District Lands Office in relation to the Small Houses built on the 12 Lots, including the Small House on the Land[19].

28.  In about 2007 or early 2008, according to P, he was thinking about his retirement, and that he and his wife were then considering relocating to Hong Kong[20].  They visited the District Office on about 4 January 2008, to enquire about the necessary procedures for applying for a grant of a Small House[21].  It was during the course of the enquiry that to their surprise that there was a charging order absolute registered in respect of the small house and the Land on 22 February 1990[22] (“Charging Order Absolute”), and he was very shocked, but as they had to return to London the following day, they had to stop investigating into the matter themselves and through a relative, they immediately instructed a firm of solicitors Steven HS Tang & Co who wrote to the Secretary for Justice and the District Lands Office between 23 September 2008 to 16 October 2008 for copies of documents in relation to the Land for investigation purposes.

29.  It was P’s case that through the investigation by his solicitors, he discovered 2 false powers of attorney, and that when he and his wife visited Hong Kong on holiday in 2009, he made a report to the police on 31 December 2009 (“1^st Police Report”).  The 2 false powers of attorney according to P were (i) the 1979 P/A; and (ii) the 1980 Substitute P/A.  P claimed he had no idea who KB Lock was.

30.  During the course of the investigations by P’s solicitors, numerous documents were obtained by them from the District Lands Office, the Land Registry and/or the Companies Registry.  The only documents which P admitted to have borne his genuine signatures were (i) the 1^st Application Letter and (ii) a power of attorney executed by P in London on 19 October 1977 (“1977 London P/A”). In particular, as set out later, he alleged there were 4 forged documents (“4 Forged Documents”).

31.  As for the Charging Order Absolute, this turned out to be made by mistake by the Hong Kong Housing Authority in an action against an unrelated judgment debtor with the same English spelling of the name as P’s, and the Charging Order Absolute was later discharged on 10 March 2010[23].

32.  On 16 August 2012, P commenced the present action by issuing an originating summons under Order 113 rule 2 for possession of the Land under Order 113 rule 2 of the Rules of the High Court on the ground that he was entitled to possession and that the person(s) in occupation was (were) in occupation without licence or consent.  The originating summons was supported by P’s affirmation filed on the same day (“1^st Affirmation”).  The action was ordered on 10 May 2013 to proceed as if commenced by writ and P’s statement of claim was then based on trespass. 

33.  As mentioned earlier, D2 applied to join in this action and filed a defence and counterclaim.  In D2’s re-amended defence and counterclaim, D2 counterclaimed, amongst other things, for a declaration that D2 is the beneficial owner of the Land and an order that the Land do vest in D2 for the residue of the lease term of the Land, subject to Edico’s rights as D2’s partner under the JV Agreement, or alternatively, a declaration that P’s right to bring an action to recover the Land has become statute-barred and that P’s title to the Land has been extinguished and D2 has acquired a possessory title to the Land for the residue of the lease term (“Counterclaim”).

34.  In P’s re-re-amended reply and defence to counterclaim (“RRARDC”) P pleaded, amongst other things, a number of persons, including Wong, Ho, Lock and Edico and/or their agents and a number of persons unknown to P as averred in various paragraphs in the RRARDC (“Conspirators”) combined and conspired together to defraud P of the Land and to injure P and to cause him loss of the Land by unlawful means[24].  P further counterclaimed against D2’s counterclaim for, amongst other things, a tracing enquiry and an account of D2 for all profits or fruits of such development on the land, an order for payment of such, and a charge on the development on the Land and the Land to secure such payment by D2 (“Counterclaim to Counterclaim”). 

C.     Scott Schedule of Disputed Issues

35.  The parties have agreed to a Scott Schedule of 8 disputed issues (“Scott Schedule”), as follows:

(i)  Whether the 1979 PA was a genuine document (“Issue 1 – The 1979 P/A Issue”);

(ii)  If genuine, whether the 1979 PA had the effect (in law and in fact) of divesting P of his beneficial interest in the Land, and/or whether a resulting or common intention constructive trust had been established (“Issue 2 – The Trust Issue”);

(iii)  Whether D2 had acquired a beneficial interest in the Land (“Issue 3 – The Beneficial Interest Issue”);

(iv)  Whether D2 had established its alternative case based on waiver/acquiescence (“Issue 4 – The Waiver/Acquiescence Issue”);

(v)  Whether D2 had proved the elements of adverse possession for the requisite period (“Issue 5 –The Adverse Possession Issue”);

(vi)  Whether the doctrine of illegality precluded D2 from asserting its adverse possession claim (“Issue 6 – The Illegality Issue”);

(vii)  Whether the limitation period should be postponed due to the deliberate concealment of facts relevant to P’s cause of action (“Issue 7 – The Limitation Period Issue”);

(viii)  Under P’s Counterclaim to Counterclaim, whether D2 was liable as a constructive trustee in respect of the fruits and proceeds of the fraudulent use of the Land (“Issue 8 – The Counterclaim to Counterclaim Issue”).

D.     The witnesses

36.  P had filed a total of 4 witness statements, which I shall refer to respectively as his 1^st, 2^nd, 3^rd and 4^th Statement.

37.  P had called a handwriting expert Dr Daniel In-jea Wong (“Dr Wong”) of The Forensics Company on his alleged forged Chinese signatures, and also a US Forensic Document Examiner Mr Grant R Sperry (“Mr Sperry”) on his alleged forged English signatures.  Mr Sperry gave evidence by video link.  

38.  D2’s Company Director Mr WL Chan and D’s Finance Manager, Wong Shu Ho, (“Mr SH Wong”) each provided a witness statement and attended trial to give oral evidence.

39.  One of the directors and shareholders of Edico, Ms Lai, also gave a witness statement and attended the trial to give oral evidence on behalf of D2.

40.  D2 had produced a valuation report from RHL Appraisal Limited dated 30 August 2018 as to (i) the market value of the Land as a bare site for development less premium payable, and (ii) the construction costs of a hypothetical Small House on the Land[25] (“Valuation Report”). As the valuations were not challenged, the valuer was not called to give oral evidence.

41.  About 6 weeks before the commencement of the trial, on 16 June 2020, D2 was granted leave by this Court to file a witness statement of Mr Li Fung Cheung, John, a solicitor and partner of the solicitors firm Messrs Foo & Li, (“Mr Li”), by way of an affidavit and to produce various documents located by him in his firm’s godown[26]. Reasons were subsequently handed down by this Court on 22 June 2020 (“Reasons”). Mr Li attended the trial to give oral evidence on behalf of D2.

E.      The handwriting experts’ evidence 

42.  I will first consider the handwriting experts’ evidence.  Dr Wong was called by P to give expert evidence on P’s Chinese signatures on the alleged forged documents and Mr Sperry was called by P to give expert evidence on P’s English signatures/initials on the 1979 P/A and P’s English signature on the Memorial No 97045 (with a copy of the 1979 P/A annexed) registered in the Land Registry on 18 December 1979 (“Memorial 97045”)[27].

E.1    On P’s Chinese signatures

43.  The 4 Forged Documents alleged by P were as follows:

(i)  a letter dated 27 January 1977 in which P purportedly applied for a different piece of land from that in his 1^st Application Letter (“2^nd Application Letter”)[28];

(ii)  an undertaking dated 22 August 1977 purportedly signed by P in front of an officer of the District Office (“Undertaking”)[29];

(iii)  a Chinese letter dated 18 October 1989 to the District Office  purporting to bear the Chinese signature of P but in simplified Chinese and requesting the District Office to send an officer to set the boundary of the Land (“1989 Boundary Setting  Letter”)[30];

(iv)  an application form dated 20 August 1990 to the Building Authority (under section 4(1) of the Buildings Ordinance, Cap 123), for approval of plans of building works and/or street works and notice of appointment of authorized person and notice of appointment of registered structural engineer as consultant to appointed authorized person (“1990 Form 9”)[31].

44.  As appeared in the letter of instruction from P’s solicitors on 5 May 2016[32], Dr Wong’s opinion was sought only in relation to the questioned documents (i) to (iii) above.

45.  Dr Wong later submitted his expert report of 24 October 2016[33]. As seen in his report, Dr Wong was provided with 2 known genuine signatures of (one on the 1^st Application Letter and one on a copy of P’s cancelled old British passport stated by Dr Wong to be of unknown date) and was, upon his request, provided with 40 samples of P’s Chinese signature on 31 May 2016. On 29 June 2016, Dr Wong attended the District Lands Office to examine the original of the 1^st Application Letter, and also the originals of items (i) to (iii) which allegedly contained the questioned signatures.  On 2 August 2016 and on 3 October 2016, Dr Wong said he examined the original of Item 5 (namely the cancelled British passport). 

46.  Dr Wong’s opinion in his report was that it was “highly probable” that P’s signature on item (i), ie the 2^nd Application Letter, did not share a common authorship with the 2 known genuine signatures of P and the 40 requested Chinese signatures of P.  As for (ii), ie the Undertaking and (iii), ie the 1989 Boundary Setting Letter, Dr Wong’s opinion was that it was “probable” that P’s signatures thereon did not share a common authorship with the 2 known genuine signatures of P and the 40 requested samples of Chinese signatures of P.

47.  During the trial, Dr Wong explained that he was physically present in P’s solicitors’ office on 31 May 2016 and that P signed 40 samples of his Chinese signature in his presence.  Dr Wong said he had explained the whole process to P and that P was to sign in front of Dr Wong for the purpose of using his signatures for comparison with the questioned signatures.  Dr Wong explained that 10 photocopies of item (ii) the 1979 Undertaking were taken with P’s signature obliterated[34], and P was then requested to sign in the space of the obliterated signature on each of those 10 photocopies and that each photocopy was then removed from P before he signed the next photocopy.  The same process was then repeated with 10 photocopies of item (i) – the 2^nd Application Letter[35], and with 10 photocopies of item (iii) – the 1989 Boundary Setting Letter[36].

48.  In fact, the same process was also repeated with 10 photocopies of the 1^st Application Letter[37].

49.  For the 2 genuine signatures, Dr Wong agreed that P’s Chinese signature on his passport was an odd one out, in that it was signed horizontally, and not vertically unlike the one on the 1^st Application Letter, or those on the questioned documents or the sample photocopies, but Dr Wong said orientations of Chinese characters did not always make significant changes to the writing movement.

50.  The 40 requested sample signatures were supplied by P to Dr Wong on 31 May 2016, some 40 years after the 1^st Application Letter, 39 years after item (i) and item (ii), and some 27 years after item (iii).   P’s evidence was that after he moved to London, he very seldom used or signed his Chinese signature.  Dr Wong had agreed with Mr Shum that for someone to sign his Chinese signature at the age of 60 after very seldom signing it since he was about 20 years old, his signature 40 years later would be very different.

51.  Under cross-examination by Mr Shum, Dr Wong had said he remembered that he did not show any P any of the signatures to P prior to him signing those 40 samples.  Dr Wong had further agreed that it was important not to show to P his genuine signature on the 1^st Application Letter prior to his signing those 40 samples.  Although he would not say it was wrong, he accepted that this would cause uncertainty as to whether such an act could have influenced P when signing his sample signatures and that it was inappropriate.  Dr Wong’s evidence was that he did not arrive at the same time as P, and that when he arrived, P was already there in his solicitors’ office.  

52.  It was P’s evidence during cross examination that he could only provide 2 genuine Chinese signatures to Dr Wong because after he moved to London in 1977, he had only used his English signature.  When it was put to him that he would not have recalled how he signed his Chinese signature when he was to provide the 40 samples to Dr Wong some 40 years later, P said he could recall his Chinese signature as he had seen his genuine signature on the 1^st Application Letter and that P further said that he followed that signature on the 1^st Application Letter.

53.  Since Dr Wong had relied not only on the 2 genuine Chinese signatures but also the 40 sample signatures in coming to his conclusions, in light of P’s evidence, I agree with Mr Shum that Dr Wong’s conclusions would be flawed.  Further, although Dr Wong was provided with 2 genuine Chinese signatures for examination, the only certain contemporary genuine Chinese signature would seem to be the one on the 1^st Application Letter, namely in 1976.  Dr Wong had described P’s signature on his cancelled British passport was of unknown date[38].  The cancelled British passport provided to Dr Wong appeared to be the one numbered “172775”[39].  This passport was issued on 28 March 1972 when P was aged about 15 years 8 months old[40].  It would appear that the date of P’s signature thereon could be around the date of issue of the passport, which meant that P’s Chinese signature thereon was some 5 years prior to the 2^nd Application Letter or the Undertaking, or some 17 years prior to the 1989 Boundary Setting Letter.  In any event, the date of the signature was unknown. 

54.  Dr Wong’s conclusions would have to be viewed in light of all above and I am of the view that his conclusions may not be reliable, in light of in particular, a lack of contemporary genuine signatures, and also P’s admission that the 40 samples were written by him after he had seen his Chinese signature on the 1^st Application Letter and he followed the signature thereon.   

E.2    P’s English signatures on the 1979 P/A and Memorial 97045

55.  As set out in the Scott Schedule, one of the major disputed issues was whether P’s signature/s and initials on the 1979 P/A were genuine.  If it were found to be genuine, then Ho as P’s attorney was authorized to sign in P’s name, and KB Lock in turn as P’s substituted attorney was conferred full power and authority as Ho was likewise authorized to sign in P’s name.  Thus, as submitted by Mr Shum and which I accept, whether P’s signatures on items (iii) and (iv) were forged or not would not be relevant as the person signing would have full authority to do so.

56.  It was not quite clear as to why P had to instruct a separate handwriting expert for his English signatures.  Dr Wong is an experienced handwriting expert.  He is qualified as an expert in both Chinese and English handwriting and during the trial, before 2016, he had acted as an expert witness in both English and Chinese signatures.

57.  When P was asked during the trial as to whether he knew that Dr Wong was an expert in not only Chinese but also English signatures, P claimed he did not know.

58.  As pointed out by Mr Shum, when this Court gave leave to D2 to introduce Mr Li’s evidence in relation to the execution of the 1979 P/A, there was no reason why P could not have instructed Dr Wong to examine his English signature on the 1979 P/A, instead of instructing Mr Sperry who lives in the United States.  As a consequence, Mr Sperry was not able to physically examine the contemporaneous copies of documents found by Mr Li in the box retrieved from his firm’s warehouse, in particular the Cancellation Letter (as defined later in this judgment) which was said to be signed by P in duplicate.  Nor was Mr Sperry able to physically attend the Land Registry to examine P’s signature on the Memorial 97045.  As said earlier, Mr Sperry also had to give evidence by video link.

59.  The instructions to Mr Sperry were sent by Dr Wong (The Forensics Company) on 16 July 2020[41].  Mr Sperry was provided with control signatures (digital images) purportedly written by P during the approximate period of 1977 to 2010.  Mr Sperry was further provided with requested specimen signatures (digital images) purportedly written by P in June 2020.

60.  There were 11 questioned signatures (referred to as Exhibits Q1 to Q11 in Mr Sperry’s report).  Q1-Q8 were the questioned signatures/initials on the 1979 P/A, Q9-Q10 were P’s signatures on the Cancellation Letter as defined later and said to be signed by P in duplicate, and Q11 was P’s signature on a copy of the Memorial 97045[42].

61.  Mr Sperry’s opinion was that the Q1 through Q10 were probably written by the same person.  He opined that there were indications that Q1 through to Q10 were not written by P[43].  He had said that in addition to the differences he had referred to, a primary reason for his conclusion was that the control and request writings covered a 40 year period yet remained remarkably consistent; but inconsistent with respect to letter features and writing style when compared to the questioned signatures depicted on Exhibits Q1 through Q7.  He had opined that the less than definitive conclusion was directly related to the absence of sufficient comparable and contemporary (eg 1979/1980) writings by P and the brevity of the questioned signatures[44].

62.  As for Q11, Mr Sperry opined that this was a poor quality office machine reproduction and the level of writing detail was so poor as to render the signature unsuitable for identification or comparison purposes. 

63.  As seen in Mr Sperry’s report, Exhibits Q1 through Q11 and the 18 control and requested signatures (AC 1-18) were received electronically from the Forensics Company (Hong Kong) via email attachments and downloads from a shared DropBox folder[45].

64.  As seen in Mr Sperry’s report, AC 16 was a 1977 signature,  AC17 was in 1988, AC 6 was in 1997 and AC 18 was in 1998, AC 11 was in 2005 and AC 15 was in 2020[46].  The only genuine contemporary control signature was AC16, which was P’s English signature on his cancelled passport[47], which appeared to be the British passport numbered 659434 issued on 7 September 1977[48], which was in fact over 2 years prior to the signature on the 1979 P/A.  During the trial, Mr Sperry confirmed that there were no control signatures before 1977.  There was also a long gap between 1977 and 1988 with no control signatures provided to Mr Sperry by P.  

65.  During the trial, during re-examination, Mr Sperry was asked on a scale from “elimination” to “definitive” with “neither nor” in the middle, where he would say his conclusion was, and he had said to the left of “neither nor”, and later when pressed, he then said 65% likelihood that the signatures were not P’s.  However, this was not contained in his written report.  Mr Sperry’s opinion has to be considered in light of the paucity of contemporary genuine signatures and in any event, I find that Mr Sperry’s opinion, whether in his report or at trial, was far from cogent evidence that P’s signatures on the 1979 P/A were not genuine.

F.      The gist of P’s written evidence

F.1    How P came to make the Small House Application

66.  P’s evidence in his 1^st Statement was that in about 1974 or 1975, his cousin Wong, whom he said he grew up together and with whom P was on good terms at the time, suggested to him that he could make a Small House Application, and that the suggestion was made in the presence of 3 other cousins Wong Kwong Ming, Wong Chi Ho and Wong Soo Kau (“3 Cousins”) with whom P and Wong would always hang around together when P was still living in Hong Kong.  According to P, he, Wong and the 3 Cousins were then standing somewhere in the Village, and that he recalled that Wong had pointed out to them that they could choose the site, namely the Area, to develop Small Houses[49].  P said he had heard from a fellow villager and P was aware that a sum of money would be required to be paid to obtain a new grant under the Small House Application and that he recalled he had told Wong that he was unable to pay for such a premium.

67.  According to P and as mentioned earlier, Wong then told him that his father-in-law, namely Ho, could lend him the Loan to pay for the premium and that he could repay Ho some day later, and that Ho would be arranging all the application papers for them. Further Wong had expressed the hope that if P were to sell his interest in the new grant or the lot in future, he would first approach them as prospective purchasers, to which P indicated he had no objection in principle[50].

68.  In his 1^st Statement, P had referred to his 1^st Affirmation in which P had mentioned that at the time he knew that 10 other fellow villagers would be applying.  P however corrected this in his 1^st Statement  and said that what he said in his 1^st Affirmation was a mistake and that as the Area should be able to provide more than 10 lots and that only villagers within the Village could apply to build Small Houses in the Area, it therefore “indirectly occurred” to him that there should be 10 other fellow villagers making the applications, but in fact he only personally knew that 5 of them would be making the applications, namely he himself, Wong and the 3 Cousins[51]. 

69.  P’s evidence in his 1^st Statement was that at the time he was not aware that the offer of the Loan by Wong and Ho was for their own secret purpose of furthering the Fraud against him, and that he did not actually know who arranged the papers for the Small House Application and who paid the premium.  He also said he had forgotten about the Loan as the amount involved was insignificant.  Then he mentioned about a “severe conflict” with Wong, his father and his younger brother between late 1970s and early 1980s, since when he and Wong/Wong’s family had no contact and that the Loan issue did not come up.

70.  P went on to state in his 1^st Statement that after the suggestion by Wong and before he attended the District Office to sign some documents, he had not done anything in relation to the Small House Application or provided his personal data to anyone.  He remembered all he did was that he presented his HKID card and signed some documents at the then District Office.  H also recalled that it was the first time he met Ho.  He then said after he submitted the Small House Application, the District Office had arranged an interview with him in which he confirmed that he would be the person occupying the lot[52].  Not long thereafter, P then left for London.

F.2    How P came to execute the 1977 London P/A

71.  P’s evidence in his 1^st Statement was that to the best of his recollection, in about September/October 1977 in London, he received a letter from Wong representing to P that the Government would only issue a grant for a Small House if the applicant, or his authorized person, could sign on the grant.  Wong then stated that he could act as his authorized person to sign the same, and asked P to execute the 1977 London P/A enclosed in Wong’s letter authorizing Wong solely of signing on the grant which Wong could obtain for P.  According to P, due to his trust and confidence in Wong, on about 19 October 1977, he went to a Hong Kong Government office in London and executed the 1977 London P/A.  P claimed that as he did not know English, he was not aware of all the powers purportedly stated in the power of attorney and that he was told by the officer at the Hong Kong Government office in London that the 1977 London P/A would only be valid for one year and could only be used once[53].

72.  It was P’s written evidence in his 1^st Statement that after he mailed back the 1977 London P/A, the New Grant was issued to him, with Wong signing on the New Grant on his behalf.  P also said when he had a chance to read the New Grant again after the commencement of this action, he discovered Ho was in fact the witness to Wong’s signature on the New Grant[54].

F.3    After the issue of New Grant

73.  According to P’s 1^st Statement, before 2007, he did not have funds to build on the Land and that due to the erroneous belief that the Land must have been reverted to the Government by reason of the non collection of Government rates and rent as well as “non-development penalty” for many years, he did not follow up much with the Land[55].

74.  As mentioned earlier, according to P, it was on about 4 January 2008 that he and his wife went to the District Lands office, and during the course of their inquiry for a Small House Application, they discovered the Charging Order Absolute on the Land and they then instructed solicitors to carry out investigation which then uncovered part of the forgeries and illegality relating to this action, including the 2 false powers of attorney, ie the 1979 P/A and the 1980 Substitute P/A.

F.4    Approaches made to P re the Land

75.  According to P’s RRARDC[56], some one odd month after the passing away of his younger brother on 30 May 1989, P received by post a letter in English (“WKM Letter”) from another cousin Wong Kwok Man (who is also the registered owner of one of the 12 Lots)[57] (“Wong Kwok Man”). Then the following day, Wong Kwok Man telephoned P, saying that HKD 20,000 would be paid to P if P were to sign the WKM Letter, and that P later realized that Wong Kwok Man was making an offer on behalf of his boss who was Mr Lau.  P said he noted that the WKM Letter had a reference to the lot number of the Land and understood that it was an offer regarding the Land.  P said during the telephone conversation, he refused the offer by hanging up the telephone and threw away the WKM Letter. 

76.  In his 1^st Statement, P further disclosed that not long after the WKM Letter and the telephone call from Wong Kwok Man, he then got a call from a person identifying himself to be Mr Lau, who was at the time the Chairman of Sai Kung Rural Committee.  According to P, Mr Lau asked whether P had received the WKM Letter and whether P would sell the Land to him, and P said he told Mr Lau he would not sell the Land and that he would build a house thereon himself when he had enough money, and P then hung up the phone.

77.  P only disclosed in his 4^th Statement ( 9 November 2017) that he had received a note dated 19 December 2011 sent to him by one Ho Yung Hing (何容興) (“Ho Yung Hing”) regarding the sale of the house on the Land (“Note”)[58]. According to P, his visit to the Village at the end of 2011 was the first time he visited the Village after he returned to Hong Kong, bringing his wife to celebrate Christmas with his mother[59] and that his mother handed to him the Note shortly after he reached home. 

78.  P said Ho Yung Hing was a villager who lived in the Village but was not related to P’s family or Ho. On the same day that his mother gave P the Note, Ho Yung Hing turned up at his mother’s front door step, and that P had a face to face discussion with Ho Yung Hing who indicated that there was a developer interested in the purchase of the Land, and that Ho Yung Hing quoted a price of HKD 3m to P.  P said he just listened and did not respond.  P said from his investigation, he was aware that the landowners of 7 of the 12 Lots had sold their houses to D2, each for HKD 3,389,000 in about 2004 or 2005, and that the amount suggested by Ho Yung Hing to P was unreasonable.  P said he gave no indication of accepting the offer, and that P had further discovered that Lot 776 was sold for HKD 6,660,000 to a company known as Magic Bright Development Limited late in 2008.  It was P’s evidence that after the face to face discussion with Ho Yung Hing, no further contact had been made by either party[60].

G.     P’s credibility

79.  As said, P’s case was one based on the Fraud as alleged by him.  He had not sued any of the Conspirators or made any claims against any of the Conspirators.  Apart from the documents and the handwriting experts’ evidence, P had called no other factual witnesses.  

80.  It was submitted on behalf of D2 that P’s case was inherently improbable and self-contradictory, and that his evidence was not credible. 

81.  I will consider certain aspects of P’s own evidence as set out hereinafter before I deal with the agreed disputed issues. 

G.1    P’s Small House Application

82.  There were 3 documents purportedly signed by P after the 1^st Application Letter and prior to the issue of the New Grant, and they were (i) the 2^nd Application Letter; (ii) the Undertaking; and (iii) the 1977 London P/A.  As seen earlier, it was P’s case that (i) and (ii) did not bear his genuine signatures and the purported signatures thereon were forged. 

83.  P’s written evidence as to how he came to make the Small House Application has been set out earlier.  According to P’s 1 Statement, Wong’s father and P used to work for the same company in the United Kingdom, and that sometime between late 1970s and early 1980s, P had a “severe conflict” with Wong’s father, Wong and Wong’s younger brother and that the conflict began following P having a “big argument” with Wong’s father over unrelated matters, and since then, Wong and P did not contact each other[61].

84.  When cross examined in relation to the “severe conflict” during the trial, P’s evidence however changed, in that he then claimed there was no “severe conflict”, nor “big argument”.  It was P’s evidence during the trial that two weeks before he left Hong Kong for London on 7 May 1977, Wong had come to look for him and Wong asked P to look after Wong’s younger brother who was then in London. Later in London, when the company (which operated a Chinese restaurant in London but not P’s father’s restaurant) P was working for at the time was recruiting staff, P said he alerted Wong’s brother who applied to work there. However, according to P, as Wong’s brother preferred to work for a triad member, he later left the company and P then told Wong’s father about the vacancy.  Wong’s father then started to work in the same company.  Wong’s father later discovered that one of the employees (who was a triad member) was stealing money from the company and because Wong’s father went to reveal the matter to the boss, Wong’s father then received death threats from triad members, and he had to resign and leave the company.  Thereafter, there was no further contact between P and Wong or Wong’s family.  P also said subsequently he had a car accident, and P then also left the company after working there for about 10 odd years. 

85.  Thus, P’s evidence at the trial was that he did not regard what happened as a “severe conflict” and there was no “big argument” between him and Wong’s family members. However, if there had been no “severe conflict” or “big argument”, and bearing in mind that it was P’s own evidence that he and Wong grew up together in the Village and were on good terms, then there was really no reason why there was no contact between P and Wong after late 1979/early 1980s.  I find P’s evidence was inconsistent and that the reasons given by P were not convincing as to why there had been no contact, or that he was not able to contact Wong, or any of Wong’s family members including Ho.  

86.  It appeared from P’s 1^st Statement that at the time he made his Small House Application in or about 1974 or 1975, he had attended the District Office twice and that on the 1^st occasion, he had presented his HKID card to sign some documents and that his written evidence was that  it was there at the District Office he met Ho for the first time[62].  However, his evidence during the trial was that he went with Wong and Ho to the District Office, which was again inconsistent with P’s written evidence.  Further, as P’s evidence was that the Loan was offered to him on the same occasion when Wong had the conversation with P and the 3 Cousins in the Village in about 1974 of 1975, it would seem more likely than not that P would have met Ho before they went to the District Office on the 1^st occasion. 

87.  In any event, on the 1^st Application Letter, which was dated 7 April 1976, P had given a correspondence address at No 20A, Hoi Pong Street, Sai Kung.  This was in fact one of Ho’s addresses, as seen on the copy of the New Grant produced by Mr Li during the trial from his file[63]. 

88.  What was clear was that by the time the 1^st Application Letter was submitted, P had already entrusted all matters concerning his Small House Application to Wong and Ho.

89.  P’s written evidence was that his mother forced him to emigrate to United Kingdom as such would assist his elder brother obtain UK citizenship, but unfortunately it turned out that it did not help as his elder brother was over 21 at the time.  When asked during the trial, whether it was his plan to emigrate at the time of the 1^st Application Letter, P had denied this.  P maintained that it was only one or two months before May 1977 when someone from a travel agency contacted him to tell him that his mother had already bought him a ticket that he knew he had to move. Again, what P said did not seem to make any sense as it was not quite clear why his move would help his elder brother and in any event, he must know when he went to UK in May 1977, his elder brother was already over 21.  

90.  Further, even if P might not know when exactly he had to leave, as seen in P’s British passport numbered 172775, there was a remark “E/C applied for” written by the Director of Immigration in Hong Kong on 17 September 1975 on page 6 of that passport and there was an “Entry Certificate” valid for six(?) months[64] from the date of issue of 17 November 1976, for settlement to join father.  The remark and the “Entry Certificate” indicated that P had in fact applied for an entry certificate to join his father in London in September 1975 which was later issued in November 1976, and that P should know at least by November 1976 that he would have to leave within the deadline imposed.

91.  Anyway, if P indeed had no inkling at all in 1976 that he would be moving to London in a year’s time, then there was in fact no reason for him to entrust the Small House Application to Wong and Ho at all.  

G.2    P’s knowledge of the proposed development in the Area

92.  During the trial, P had said Wong was about a year older than him.  The evidence showed that the 3 Cousins were also more or less the same age as P[65].  It was P’s evidence that he would hang around with Wong and the 3 Cousins before he moved to London.  As can be seen from the powers of attorney executed respectively by the 3 Cousins to Ho on 25 May 1979, (i) the address of Wong Chi Ho was No 4, Tai Wan, (ii) that of Wong Kwong Ming was No 3, Tai Wan, and (iii) that of Wong Soo Kau was No 6A Tai Wan.  As seen in the 1977 London P/A, Wong’s address was given therein to be 14, Tai Wan Village although on the power of attorney dated 20 April 1979 signed in presence of Mr Li, Wong’s address was given as No 4, Tai Wan Village[66]. Further, in the Power of Attorney dated 25 June 1979 given by one Wong Chi Leung to KB Lock, the address of Wong Chi Leung was also given to be No 14, Tai Wan Village[67], ie the same as that of Wong.  Thus, Wong had given an address same as Wong Chi Ho or Wong Chi Leung at different occasions. 

93.  It would appear from P’s own evidence that P should at least also know that another of his cousin, ie Wong Kwok Man, who sent P the WKM Letter and telephoned P in 1989, had made a Small House Application at the time.  Anyway, in the power of attorney given by Wong Kwok Man to Ho on 25 May 1979, Wong Kwok Man’s address was given as No 6, Tai Wan.  As seen in the Lot Index Plan, the Village is not a big village and all these cousins lived not far from each other in the Village.

94.  Even though P had tried to clarify that he did not have actual knowledge that there should be 10 other villagers making the Small House Applications at the time as he did[68], and that it had only “indirectly occurred” to him that there should be 10 other villagers making the Small House Applications as the Area should be able to provide more than 10 lots, what seemed clear was that first of all P was aware of the Area being the proposed development site, and secondly, P should be aware that in addition to himself, at least 5 or 6 of his cousins in the Village had applied, namely the 3 Cousins, Wong and probably also Wong Chi Leung who was of the same address of Wong, and also Wong Kwok Man. 

95.  In any event, in my view, it appears from P’s evidence that he was trying to play down his knowledge of the proposed development of the Area.

G.3    P’s address in Hong Kong

96.  I have to say I find P’s evidence confusing and inconsistent as to where or which house he was living in the Village before his move to London, and where he would stay when he came back to Hong Kong for a visit.

97.  In P’s 1^st Affirmation, P had said between early 1970s to late 1970s, after all his siblings had moved to London, he and his grandmother were left living in two Small Houses owned by his family.  In his 1^st Statement, P had said he and his grandmother and a cousin lived in 1A of Tai Wan Village, and No 2 Tai Wan Village was just next door, and he had also said there was no one living at No 2, Tai Wan.  P actually never made clear in his witness statements as to how often he returned to Hong Kong after his emigration to London.  It was not until Annex A (which sets out P’s dates of entry and departure from Hong Kong in his passport/s) was attached to Mr Chan’s Closing Submissions (“Annex A”) that this was made clear to this Court.

98.  P had mentioned in his 1^st Statement that as he did not ordinarily reside in Hong Kong, he seldom visited the Land, and he also mentioned that when he returned to Hong Kong on holiday, he had gone to visit his relatives living in the Village[69].  During the trial, when asked by this Court where he would stay when he returned to Hong Kong, he had answered in hotels and he had also mentioned No 2B, Tai Wan.

99.  However, when P was referred to the Lot Index Plan dated 30 December 2011 attached to his statement of claim during cross-examination, P had confirmed that his house was on Lot 721, which appeared to be No 1A and not 2B. 

100.  In P’s 1^st Statement, he had said he was living in 1A, Tai Wan Village, and that when he was still living in Hong Kong, there were mails delivered to his residence and he said most of them were for his father.  His evidence was that as he did not usually stay at home, his grandmother, who spent most of her time at home, would collect the mails and put them on the window sill in the sitting room and that sometimes he would go and check if there were any mails for him.  P had mentioned that there were sometimes mail delivered to No 2, Tai Wan Village, and similarly, most were for his father, and that although there was no one living at No 2, Tai Wan Village, his grandmother would also collect mail delivered there and put them next to the telephone at their home.  According to P, after he left Hong Kong, “they” did not mention there was any letter for him, and that before the commencement of this action, when he returned to Hong Kong on holiday, he occasionally checked the mails next to the telephone but did not find there was any letter for him[70].

101.  During the trial, P had admitted that all the information stated in the Undertaking concerning him was correct except that the signature thereon was not in fact his signature.  This would mean that he admitted that as stated in the Undertaking, he was residing at No 2, Tai Wan. 

102.  As seen above, P’s evidence as to which house he was living in the Village was confusing and inconsistent.  By first stating in his 1^st Affirmation that he was living in two houses and then by stating in his 1^st Statement that he was only living in No 1A , Tai Wan Village and that he did not usually stay at home and that there was no one living in No 2, Tai Wan, and further by giving a detailed description in his 1^st Statement of how and where his grandmother would place any letters sent to No 1A or No 2, and later by mentioning that he was living at No 2B during the trial, all this gave this Court an impression that P was being evasive as to where he was actually living before his move to London and where he was actually staying when he returned to Hong Kong for holidays.  Further, the impression he gave was that he was trying to offer an explanation as to why the letters sent by the District Office to No 2 Tai Wan Village had not been received by him.  

103.  On P’s own evidence, when he left Hong Kong, his grandmother and a cousin (whom during the trial he then said was a female cousin) were living in the house where he was living, and later his mother had also moved back to live in the house with his grandmother in about 1978 and that by end of 2011, his mother was still living in the Village (as his mother gave him the Note).

104.  Between 5 May 1980 until 20 March 1982, there had been at least 2 letters in relation to the Extensions of the Deadline sent by the District Office to P at No 2, Tai Wan, namely on 5 May 1980 and 18 March 1981 (“Extension Letters”)[71] and 2 other reminder letters of 5 August 1980 and 20 March 1982 regarding the commencement of building works on the Land[72], again sent by the District Office to P at No 2, Tai Wan Village. 

105.  It appeared that each of the Extension Letters had required P to countersign on a duplicate copy thereon to signify his acceptance of the terms for the Extension and to return the same to the District Office together with a receipted Demand Note for the fine imposed by the District Office for the Extension.  The fact that the Government had not exercised its right of re-entry under the Conditions of the New Grant would indicate that someone must have obtained the duplicate copies of the Extension Letters and the Demand Notes in order to countersign on the duplicate copies and paid the requisite fine on P’s behalf or in P’s name.

106.  Letters sent by the Government would usually be contained in Government envelopes, and in any event, even though P was not in Hong Kong, I find it inherently improbable that P’s mother or grandmother or cousin, or no one in P’s family had ever notified P in relation to the receipt of those Government letters, I do not find it credible that P had no knowledge of any letters sent to him at No 2, Tai Wan Village by the Government concerning the Land/New Grant. 

G.4    Whether P had signed the 2^nd Application Letter

107.  During the trial, when P was shown a letter dated 23 September 1976 from the District Office (“23.09.76 Letter”)[73], which was the reply letter to P’s 1^st Application Letter informing P that his application for his 1^st chosen site was not approved, P claimed that he could not read English and did not know about the 23.09.76 Letter, and later he had also said he could not recall that letter.  When he was asked about the result after he sent the 1^st Application Letter, P again said he could not recall.  When further pressed, P said he could not recall whether he had to choose another piece of land and to make another application again, and that he only knew when he received a letter from Wong at end of 1977 that a piece of land was granted to him by the District Office and that he had to sign a power of attorney for Wong to go and get the piece of land.

108.  The 23.09.76 Letter was in fact an English translation of a Chinese letter enclosed thereto.  It was not clear which address it was sent to but it was clearly addressed to P, and it was produced by P as part of his documents obtained from the District Office. In the 23.09.76 Letter, the District Officer referred to P’s application and informed P that his chosen site was not acceptable because it fell within the previously proposed village extension area which had been disapproved because of its close distance to the main road and P was requested to choose another site for the consideration of the District Office should he intend to proceed with the application.

109.  The Area is on a slope and one of the technical problems faced by the developer was the site formation and the building of an access road to the Area from the main road, which would seem to indicate that the Area was not close to the main road and/or it was not the first chosen site referred to in the 23.09.76 Letter.

110.  In any event, the 23.09.76 Letter was only about 5 months after the 1^st Application Letter.  According to P, he was not yet aware of the fact that he would be moving to London.  As mentioned earlier, P was at that time on good terms with Wong and that P would hang around with Wong and the 3 Cousins in the Village. If the first site chosen by P was rejected by the District Office, this would mean similarly the first site/s chosen by the 3 Cousins and Wong were also rejected and that all of them would then have to make a 2^nd application for another site.  It did not seem probable that P did not know about this.  Further, as seen in P’s 1^st Statement, on his own evidence, P was clearly aware that the Area was to be the site for the development.  

111.  Having considered all the above, I find that P’s answers, that he did not know or did not recall about the 23.09.76 Letter or about his first chosen site not being approved, evasive.

112.  According to P’s written evidence, he had attended the District Office on two occasions, the 1^st being the occasion he went with Wong and Ho and that he had presented his HKID card to sign some documents and the 2^nd occasion was after he submitted his application, when the District Office had arranged an interview with him in which he confirmed that he would be the person occupying the land[74].  Thus, P had physically attended the District Office for an interview after submitting the 1^st Application Letter to confirm that that he was the person to occupy the land to be granted to him.  P must have known that this was part of the procedure, or that the procedure would involve an interview at the District Office after the Small House Application was submitted.

113.  As mentioned earlier, P denied that he had already planned to move to London at the time when he sent his 1^st Application Letter and P also admitted that even though he then had to move to London, he had maintained his intention to apply for land to build a Small House, and that after he left in May 1977 and between May 1977 to October 1977 when the New Grant was issued, he knew that Ho was making the application on his behalf.  It was also clear that at the time P continued to be in close contact with Wong, who wrote to P in October 1977 to ask P to attend the Liaison Office in London to sign the 1977 London P/A.

114.  Having considered the then circumstances, there was no reason as to why after P’s 1^st Small House Application was rejected, Wong and Ho could not have simply approached P and asked him to make a 2^nd application and yet would choose to forge P’s signature instead on the 2^nd Application Letter secretly without P’s knowledge or authorisation or consent.

115.  As for the Undertaking, as said earlier during the trial, P had confirmed that all the information therein was correct, even though he had said that the names of his father, grandfather and great grandfather could be obtained from the clan records. Thus, P had confirmed that both his HKID card and the passport number stated on the Undertaking were correct.  In fact, P’s passport numbered “172775”, was, as mentioned earlier, his British passport issued on 28 March 1972 and the number of this passport must have been provided by P to Wong and Ho at the time.  

116.  Further, it did not seem probable that the alleged imposter was only required to produce to the District Officer photocopies of P’s HKID card and P’s passport 172775 for verification of identity at the time of signing the Undertaking, or that the District Officer would not ask to see the original of either of the identification documents. 

117.  In any event, having considered all the above, even if P did not actually sign on the 2^nd Application Letter or personally appear before the District Office to sign the Undertaking, I find it more probable than not that he was fully aware of the necessary procedures for the Small House Application, and had authorised or consented to either Wong or Ho or someone to sign in his name and he must have had knowledge to the Undertaking being signed in his name. 

G.5    The Loan

118.  In P’s 1^st Affirmation, there was no mention by P of the Loan.  In fact, P made no mention of the Loan in his Statement of Claim filed on 5 July 2013 nor in his Reply and Defence to Counterclaim dated 3 September 2013 (filed on 11 September 2013).  It was only in his Reply to D2’s Defence to P’s Counterclaim to Counterclaim dated 26 February 2014 (filed on 8 April 2014) that the Loan was pleaded[75].

119.  In his 1^st Statement, P had said that he had forgotten about the Loan as the amount involved was insignificant. 

120.  According to the New Grant, the premium was HKD 1,760 and the annual rental of the Land was HKD 20[76] and the grantee was to complete building the Small House prior to the Deadline and was to expend thereon a sum of not less than HKD 15,000 excluding site formation, foundation, access roads and other ancillary works.  This was in October 1977.

121.  The premium of HKD 1,760 was a concessionary premium.  The value of the Land, as a bare site and less the premium was HKD 143,066 as at 18 December 1979, according to the Valuation Report, and the construction cost of a hypothetical Small House on the Land would be in the sum of HKD 230,000[77].

122.  During the trial, P had admitted that he knew if his Small House Application was approved, there would be a deadline stipulated for the building of the Small House, and that he understood that he had to build the Small House once the land was granted to him.  P had also admitted that at the time of executing the 1977 London P/A, he did not know the exact amount of premium that had to be paid for the issue of the New Grant, namely he did not know that it was going to be HKD 1,760.

123.  When it was put to P during the trial that he had no money to pay the Government for the premium, P however disagreed and said it was Ho who offered to help him and to lend him the money.  P then went on to say that at the time he would definitely have HKD 1,000 odd but he was in United Kingdom at the time, and he then asked rhetorically how could he pay.

124.  The fact was that, as seen in Annex A, P did return to Hong Kong on 21 March 1979 and was in Hong Kong over 7 or 8 months.  By 2013, P might have forgotten about the Loan but in March 1979, the matter should have been still fresh in his mind in particular when he knew about the issue of the New Grant about 18 months earlier.  If there had been the Loan, there was no reason why he could not repay then if he said he definitely had the money.  

125.  On his own evidence, the Loan was to pay for the premium for the grant of the Land, the amount of which was unknown to P, and that the Loan was without any security or loan agreement, and that P had never repaid the Loan.  When asked what benefit Ho would receive in return for the Loan, P’s explanation in his 1^st Statement was that Ho would have a first right to buy the Land in case P was to sell the Small House on completion.  However, it was also P’s evidence during the trial that he did not have any intention to sell the Small House built thereon.    

126.  When pressed during cross-examination during the trial as to what benefits Wong and Ho would obtain by handling all the applications to obtain the Land for P, and by Ho advancing the Loan, P became evasive and then said that Ho would build the Small House and also to pay for the construction costs for him, and that Ho could earn a profit as a building contractor.  P was not able to say what the construction costs would be, nor what profit Ho would make as a building contractor.  In any event, his answer would clearly indicate that he was aware that Ho would be building a Small House on P’s land once a new grant was issued by the District Office to P, and this was not really consistent with P’s written evidence. 

127.  Anyway, it did not make sense as to why Ho would firstly handle all the application procedures for P, secondly make the Loan to P for the premium and thirdly pay for the construction costs to build P’s Small House, without any security, or without anything in writing in relation to any first option to buy, and without any repayment of the Loan and/or construction costs from P, namely without any benefit at all. 

128.  There was in fact no evidence that P had ever tried to repay the Loan.  Even if due to the close relationship between Wong and P, and Wong and Ho, on P’s own evidence, by early 1980s, the contact between P and Wong’s family had ceased, and there was no reason why Ho would not have pursued P for repayment of the Loan, or for payment of any construction costs.

129.  Having considered P’s own evidence, I do not find what he said was credible. Mr Chan had complained that D2 had not challenged P’s pleading and evidence that there was the Loan, nor was it put to P during cross-examination that the premium was not paid by the Loan.  Notwithstanding this, I find on P’s own evidence, he was not able to satisfy this Court that there was the Loan in the first place, or that the premium was paid from the Loan or any loan.  I find there was no sufficient evidence of the Loan or any loan.  In any event, I do not find it inherently probable that Ho would have agreed to make a loan to P to pay for the premium, on an interest-free basis, without any repayment terms, security, or any written acknowledgment and would further agree to pay for the construction costs for some unknown benefit.

G.6    The 1977 London P/A

130.  P’s evidence was that he did not know the contents and effect of the 1977 London P/A which he signed at the Hong Kong Government Office in London.  It was also his allegation that a Hong Kong Government Officer at the Office told him that the 1977 London P/A would only be valid for one year and could be used only once.  However, as stated in the document, the period was to be “from 19 October 1977 until further notice”.  It was clear from the document that it was possible to have typed in an expiration date, and yet the words typed in was “further notice”, and the words “the …. day of…. inclusive” were deleted, and in the margin next to the deletion, P had countersigned his full name, together with the initial of probably the witness, who was one Mr Arthur M T Wong, the then Liaison Officer at the Hong Kong Government Office in London. 

131.  Even though there was no interpretation clause, I do not find it probable that a Hong Kong Government Liaison Officer would have told P something which was contradictory to the express contents of the document.  There was no provision that the 1977 London P/A was to be used only once or for the validity of only 12 months.  Again, I do not find P’s evidence in relation to the 1977 London P/A credible or inherently probable.

G.7    P’s knowledge of the completed development

132.  As said earlier, in his written evidence, P never made it clear as to how often he had visited Hong Kong and/or the Village after his emigration to London and between May 1977 and December 2008.  As seen in Annex A, between 7 May 1977 and 25 December 2006, P in fact made some 10 visits to Hong Kong, the first trip being on 21 March 1979[78], and there was no exit chop until 7 November 1979, which meant he had stayed in Hong Kong some 7 or 8 months on that occasion.  Although since then he only returned to Hong Kong 3 times during a period of some 19 years between 1980 and mid December 1998, thereafter he had returned much more frequently, namely during a period of some 8 years from 16 December 1998 onwards until 25 December 2006, he had returned to Hong Kong 6 times, for periods varying from about 6 days to 21 days.   

133.  P admitted that the Area was very close to his house and on the slope directly behind his house.  P said in his 1^st Statement that it was when he visited Hong Kong in or about 2000 that he first became aware of a row of buildings in the Area including a Small House on the Land, and he thought the Government must have granted the Land to another grantee[79]. When cross examined during the trial, he then said he saw the row of houses in the Area when he returned for a visit in 1997. As it turned out that there was no entry chop in his passport for 1997.  He then corrected himself and said that it was during the trip when he returned to Hong Kong in December 1998. According to the entry chop in his passport, he returned to Hong Kong on 16 December 1998, staying for 21 days until 6 January 1999.  Since the Certificate of Compliance was issued on 25 November 1998, P must have noticed the brand new row of Small Houses in the Area when he returned to the Village during that trip.

134.  Notwithstanding his written evidence that he became aware of a Small House on the Land, during cross-examination, P then said that although he saw the new Small Houses in the Area, he did not know the exact location of the Land until a much later stage. However, as said earlier, he returned to Hong Kong in March 1979 for some 7 or 8 months, and this visit was only about 17 months after the New Grant.  It seems to this Court improbable that P would not even bother to find out the exact location of the Land during that trip or during any trips thereafter, that is if he considered that he had any interest in the Land.  

135.  Further, also as said earlier and as seen in his 1^st Statement, he knew the Area was the site, which was capable of accommodating over 10 lots and that his Small House Application was for one of those lots.  Even if he did not know the exact location of the Land, namely which was exactly his lot among those 10 odd lots in the Area, he knew the Lot number and the DD number which was stated in the schedule in the 1977 London P/A, and he could easily have found out the exact location of the Land.  

136.  Although P had said he and Wong did not have any contact after the “severe conflict”, there was no mention of him not having any contact with the 3 Cousins.  P’s assertion that he thought the Land must have been re-entered by the Government was inconsistent with the fact that his cousin Wong Kwok Man had sent him the WKM Letter in June 1989 and had further telephoned him followed by another telephone call from Mr Lau, as mentioned earlier.  P had in fact admitted under cross examination that he knew that the Land was still registered in his name in 1989.  As said, the details of the Land were clearly stated in the schedule in the 1977 London P/A.  Yet, P took no step to find out what had happened to the Land until 2008 even though he had returned regularly to Hong Kong and that his own evidence was that when he returned to Hong Kong on holiday, he had visited his relatives (including presumably his mother) in the Village.

137.  I have to say I do not find that what P said that he believed the Government had re-entered the land credible.

G.8    Conclusion

138.  It is my finding that P’s own evidence was generally evasive and was full of inconsistencies and inherent improbabilities.

139.  During the trial, P disclosed that in 1975, he was already working and that he stopped studying after the first term of Form 3.  This would mean he started working probably around the age of 16 of 17.  What is clear is that in 1975, P should be around 18/19.  When P sent his 1^st Application Letter, he was already 19 years and 9 months old and he should no longer be an immature or naive student. On his own evidence, he was fully aware of his rights as an indigenous villager to apply for land to build a Small House and as said earlier, he was aware of the procedures involved.  He was also fully aware of there being premium and construction costs payable and there was no evidence at all that he had sufficient funds on his own for meeting such costs, nor indeed any sufficient evidence that he had any intention of meeting any costs/expenses of the Land or of the construction of the Small House at the time.  He had been back to Hong Kong regularly during the 30 odd years after the New Grant in October 1977 and 2008, albeit less frequent between 1979 and 2008, and on his evidence when he returned for holiday, he had visited the Village or his relatives in the Village. 

140.  In short, having regard to all said above, and further from what is further set out hereinafter in this judgment, I do not find P a credible or reliable witness.  

H.     Issue 1 - The 1979 P/A Issue

141.  Mr Li was the solicitor who attested P’s signature on the 1979 P/A.  As mentioned earlier, leave was given to D2 to file Mr L’s evidence, as contained in Mr Li’s affidavit sworn on 29 May 2020 (“Li Affidavit”).  As seen in the Reasons handed down by this Court, P’s own solicitors had tried to contact Mr Li’s firm as early as October 2008 to seek the original 1979 P/A, and later D2’s solicitors had also tried to seek information from Mr Li in April 2017.  Suffice to say, Mr Li had originally thought that his firm’s file concerning P and the Land (“P’s File”) had been destroyed. 

142.  Eventually, it was not until 6 March 2020 when D2’s solicitors wrote again to Mr Li and when Mr Li asked his staff to go through his firm’s computer records, Mr Li then found there was a box containing documents retained from P’s file (“P’s File”) at time when the rest of the file was destroyed.  P’s File, namely with P being the client, bore a date of opening on 2 January 1979.  Mr Li then went personally to his firm’s storage godown and eventually discovered the box containing 6 documents retained from P’s File:

(1)  The New Grant No 6201;

(2)  A letter (undated) in duplicate to the District Office signed by P and Wong for cancellation of trusteeship letter to the District Office (“Cancellation Letter”);

(3)  The 1979 P/A;

(4)  The 19.12.79 Development Agreement;

(5)  The 1980 Substitute P/A;

(6)  A letter dated 29 October 1986 from Messrs Foo & Li transferring, amongst others, P’s case to another firm of solicitors Messrs Maurice Lee & Co.

143.  Mr Li’s evidence was that according to their file records, there were 6 files opened at the same time, respectively of 6 registered title holders of lots in DD216 (“Landowners”), namely that of Wong Kwok Man (Lot 771), Wong Soo Kau (Lot 774), Wong Kwong Ming (Lot 776)[80], P ( Lot 775), Wong Chi Leung (Lot 780), and Wong Chi Ho (Lot 781).

144.  Mr Li said he had made searches in the Land Registry on the above 6 lots, and that the land searches and the retained documents in his file had assisted him in his recollection of the subject matter of the 1979 P/A and the events that happened in connection with P and the Land. 

145.  At the time and prior to opening of P’s File , according to Mr Li, he had known a Mr Tam Chak Lam (“Mr Tam”) socially for many years, and that sometime between September 1978 and December 1978, Mr Tam had attended his office with Wong and that Wong as trustees of the Landowners of Lots 771, 774, 776 and 781 had signed development agreements respectively with 4 of Mr Tam’s companies (“Tam Companies”) and that Wong had given each of those 4 Tam Companies an irrevocable power of attorney to carry out the development on the lots.  Mr Li was informed that Mr Tam intended to discontinue with the development and that Ho would become the attorney instead.

146.  Sometime later in December 1978, Mr Tam and Ho attended Mr Li’s firm and Mr Li was informed that irrevocable powers of attorney would be given to Ho by the 6 Landowners but the developer would be another company called Honoo.  As a result, the 6 files referred to earlier were then opened and Mr Li’s instructions were to prepare a set of 4 documents for each of the 6 Landowners, namely:

(1)  A letter to the District Office for cancellation of trusteeship of Wong for each of the 6 Landowners concerned, namely the Cancellation Letter;

(2)  A deed of revocation of power of attorney previously given by the respective Landowners to the Tam Companies;

(3)  An irrevocable power of attorney given by each of the 6 Landowners to Ho;

(4)  a development agreement between each of the 6 Landowners and the new developer Honoo

147.  It was Mr Li’s evidence that after preparation of the above documents, they were signed by the parties thereto in his office.  He could not recall the exact date or dates when the 6 Landowners called at his office to sign the documents and whether they all came together or by groups or individually, but that he believed that they would have come to sign between April 1979 and June 1979, and he was sure they had come with Wong, and that all the 6 Landowners (including P) and Wong did come to his office to sign the documents.  Mr Li also said he could not recall whether Ho came together with the Landowners and Wong to sign the documents, and believed that he might not have come together with the Landowners but instead he had come with KB Lock, the director of Honoo, to sign the relevant new development agreements.

148.  It was Mr Li’s belief that the powers of attorney and other documents signed by the Landowners were not dated at the time of signing by the Landowners and that  they were all signed in escrow pending the signing of the development agreements by Ho and KB Lock of Honoo and receipt of the money by Ho from Honoo thereunder, and that when Ho and KB Lock came to sign the development agreement of the lot, the related power of attorney would be dated one day before the date of signing of the development agreement.

149.  In short, Mr Li’s evidence was that P came to his office with Wong to sign the set of 4 documents including the Cancellation Letter in duplicate and the 1979 P/A sometime between April 1979 and June 1979 and that Ho and KB Lock went to his office to sign the 19.12.79 Development Agreement on 19 December 1979 and that was why the 1979 P/A was only dated the day before, namely 18 December 1979.

150.  Mr Li had also said that it was the common practice at that time to put a chop under the signature of the party signing bearing the words “Holder of Hong Kong Identity Card No ________” (“Identification Chop”) or to write the words “Holder of ______ Passport No ________”.  He said he must have left it to his conveyancing clerk to put an Identification Chop and/or to enter P’s identity card or passport details and that his clerk had forgotten to do so.

151.  Mr Li had referred to Lot 781 of which the Landowner was Wong Chi Ho.  Mr Li had produced a copy of the power of attorney signed by Wong Chi Ho in his presence but also without the Identification Chop or any handwritten words of passport number.  Mr Li said there was no problem with the power of attorney signed by Wong Chi Ho, which he later revoked with the consent of Ho by a deed of revocation prepared by the then Messrs Johnson, Stokes and Master.

152.  Mr Li also explained that although the Cancellation Letter was prepared for P and was signed by both P and Wong in duplicate, as Lot 775 (ie the Land) was registered in P’s own name and there was no trusteeship for P, there was no need for the original signed Cancellation Letter to be despatched so both the signed original and the signed carbon/duplicate copy were left undated and kept in P’s File.  Further, as seen in the contents of the Cancellation Letter, Mr Li believed that at the time he must have obtained from P a copy of his birth certificate and also his HKID card to be enclosed with the Cancellation Letter for dispatch therewith.

153.  Mr Li said he also believed that he may have seen a copy of P’s then passport and that he had asked P to sign the 1979 P/A and the Cancellation Letter with the same English signature as the one on his passport, and that he might also have made a copy of P’s passport for P’s File at the time.

154.  Finally, Mr Li confirmed in the Li Affidavit that although he was provided by P’s present solicitor with copies of the statements P made to the police, in so far as he could recall, he had never been contacted by the police regarding any complaint made by P.  Mr Li further confirmed that neither his firm nor himself had received any enquiry or complaint from P himself regarding or alleging any forgery of the 1979 P/A.

155.  As seen in the case of Nina Kung v Wang Din Shin (2005) 8 HKCFAR 387, the courts generally prefer the direct evidence of witnesses who actually saw and heard what happened to the opinion evidence of an expert and this is especially so in the case of handwriting evidence because of the nature of such evidence[81], and that handwriting evidence is of a lower order of cogency than direct evidence of execution[82].  As Chan PJ had also said in the Nina Kung case: “There are decided cases in which despite clear evidence from experts to the effect that the handwriting in question was forged, the court refused to accept it but favoured other pieces of direct evidence”[83].

156.  Mr Chan argued that in the present case, the nature and character of Mr Li’s evidence was entirely different from that considered in the Nina Kung case.  In that case, the witness who signed as a witness in the contested will was a manservant who had worked for the Wang couple for 7 years and who had given a statement for the trial that he had witnessed Mr Wang signing on the contested will and that in that context, it was little surprise that the CFA said that the central question was the reliability of the testimony of such a witness.  Mr Chan submitted that in the present case, unlike the manservant in the Nina Kung case, Mr Li is a professional who must have attested countless documents over the course of his career and this meant that he could not possibly have any independent recollection of the events or the identity of the person purporting to sign as P, and that Mr Li had admitted that the time when P purportedly went to sign the 1979 P/A between April to June 1979 was the only time he ever saw the person signing as P, and that Mr Li had never seen P before, and never saw P again since.  Further, Mr Li gave his evidence from inferring from the documents and what he believed to be his “usual practice” rather than from any independent recollection.

157.  Mr Chan submitted that Mr Li’s logic and inference was flawed in a number of respects set out in his Closing Submissions[84], in particular there was no Identification Chop, and no written words or indication as to the kind of identification document and number thereof used to verify the identify of the person who executed the 1979 P/A, and further there were no copies of any identification documents kept in the file and that it was unlikely that when sorting through files for destruction that the Mr Li’s staff would deliberately single out identity documents for destruction.

158.  Mr Li is now aged 78. and he is still in active general practice as a partner of his firm.   He readily admitted that he reconstructed events from those documents retrieved by him from the box of documents retained form P’s File and from documents he obtained from land searches in the land Registry.  He explained that he had known Mr Tam for 2 or 3 years before P’s File was opened and that Mr Tam was a good friend of a Mr Lau Man Cheung who was one of Mr Li’s father’s acquaintances, and that the 3 of them used to go out to socialise together.  Mr Li said he continued to be in contact with Mr Tam and Mr Lau Man Cheung until they passed away respectively.

159.  Mr Li said Mr Tam and Wong came to his office a few months after his firm Messrs Foo & Li was established on 28 August 1978, and as mentioned earlier, Mr Tam had told him that he wanted to withdraw from the proposed development and that Ho was to replace him, and Mr Li said he in fact recalled he was a little amused by Ho’s Chinese name at the time.

160.  Mr Li confirmed that the instructions were given on behalf of the 6 Landowners by Wong and he believed that the 6 Landowners came to his office only once to sign the documents and that they came with Wong, as 4 of them had to sign their consent to cancel Wong’s trusteeship and they must have come with Wong and as 3 of the Cancellation Letters were registered on 4 April 1979, those 3 Landowners must have come with Wong before that date.  He said the 6 Landowners had come in at least 2 groups, (i) one group consisting of Lot 771, 774, 776 in April 1979 and (ii) one group consisting of Lots 780 and 781 in June 1979 and that he believed P came with either the 1^st or the 2^nd group, and thus P must have gone to his office between April and June 1979.

161.  For the (i) group, Wong was the trustee for each of those Landowners, namely Wong Kwok Man, Wong Soo Kau and Wong Kwong Ming, in entering into a power of attorney in favour of one of the Tam Companies in January 1978, which would indicate that those 3 Landowners were under 21 years old when they entered into those powers of attorney.  Each of those 3 Landowners then executed an irrevocable power of attorney to Ho on 25 May 1979.  However, since the “Removal of Trusteeship” was registered in the case of Wong Soo Kau and Wong Kwong Ming on 20 April 1979, as Mr Li had said, it would appear more probable than not that those 3 Landowners had signed their respective set of 4 documents on or prior to 20 April 1979.

162.  As for the (ii) group, there was no trusteeship for Wong Chi Leung, and he had executed a power of attorney direct to KB Lock on 25 June 1979, and for Wong Chi Ho, he had executed his power of attorney direct to Ho on 26 June 1979, but the “Removal of Trusteeship” in Wong Chi Ho’s case was registered on 25 June 1979, as said by Mr Li, it would appear probable that those 2 Landowners would have signed on their respective set of 4 Documents on or prior to 25 June 1979.

163.  As pointed out by Mr Li, the development agreements with Honoo (signed by KB Lock) for (i) group were signed on 26 May 1979 and those for (ii) group were signed a month later on about 26 June 1979.

164.  Mr Li had explained his practice was to date the relevant power of attorney one day prior to the date of the signing of the development agreement.

165.  When asked whether it was possible that P attended Mr Li’s office later that year, Mr Li maintained that he believed that all the 6 Landowners in the 6 cases signed their respective set of the 4 documents before KB Lock attended Mr Li’s office in June 1979 to sign the development agreements, and that he believed that all the 6 cases should have been “wrapped up” before KB Lock went to his office.

166.  Mr Li further confirmed during the trial that all the attestation and interpretation were done by him personally as he had to ensure that the persons signing the documents had understood the contents of the documents. 

167.  Mr Li also said during the trial that although he had no independent recollection, from his practice, he would have seen documents of identification of the signing person and that it was a practice he had maintained until the present.  He was adamant that that he would have verified P’s identity at the time of signing and that he believed P had produced his HKID card and his passport for verification of identity.  As mentioned earlier, Mr Li believed that he was shown P’s passport and that he had asked P to sign according to his signature on P’s passport.  Mr Li said he would not have asked P to produce his birth certificate for identification purpose.  Mr Li corrected what he had said in the Li Affidavit, in which he had said that at the time he must have obtained from P a copy of his birth certificate and HKID card to be enclosed in the Cancellation Letter, as the letter said “birth certificate/HKID”, namely either one or the other, and during the trial Mr Li said the reference to “birth certificate” should have been deleted.  He further explained that the purpose of the birth certificate/HKID to be attached to the Cancellation Letter was to show the District Office that the Landowner was then over 21 years of age.

168.  Mr Chan had criticised Mr Li of giving confused evidence over whether what he said about whether a copy of the birth certificate was necessary.  In my view, his evidence was clearly that it was not necessary nor required for the purpose of identifying/verifying the identity of the signing person, but that either the HKID card or the birth certificate would be required for the Cancellation Letter to prove that the person concerned had by then reached the age of majority.  I do not find that Mr Li was confused or that he gave confusing evidence over this matter.

169.  According to Mr Li, the date of “Completion” was the date of the development agreement and that that would be the date that money had to be paid under the agreement, and that the power of attorney would be dated the date prior to completion.  He had explained that if the power of attorney was dated too early, after 12 months, one had to make a statutory declaration that it had not been revoked, and that was why he would try to date the power of attorney as close to the completion date as possible.  However later, when asked again, Mr Li accepted that that as the powers of attorney were all expressed to be “irrevocable”, even after 12 months no statutory declarations would be required, but Mr Li maintained that it was his practice to date the power of attorney concerned as close to the related development agreement as possible, as in fact seen in all the other 5 cases.

170.  Mr Li further pointed out that out of the 6 cases, 5 Landowners had later through another firm of solicitors revoked their powers of attorney to Ho and/or KB Lock by consent, which indicated that those 5 Landowners had all honoured their powers of attorney and none of the 5 had any problems with their powers of attorney given to Ho and/or KB Lock or had challenged authenticity, and that P’s case was the only exception in which the authenticity of the 1979 P/A was challenged. 

171.  Mr Li had further explained that the 1979 P/A was signed in escrow and later dated in December 1979 instead of May or June 1979 like the other 5 was probably because money for P’s lot, ie the Land, only arrived on around 19 December 1979, when Ho would have signed the 1979 Development Agreement, pointing out the receipt clause in the agreement. 

172.  Mr Li was told by D2’s solicitors in their 1^st letter to him on 25 April 2017[85] that P was challenging the authenticity of the 1979 P/A and there was a follow up telephone conversation between D2’s solicitor and Mr Li who at that time had doubted whether the relevant file could be located.  D2’s solicitors did not write again until 7 March 2020 in which they had written again and provided a copy of P’s passport to Mr Li to help him to recall/locate the file. 

173.  Mr Chan submitted that it would not be surprising, whether consciously or unconsciously, that Mr Li would not lightly believe that he was deceived by an imposter, but an imposter had already deceived an officer at the District Office at the time of signing the Undertaking.  However, when it was suggested to Mr Li that P never attended his office, Mr Li was adamant that this could not have happened as he would not have allowed an imposter to sign, as this would have been a breach of his professional oath, namely of allowing someone to sign without proper verification of identity.  Mr Li maintained that he had witnessed P signing on the 1979 P/A and had checked the identification documents.

174.  As pointed out by Mr Li, P did not just sign the 1979 P/A but also both the original and duplicate copy of the Cancellation Letter on the same occasion when he went to Mr Li’s office with Wong, although as there was no trustee appointed by P, there was therefore no need to submit the Cancellation Letter to the District Office and that was why both originally signed copies were retained in P’s File.  In fact, during the trial, Mr Li had produced both the signed original and the signed carbon duplicate copy of the Cancellation Letter[86].  

175.  Mr Li had further explained that he did not think that an imposter could have signed the 1979 P/A.  He had explained that the transactions were simple, and that one villager would know what the other villager/s was/were doing, and there was no secret in the village, and that 6 Landowners all knew each other. 

176.  Although Mr Li only saw P once at the time of signing, and that the method of identification was not written on the 1979 P/A, nor was the Identification Chop applied, as said earlier, he was adamant that he had verified P’s identity.  It was unfortunate that the method of identification or identification document was not stated on 1979 P/A but this also was the case in the power of attorney signed by Wong Chi Ho as mentioned earlier. 

177.  I have to say, notwithstanding Mr Li’s age, his evidence under cross examination was succinct and direct.  The fact that he was willing to go to his firm’s godown to personally look for the box of documents also showed that he is a responsible and a cautious solicitor.  Having heard Mr Li’s explanation, I accept that the omission of the Identification Chop or the identification document on the 1979 P/A was more probable than not an inadvertent omission of his clerk.

178.  I accept that some 41 years had passed since the 1979 P/A was executed, but I find Mr Li’s evidence, even though such was based on his inference and recollection from documents, was logical and credible.  I am prepared to accept Mr Li’s evidence that he had verified the identity of the person who signed the 1979 P/A by HKID card and by passport and he had asked the person to sign the 1979 P/A using the same English signature on his passport.

179.  As I have said earlier, Mr Sperry was not given a chance to examine P’s original and contemporaneous English signatures on the Cancellation Letter, nor did he examine P’s alleged contemporaneous signature on the original Memorial 97045 at the Land Registry.  In any event, as said earlier, I am of the view that Mr Sperry’s opinion was far from cogent.

180.  In fact, I note that when P’s solicitors first wrote to Mr Li on 23 September 2008, notwithstanding that by then P knew that there was a copy of the 1979 P/A purportedly signed by him registered in the Land Registry, P never made it clear or made it known to Mr Li his allegation was that he had never executed the 1979 P/A or signed on the Memorial 97045 as he was then not in Hong Kong.  All P’s solicitors stated in their said letter to Mr Li was that from their land search, it transpired that there was the 1979 P/A registered by Memorial 97045 but the copy registered was not a complete photocopy and they asked Mr Li to furnish them with a complete certified true copy of the 1979 P/A[87].

181.  Mr Li’s firm then replied to state that the copy of the 1979 P/A was a complete copy, and that it was the practice of the Land Registry at the material time that the parties had to sign on the Memorial with a copy of the document annexed for registration, and that as the 1979 P/A was made over 15 years ago, it was deemed to have been duly executed without further proof[88]. Mr Li’s reply indicated that he thought it was a requisition raised in conveyancing transaction.   

182.  On 20 October 2008, P’s solicitors wrote and complained  again that the copy of the 1979 P/A was not complete as it did not contain or reproduce signatures of P and Ho, and further it did not show the ways or means by which P and Ho were identified[89].    

183.  However, it can be seen clearly on the copy of the 1979 P/A registered together with the Memorial 97045 that the copy bore the words “Sd. Koon Wah Wong” and “Sd Wong”. Yet, even in his solicitors’ 2^nd letter, it was not made clear to Mr Li P’s allegation that the 1979 P/A was forged or signed by an imposter, nor did P’s solicitors make it clear to Mr Li why they were seeking a “complete” copy of the 1979 P/A.

184.  It was only on 31 December 2009 that P made the 1^st Police Report complaining of forgery of the 1979 P/A (Report No TST RN c9038248).  The 1^st Police Report appeared to be made to the Tsim Sha Tsui Police Station[90].  P did not mention in his statement to the police that the 1979 P/A was prepared by Mr Li’s firm.  P then later made another report and this time to the Wong Tai Sin/Sai Kung Police Station (No 13007058) (“2^nd Police Report”) and his statement was given to the police on 13 June 2013[91].  In this 2^nd statement, P did not mention his 1^st Police Report or his 1^st statement, nor did he make any specific complaint about the 1979 P/A being a forged document.  Further the 2^nd Police Report was only a general complaint that he believed someone had used his identity to submit the applications for the development on the Land.  Then on 5 March 2014, P’s solicitors wrote to the Wong Tai Sing Police Station referring to P’s 2^nd Police Report and enquired the status of their investigation, and on 10 March 2014, there was a reply from the police stating that they would give a reply as soon as possible, and later on 18 March 2014, there was a further reply to say that the case was still under active investigation[92].  Thereafter, there was no further update on the matter, nor were there any further enquiries by P’s solicitors for follow up.

185.  As Mr Li had said, the police had never contacted him for any investigation over P’s reports. 

186.  As the Fraud complained of is a serious complaint, I find it odd that P did not press any further on his 1^st Police Report at all, or did he follow up for press for a result of the police investigation in relation to his 2^nd Police Report after March 2014.  It was not clear whether P had provided any copies of the 1979 P/A to the police to investigate, nor did he clearly tell the police that he did not attend Mr Li’s office/firm to execute the 1979 P/A, since that might have prompted the police to contact Mr Li to investigate.

187.  As mentioned earlier, according to Annex A, he in fact returned to Hong Kong some 7 or 8 months between 21 March 1979 and 7 November 1979.  As Mr Li had pointed out, there were at least 5 other Landowners who attended his office to sign powers of attorney at the time, and that one villager knew what the other villager was doing and there was no secret in the Village, and that they all lived in and that they should all know each other. 

188.  In fact, 3 of the 5 Landowners were the 3 Cousins whom P used to hang around with and P knew that they were all involved in the same development.  P’s other cousin Wong Kwok Man also signed his name in English and was identified by his British passport number.  According to the Lot Index Plan[93], the Village is not a big village, and at least 4 of the other 5 Landowners lived not far away from P.  The other 5 Landowners had gone to Mr Li’s office between April and June 1979, and P was in Hong Kong at the time.  It was not P’s case that the 3 Cousins were part of the Fraud alleged by him, nor were they alleged to be the Conspirators.  As said earlier, P was aware that Ho was to construct the Small House on the Land.  According to P, after the New Grant, he did nothing.  This would also mean that he did nothing to make clear to Wong and Ho that he had revoked his authorization to them in that he no longer entrusted matters in relating to the Land to Wong and Ho.  There was no evidence that P would have refused to execute a power of attorney to Ho in relation to the development of the Land and/or he building of a Small House thereon.  There was simply no reason, or any reasonable explanation, as to why P would have been singled out and that he did not go with the 3 Cousins to Mr Li’s office between April and June 1979, and that the Conspirators would choose to arrange an imposter to go to Mr Li’s office in December 1979, ie about 6 weeks after P had left Hong Kong, to sign. 

189.  As I have found earlier, Mr Sperry’s conclusion was far from cogent.  Having considered all the evidence, this Court is not satisfied that P’s signature on the 1979 P/A was forged or executed by an imposter, or a false document.  As said earlier, I accept Mr Li’s evidence that he had verified the identity of the signing person to be P. I also accept Mr Li’s evidence that the contents of the 1979 P/A would have been duly interpreted to P.  It is also my finding that P did sign the 1979 P/A in escrow between April and June 1979 and it was only for those reasons given by Mr Li that it was dated 18 December 1979, the day before the execution of the 19.12.79 Development Agreement, and that payment was made by WB Lock/Honoo to Ho on 19 December 1979, ie the “Completion” date.

190.  Further, in light of my above finding, it follows that the 1980 Substitute P/A was validly executed by Ho in favour of KB Lock, and it was not a false document as alleged by P.  KB Lock as substitute attorney was conferred with all the powers under the 1979 P/A.  Although Ho had signed an acknowledgment on 20 January 1990 confirming his agreement to the revocation of the 1979 P/A[94] (“20.01.90 Acknowledgment”), this document was never registered in the Land Registry against the Land. Furthermore, although it would appear that some of the Landowners such as Wang Chi Ho and Wong Kwok Man had each entered into a Deed of Revocation of their respective irrevocable power or attorney given in May/June 1979, P did not enter into such a Deed of Revocation, and thus the 1979 P/A seemed to have continued to remain valid.

191.  As said earlier, I agree with Mr Shum that P’s attorneys were authorized to sign the 18.10.89 Boundary Setting Letter and the 1990 Form 9 on behalf of P, and whether those two documents were signed by another in P’s name or forged would not be have mattered because even if they were, the person signing would have the authority to do so.

192.  In any event, further, having regard to my findings above, I find there was no sufficient evidence of the Fraud as alleged by P.  I also find there was no sufficient evidence of any dishonest assistance or knowing receipt on the part of D2 as alleged by P.

I.    Issue 2 - The Trust Issue

193.  This issue is essentially in relation to whether there was a resulting or constructive trust of the Land with P as trustee in favour of Ho.

194.  It was pleaded by D2 that (1) P’s application for the New Grant was made by him as trustee for Ho as agreed by P and Ho and (2) the premium of HKD1,760 for the grant of the Land was paid by Ho.  Hence, P held the Land on resulting trust and/or constructive trust by common intention and/or understanding of the parties for Ho as the sole beneficial owner[95].

195.  Notwithstanding D2’s pleaded case, as seen from Mr Shum’s Closing Submissions, D2’s case is based essentially on the presumption of a resulting trust[96].

196.  As submitted by Mr Chan, the starting point was that equity would follow the law, and that P being the grantee of the New Grant and the registered owner of the Land, would be the legal and beneficial owner of the Land.

197.  As further submitted by Mr Chan, a “purchase price” resulting trust arises where one person makes a voluntary payment to another to fund the purchase price of a property, but it is merely a presumption that is easily rebutted by contrary evidence and if money is provided as a loan, no resulting trust will arise[97].

198.  However, I have found earlier that there was no sufficient evidence of the Loan or any loan as alleged by P.

199.  Mr Chan also submitted that it was “fanciful” to suggest that the premium of HKD 1,760 constituted the “purchase price” of the Land, as P was only able to apply for the New Grant with discounted premium using his status as an indigenous village under the Small House Policy, a valuable commodity albeit one which was not alienable, and the premium was only one aspect of the cost of applying for the New Grant. 

200.  Mr Chan further argued that it was inherently improbable that P would give up his (only) quota to build a Small House at a concessionary premium to Ho in exchange for Ho’s payment of the premium of HKD 1,760 as this effectively meant that P was gifting his “Ding” right to Ho for no benefit, as there was no suggestion nor evidence, that P had received any other payments from Ho.

201.  As said, the market value of the Land as a bare site less the premium payable set out in the Valuation Report was in the sum of HKD 143,000 as at 18 December 1979.  It was not disputed that the sum of HKD 1,760 was a concessionary premium.

202.  As explained in paragraph (II) (a) of the “Explanatory Notes” of the  Small House Policy[98], the policy has been implemented since December 1972 and is formulated to allow an indigenous villager, or a “Ding”, to apply for permission to erect, for once in his lifetime, a small house on a suitable site within his own village.  The application is not simply for a grant of a piece of bare land for the indigenous villager to do whatever he wanted with it.  As seen earlier, the Deadline in the New Grant was 30 months from the grant for the erection of the Small House.  The grant of the Land to P was clearly subject to all those General and Special Conditions in the New Grant and all P’s obligations as a “Ding” thereunder, and by accepting the New Grant, P had agreed to be bound by those Conditions or obligations in the New Grant.

203.  Firstly, there had to be the acceptance of all the Conditions in the New Grant before payment of the premium for the Land.  In my view, the “purchase price” was not simply payment of HKD 1,760 but also included a commitment to meet all the Conditions, and the obligations and payments on behalf of the “Ding” under the New Grant, including, amongst other things, to pay the Government rent by equal yearly payments, to apply to set the boundary of the lot granted to the grantee,  to develop the Land by the erection thereof of a Small House and for the Small House to be completed and fit for occupation before the Deadline,  to expend not less than HKD 15,000 on the erection of the Small House, excluding moneys spent on site formation, foundation, access roads and other ancillary works, and to pay to the Government on demand all necessary costs and expenses[99].

204.  As seen subsequently, the erection of the Small House on the Land involved instructing not only builders but various professionals and the work involved included seeking all necessary approvals from the Government for commencement of construction, and in the meantime, there were the annual rental payable to the Government and fines for the numerous Extensions over the years, and then upon completion of the Small house, rates, utilities and premium for removal of non-alienation restrictions.

205.  It was set out in the New Grant that possession of the Land was deemed to be given and taken on the date of the New Grant, which P had authorised Wong to accept on P’s behalf under the 1977 London P/A, and yet on P’s own evidence, he never cared about how the Land was used by anyone after he executed the 1977 London P/A, as he did not communicate with Wong or Ho or anyone else, nor had he ever sought possession of the Land from Wong or Ho or any one else prior to these proceedings.

206.  In any event, in the present case, whether the “purchase price” was simply HKD 1,760 or not, first, P admitted that he did not in fact have any idea or knowledge of the amount at the time, and second, it was not disputed that P did not pay for or meet any part of the “purchase price” nor met any of the Conditions or his obligations as a “Ding” for payments, nor did he ever pay any of the costs/sums which he was obliged to expend or pay under the Conditions, and that at the time of the acceptance of the New Grant, it was Ho (or Wong) who paid and who agreed to take up all obligations under the Conditions on behalf of P.

207.  Having considered the evidence, I find the presumption of resulting trust did arise, and that P has not been able to rebut the presumption of resulting trust in favour of Ho.

J.     Issue 3 - The Beneficial Interest Issue

208.  The issue here is whether the beneficial interest in the Land devolve successively from P to Ho, Ho to Honoo, Honoo to Edico and then Edico to D2, and/or whether D2 had acquired a beneficial interest in the Land.

209.  D2’s case of the devolution of beneficial interest in the Land from P to D2 was set out in Annex 1 attached to Mr Shum’s Closing Submissions (“Annex 1”). 

210.  It was submitted on behalf of P that even if the 1979 P/A were found to be valid and genuine, none of the documents relied upon by D2 in Annex 1 would have constituted instruments effective to transfer equitable interest in the Land.  Mr Chan had further referred to section 5(1) of the Conveyancing and Property Ordinance, Cap 219, which provides that no equitable interest in land can be created or disposed of except by writing signed by the person creating or disposing of the same, and that the disposition of equitable interest is required to be made by writing and not just evidence in writing and further that the requirement of section 5(1) means that every (legally effective) disposition of equitable interest in land produces a written instrument which is chargeable with stamp duty.

J.1     From P to Ho

211.  Mr Shum had referred the Court to what was said by Yuen JA in Lau Kwai Kiu v Brian Xintian [2012] HKLRD 954(CA), namely that documents should be considered in the light of all the surrounding circumstances, including expenditure of money on the property and the occupation of the property and that a judge was not entitled to make any assumptions about the nature of the documents in the case just by reason of the location of the property in question[100]. 

212.  Mr Shum had further referred to this Court’s judgment in Angel Fund Co Ltd v Chan Yau Kwong [20190] HKCFI 1821.  It was said in paragraph 84(1) thereof that from the authorities produced to the Court, there had been various “devices” adopted in the transfer of “Ding” rights in land in New Territories by an indigenous male village entitled to those rights, in order to avoid the non-alienation restrictions imposed by the Government under the Small House Policy and thus the wordings of such documents should not only be considered at their face value but should be considered against the peculiar background of the Small House Policy and in light of surrounding circumstances.

213.  In relation to the 1979 P/A, firstly, it was expressly stated therein that the 1979 P/A was given by P to Ho for valuable consideration and was irrevocable[101].  Although there was no evidence as to what valuable consideration was given to P pursuant to the 1979 P/A, the fact was that as mentioned earlier, P had never expended any money to obtain the New Grant and/or the Land and/or to build the Small House, nor had P ever occupied the Land or sought possession from his attorney Wong (under the 1977 London P/A) after the New Grant was issued and the Land granted to P.  In fact, even on P’s own case of the alleged Loan (which this Court has found there was no sufficient evidence of), P frankly admitted that he had never repaid the same to Ho at the time of the 1979 P/A, and notwithstanding he was in Hong Kong in 1979 for about 7 to 8 months  

214.  Secondly, the powers given by P to Ho in the 1979 P/A were very wide and included , in particular, a power to sell and to absolutely dispose of “the said premises” for such price or other consideration as Ho should think proper and to receive from such purchaser the purchase money[102]. The definition of “the said premises” was the property set out in the  schedule in the 1979 P/A, which was the Land together with the building to be erected thereon subject to the Conditions in the New Grant[103].  There was thus no need for Ho (or the attorney) to even consult P over any sale price of the Land and the Small House thereon, not to say to account to P any sale proceeds.

215.  It was the written evidence of Mr WL Chan that in about 1979, the irrevocable power of attorney and a building agreement was “common device” used to achieve the sale of land held under a Small House grant which could be sold after completion of the development and payment of premium to Government[104].

216.  During the trial, Ms Lai had also said all along in the entire New Territories, the transaction for the transfer of Ding’s rights in Land and the Small House thereon was by way of a power of attorney and a building agreement (development) and that the attorney had the power to sell the relevant land, and that this was the mode of transfer adopted in the entire New Territories.

217.  The documents prepared by Mr Li also supported the above evidence of Mr WL Chan and Ms Lai.  Having considered all the surrounding circumstances at the time of the execution of the 1979 P/A, and the powers set out in the 1979 P/A, I am of the view that the 1979 P/A was used as a “device” and/or part of a “device” or a transactional document to transfer the beneficial ownership of the Land, and that pursuant to the 1979 P/A, the beneficial interest in the Land and the New Grant was transferred by P to Ho and thereafter vested in Ho, namely that upon the execution of the 1979 P/A, P became a mere trustee holding only the legal title of the Land for Ho and this would also explain why P took no part in the subsequent development of the Land.

J.2     From Ho to Honoo

218.  Pursuant to the 1979 P/A, Ho was authorized, amongst other things, to act for P in his name or in the name of Ho as P’s attorney and in particular under Clause 16 thereof, to execute and sign any agreements, assignment etc and under Clause 18, to enter upon and take possession of the Land and any building erected thereon.  Ho, as P’s attorney, executed the 19.12.79 Development Agreement with Honoo pursuant to which Honoo then became the developer of the Land.  Further, on 28 June 1980, pursuant to the 1980 Substitute P/A, KB Lock became P’s substituted attorney and was conferred full power and authority as Ho under the 1979 P/A, and was thus likewise authorized to act for P in his name or as P’s attorney.  

219.  Mr Chan submitted that the 19.12.79 Development Agreement was silent on any transfer of beneficial or any other interest in the Land to Honoo, and there was no mention of any sale of the Land.

220.  Under Clause 2 of the 19.12.79 Development Agreement, the “Developer” (Honoo) had on or before the execution of the agreement paid to the “Owner” (with P named as the “Owner”) a security deposit of HKD 195,000 for the due performance by Honoo of the terms and conditions under the agreement (“Security Deposit”). 

221.  It then states under Clause 16 that the “Owner” was to pay to the “Developer”(Honoo) HKD 350,000 for the development costs and to refund to Honoo the Security Deposit within 7 days from the issuance of the Certificate of Compliance, PROVIDED that if the Owner failed to pay the said development costs of HKD350,000 as stated, then the “ Owner” or his attorney was to execute an assignment or a conveyance on sale free from incumbrances to the “Developer” or the Developer’s nominee of the Land together with the building erected thereon free from encumbrances in lieu of payment[105]. It was submitted on behalf of P that the “Owner” or P thus had an option to either pay the total sum of HKD 545,000 to Honoo up to 7 days after the issue of the Certificate of Compliance, or to formally assign the Land and the Small House to Honoo or its nominee (“Option”). 

222.  Clause 17 provides that the “Owner” agreed to secure the development costs of HKD HKD350,000 and the “Security Deposit” by way of a building mortgage in favour of the “Developer” (Honoo) and then Clause 18 provides that the “Owner” had to execute an irrevocable power of attorney in favour of Honoo as such person as appointed by the “Developer”.  There was further a receipt clause signed by Ho as attorney for the “Owner” for Security Deposit of HKD 195,000 by Ho as attorney for the “Owner”.

223.  The 1980 Substitute P/A was thus executed pursuant to Clause 18.

224.  Mr Chan argued that as 7 days after the issuance of the Certificate of Compliance, the Owner could elect to pay to Honoo the sum of HKD 350,000, and to refund the “Security Deposit” (HKD 195,000)   totalling HKD545,000 which would then discharge all the Owner’s obligations under the agreement and this would then to allow the Owner to remain the legal and beneficial owner of the Land.

225.  On the other hand, Mr WL Chan’s evidence was that the Security Deposit of HKD 195,000 was in fact a payment to Ho by Honoo in disguise and it was never intended that the “Owner” would pay the development costs, and further the amount of HKD 195,000 was higher than the value of HKD 143,000, being the Land as a bare site, in the Valuation Report.

226.  First, in light of my earlier finding that the 1979 P/A was valid and genuine and by executing the 1979 P/A, P had divested his beneficial interest in the Land and the New Grant and the development thereon to Ho.  Thus, although P was stated to be the “Owner” in the 19.12.79 Development Agreement, in light of my finding, P was merely a title owner holding the beneficial interest in the Land and the New Grant for Ho.   

227.  Second, under the New Grant, the premium was HKD 1,760 and the amount to be expended by the grantee on the building of the Small House was stated not to be less than HKD 15,000.  Although according to the Valuation Report, the market value as at 18 December 1979 of a hypothetical Small House on the Land was HKD 733,980, this value was based on transaction prices of various completed houses and the valuer had in fact opined the estimated construction cost of an hypothetical Small House as at the valuation date was HKD 230,000[106].

228.  The amount of HKD 545,000 in the 19.12.79 Development Agreement was said to be the development costs, or the construction costs. Compared to the premium of HKD 1,760 and the minimum sum of HKD 15,000 to be expended on the building of the Small House under the New Grant, and the estimate amount of the construction costs of HKD 230,000 in the Valuation Report, the total amount of HKD 545,000 (being HKD350,000 + HKD195,000) in the 19.12.79 Development Agreement would in my view seem very high.  There was no evidence that the total amount of HKD 545,00, or the “Security Deposit” was based on any proper valuation or proper estimate of construction costs carried out at the time in 1979.

229.  Having said this, I accept that the parties could not have known whether the market would go up or down in the future after Honoo entered into the 19.12.79 Development Agreement and whether Ho or KB Lock or Honoo could have anticipated that the development would take a very long time to complete and the Certificate of Compliance was eventually only issued on 25 November 1998, some 19 years later.

230.  Although P relied on the Option, the Option in the 19.12.79 Development Agreement did not mean that Ho had not divested his beneficial interest in the Land by the 19.12.79 Development Agreement and the 1980 Substitute P/A, as the Option would also be consistent with a mutual agreement between Ho and Honoo for Ho to either pay Honoo the sum of HKD 545,000 to “buy back” the beneficial interest in the Land, the New Grant and the completed Small House, or to transfer the legal title in the Land to Honoo .  

231.  It was also Mr Li’s evidence that Ho would not have signed the 19.12.79 Development Agreement with KB Lock if he had not received the sum of HKD 195,000, and that it was only when the money had been received by Ho then there was “Completion” of the transfer.  Further, as seen in the 1980 Substitute P/A, that irrevocable power of attorney was for Ho to appoint KB Lock as his substitute with full powers under the 1979 P/A, and Ho had declared that the 1980 Substitute P/A was given for valuable consideration.  This in my view further confirms my finding that by conferring KB Lock with all the full powers under the 1979 P/A, Ho had transferred the beneficial interest in the Land and the New Grant and the development to KB Lock/Honoo.

232.  Among the documents produced by Mr Li, there was a letter dated 29 October 1986 from Messrs Foo & Li in response to a letter from another firm of solicitors Messrs Maurice Lee & Co.  Mr Li explained that this was when the 6 Landowners’ cases, including P’s, were transferred to Messrs Maurice Lee & Co and as seen in the letter dated 29 October 1986[107], “all title deeds” in respect of the 6 lots of the 6 Landowners whom Mr Li acted were sent to Messrs Maurice Lee & Co.  Those “title deeds” of P’s lot, ie the Land, had included the New Grant, the Memorial 97045, the 19.12.79 Development Agreement and the 1980 Substitution P/A.  It would thus appear that the two solicitors’ firms had regarded the 1979 P/A with the Memorial 97045, the 19.12.79 Development Agreement and the 1980 Substitution P/A as part of the “title deeds” of the Land.

233.  In any event, having considered the 19.12.79 Development Agreement and the 1980 Substitute P/A and the surrounding circumstances at the time of the execution of those documents, in my view, the 19.12.79 Development Agreement accompanied by the 1980 Substitute P/A were again a “device” or transactional documents whereby Ho’s beneficial interest in the Land and the New Grant were transferred to KB Lock and/or Honoo at valuable consideration.

J.3     From Honoo to Edico 

234.  D2 relied on the 28.04.89 Deed, a supplemental deed executed on 24 January 1990 (“24.01.90 Supplemental Deed”) and further the 20.01.90 Acknowledgment signed by Ho, pursuant to which beneficial interest in the Land and the New Grant and the development was transferred to Edico. 

235.  Mr Chan again pointed out that none of these documents mentioned anything about the sale or transfer of any interest in the Land and as such, they could not satisfy the requirement of section 5(1) of the Conveyancing and Property Ordinance and none of the documents could support an inference of beneficial interest having been transferred.  Further, the 28.04.89 Deed referred to P as the registered owner of the Land without qualification, and rather than providing for any transfer of Honoo’s rights or interests in the land or under the 19.12.79 Development Agreement, the 28.04.89 Deed merely provided for the release of Honoo from its obligations owned to P to finance and build the Small House.

236.  As seen in Ms Lai’s witness statement, sometime before April 1989, Mr Lau, the Chairman of the Sai Kung Rural Committee, informed her (on behalf of Edico) of an opportunity to take over Honoo’s place as the developer of the Land.  It was Ms Lai’s evidence that neither she nor anyone on behalf of Edico had heard of Honoo or KB Lock, nor did she ever meet KB Lock and that the development was introduced by Mr Lau, who was the one who was to be responsible for dealing with the villagers/the Landowners and that all transactions including all letters were done through Mr Lau and Edico’s solicitors Messrs Johnson, Stokes & Master.  As Mr Lau had orally represented to her that he would procure a fresh set of security documents to be executed in favour of Edico if Edico was to conclude the deal with Honoo, to facilitate Mr Lau to do so, Mr Lau was then appointed as a director of Edico and also Chairman of the board. 

237.  It was Ms Lai’s evidence during the trial that Edico paid a lump sum price though Mr Lau for the purchase of the 12 Lots to become the substituted developer thereof, and that it was Mr Lau who caused Honoo to execute the 28.04.89 Deed[108] and 24.01.90 Supplemental Deed whereby Edico then became the substitute developer.  Thereafter, Honoo dropped out of the picture, and Edico in effect obtained all the beneficial interest in the Land and the New Grant and the development from Honoo.  Honoo was later dissolved on 31 August 1994[109].

238.  The 28.04.89 Deed  provides, amongst other things, that Edico was to use its best endeavours and at its expenses to obtain P’s  consent to the execution of a building agreement between P and Edico (“Building Agreement”) and a cancellation deed in respect of the 19.12.79 Development Agreement (“Cancellation Deed”), and that the 28.04.89 Deed was conditional upon P and Honoo signing the Building Agreement and the Cancellation Deed within 2 months, and further upon the signing of the Building Agreement and the Cancellation, Edico was to at its own expenses procure that Edico and /or its nominee to be given an irrevocable power of attorney by P to deal with the Land (“New P/A”) and Honoo was to consent to P executing a revocation of the 1979 P/A and the 1980 Substitute P/A (“Deed of Revocation”)[110]. Copies of the Building Agreement, the Cancellation Deed, the New P/A and the Deed of Revocation were annexed to the 28.04.89 Deed together with copies of the 1979 P/A, the Substitute P/A and the 19.12.79 Development Agreement.

239.  According to Ms Lai, Edico relied on Mr Lau to liaise with the Landowners for the signing of all the relevant documents.  Although  Ho subsequently signed the 20.01.90 Acknowledgment as mentioned earlier, to confirm that he agreed to the revocation of the 1979 P/A signed by P[111], which was held by Edico and/or D2 but as mentioned earlier, the 20.01.90 Acknowledgment was never registered at the Land Registry.  It would appear that Mr Lau was not able to procure P to execute the Deed of Revocation with Ho, although Ho and KB Lock had entered into a Deed of Revocation on 20 January 1990[112]. It further appeared as Mr Lau was not able to obtain the signing of all those documents by all the Landowners within the time stipulated and pursuant to the 24.01.90 Supplemental Deed, Honoo and Edico had then agreed to an extension of time to 10 May 1990[113].

240.  The 28.04.89 Deed and all the accompanying documents were prepared by Edico’s solicitors, Messrs Johnson, Stokes & Master,  for Edico, and it is clear from all those documents prepared that an irrevocable power of attorney and a building/development agreement formed an integral part of the transactional documents or the “device” used for transfer of each of the Landowners’ beneficial interests in the 12 Lots, namely when there was to be a transfer , the set of documents would include deed of revocation of the previous irrevocable power of attorney granted by the Landowner to the previous developer (or “previous purchaser”), a cancellation agreement of the previous building/ development agreement, and a new irrevocable power of attorney to the new developer (or “new purchaser”) and a new building/development agreement.

241.  As said earlier, I have found that pursuant to the 1980 Substitute P/A and the 19.12.79 Development Agreement, beneficial interest in the Land and the New Grant and in the development had been transferred from Ho to Honoo.  Honoo then went into dissolution in August 1994.  It would thus seem that more probable than not that by KB Lock entering into the Deed of Revocation with Ho, KB Lock and/or Honoo had agreed to transfer or divest all their beneficial interests in the Land, the New Grant and the development to Edico.  As pointed out by Mr Shum, Honoo would not have abandoned the Land since 1990 and then entered into dissolution.   

242.  In any event, having considered the 28.04.89 Deed, the 20.01.90 Acknowledgment, the Deed of Revocation executed on 20 January 1990 between Ho and KB Lock, and the 24.01.90 Supplemental Deed, I find they were all or part of the transactional documents for the transfer of the beneficial interest in the Land and the New Grant and the development from Honoo to Edico.

J.4     Edico to D2

243.  As mentioned earlier, Edico then entered into the JV Agreement with D2 on 23 September 1995[114].  It was expressed therein that upon execution of the agreement, D2 was to advance a sum (by way of loan) of HKD14m to Edico and the shareholders of Edico (namely Ms Lai and Lee) to enable them to finance or refinance all acquisition or other costs incurred prior to the date of the JV Agreement by Edico in connection with the 12 Lots defined as the “Tai Wan Property” in the agreement[115]. 

244.  Pursuant to the JV Agreement, the shareholders and Edico jointly and severally undertook with D2 the amount of the revenue and expenditure of Edico in respect of the development and the net profits for D2 as set out therein, and that any shortfall was to be recoverable by D2 from the Shareholders and Edico as a debt[116].  Further, D2 was to be responsible for all development costs which was expressed not to exceed HKD 23m, and that the parties further agreed as to the order of priority of how the income arising from the sale of the “Tai Wan Property” (excluding deposit and part payments of purchase price already received by Edico) was to be applied[117].

245.  D2 was said to enter into possession of the Land in 1996[118]. No repayment was ever made by Edico to D2 within the 30 month period under Clause 12 of the JV Agreement or up till now.  As mentioned earlier, Edico has confirmed D2 has the sole right of possession of the Land and Edico only has the remaining right to share profits as per the JV Agreement[119].

J.5     Conclusion on devolution of beneficial interests

246.  Having considered the above, even though there was no express reference in any of those documents above mentioned to a transfer or sale/purchase of beneficial interest in the Land, the New Grant and the development, having considered the surrounding circumstances of those documents, I find a reasonable inference is that such beneficial interest was transferred from P to Ho, and then from Ho to Honoo, and Honoo to Edico, and then under the JV Agreement to D2.

K.    Issue 4 - The Waiver/Acquiescence Issue 

247.  It was D2’s pleaded case that since P was content in letting the Land revert to the Government for breach of the building covenant, if, (which was denied by D2), P had any residual right or interest in the Land, he must have by conduct waived or abandoned the same by acquiescence and laches for over 30 years.

248.  As set out in Mo Ying v Brillex Development Ltd [2015] HKLRD 985, an estoppel by silence, inaction or acquiescence arises where a reasonable man would expect the person against whom the estoppel is raised, acting honestly and responsibly, to bring the true facts to the attention of the other party known to him to be under a mistake as to their respective rights and obligations and this has been approved as the general principle underlying estoppel by acquiescence[120].

249.  G Lam J in Li Kwok Ching v Secretary for Justice HCA 1303/2010 ( unrep 31.03.15), referring to the 5 probanda identified by Fry J in Willmott v Barber (1880) 15 Ch D 96, has said as follows[121]:

“95.  In this case, both parties referred me to the five probanda enunciated by Fry J in Willmott v Barber (1880) 15 Ch D 96, 105 in the following passage:

‘A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that description? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do.’

96.  Although the five probanda have been described as “something of a stumbling-block in the development of equitable estoppel” more generally, they have also been said to be appropriate to a case of unilateral mistake (per Lord Walker at Cobbe v Yeoman’s Row Management Ltd, supra, at §56 & §63).

97.  The underlying view seems to be that it is unconscionable, and therefore unacceptable to a court of equity, that a landowner should knowingly stand by while a stranger incur a detriment or disadvantage acting upon some misapprehension of his legal position with regard to the land.”

250.  On the other hand, Mr Chan submitted that mere inaction (in the sense of passive assent) cannot give rise to an equitable bar for otherwise it would negate the purpose of statutory limitation[122] and that  there was no proper pleading of P’s knowledge (both as to D2’s expenditure on the Land and as to D2’s alleged misapprehension of legal rights) or detriment referable to such misapprehension.

251.  As said earlier, it was P’s own pleaded case that as he had never proceeded with development of the Land, he mistakenly thought that the Land must have been revered back to the Government due to the long lapse of time without development, and that when he visited Hong Kong and saw the development and later buildings on the Land, he mistakenly thought the Government had granted the land to another grantee[123] and that it was in or about 2008, that P made an enquiry with the District Lands Office about applying for a new grant for a Small House.

252.  As pointed out earlier, P’s above pleaded case was inconsistent with P having admitted that in 1989, he had received the WKM Letter and also a telephone call from Mr Lau as to whether P would sell him the Land.  Under cross examination P also admitted that he knew at that time when Mr Lau called, the Land was still in P’s name and P had also admitted that he knew if the Land was not built on, then he needed to pay penalty but he said he never received any document from the Government. 

253.  Thus, P’s case was first he did nothing between 1977 and 1989 and second, even by 1989, he knew the Land was still in his name, he again did nothing until January 2008.

254.  I have found earlier that P’s evidence was full of inconsistencies and he was not a credible witness. As seen earlier, in 1977, when Wong and the P and the 3 Cousins had the conversation standing in the Village, according to P, Wong had pointed out the Area to him.  Then during the trial, P also admitted that Wong had told him that the Land granted to P was around the Area.  This would have been in 1979 and/or early 1980s and in any event, presumably before P and Wong were no longer on speaking terms.  Then, according to P in 1997, when he returned to Hong Kong, he noticed a row of new houses in the Area. 

255.  When P executed the 1977 London P/A, he had the exact Lot and DD numbers of the Land which was set out in the 1977 London P/A. Further, by the 1977 London P/A, P had authorised Wong to take possession of the Land and the New Grant.  As mentioned earlier, he knew that according to the New Grant, he had to build a Small House on it within a deadline.  Yet, when he returned to Hong Kong for 7 or 8 months in 1979, he did not take physical possession of the Land nor of the New Grant.  As said earlier, I find that pursuant to the 1979 P/A, P had divested his beneficial interest in the Land and the New Grant.  Even if he had not, he had been told by Wong that the Land was around the Area and in 1989, he clearly knew the legal title of the Land was still in his name. Yet, he chose not to do anything.  He must have known that payments had to be made, at least ground rent and/or extensions for failing to build within a stipulated deadline.  That he had not received any documents from the Government was not an excuse.  In fact, he said he saw new houses in the Area in 1997, although it transpired during the trial that it was in 1998 that he visited Hong Kong.  As said earlier, after he emigrated to London on 7 May 1977, he had been back to Hong Kong on no less than 10 occasions, and 7 of those visits were after 1989, of which 6 visits were after the Certificate of Compliance was issued.

256.  In my view, P, knowing where the Land was, or at least knew that the Land was within or around the Area, and knowing the exact lot and DD numbers of the Land and that the title of the Land was still held by him in 1989, he chose to do nothing and let other persons to proceed to incur building costs to build Small Houses in the Area which he knew and saw latest by December 1998/January 1999, and even then, yet again he chose to do nothing.  Even if not pleaded properly, from the evidence, D2 had clearly suffered detriments as a result of P’s inaction from taking any action in relation to the Land for over 30 years by incurring costs in the development.

257.  Having considered all the evidence, I am of the view that P having had an opportunity to assert his rights and interests in the Land in 1979 and later in 1989, had failed to do so.  In my view, it is unconscionable for P now to exert his right as a legal owner and he is now estopped from asserting his right as legal owner, if any, by proprietary estoppel. 

L.   Issue 5 - The Adverse Possession Issue

258.  Adverse possession was D2’s alternative case in the event that D2 and/or its successors was found not to have any beneficial interest in the Land.

259.  The law on adverse possession is well settled.  To succeed in a claim of adverse possession, the squatter bears the burden of proof to satisfy the court that (1) he has been in open uninterrupted and exclusive possession of the land in question for the requisite period; and (2) he has the intention to possess, ie the animus possidendi. 

260.  The requisite period to extinguish an owner’s right of action to recover land  under section 7(2) of the Limitation Ordinance, Cap 347,  is 20 years for rights of action accrued before 1 July 1991[124] and 12 years thereafter.  Further, section 8(1) of the Limitation Ordinance provides that the right of action of a person bringing an action to recover land shall be deemed to have accrued on the date of the dispossession or discontinuance.

L.1    Possession

261.  On possession, Mr Chan submitted on behalf of P that before the alleged commencement of the building works in the 1990s, there was no evidence that Honoo took physical possession of the Land at all after the execution of the 19.12.79 Development Agreement, and further, there was no clear evidence as to precisely when the builders took control of the 12 Lots, and how the builders exercised physical control of the Land (eg by fencing or enclosure and whether the site was under lock and key). 

262.  The evidence of Mr WL Chan was that he got acquainted with Ms Lai’s mother Madam Ho Lai Ye (何麗兒) (“Madam Ho”) and Ms Lai over a previous development project, and in the mid 1990s, he represented Lion Team in approving a loan to Edico under the 07.02 94 Loan Agreement.  Madam Ho had invited Mr WL Chan (or the Shun Tak Group) to take over the development of the 12 Lots from her family company Edico.  Mr WL Chan said he had visited the site, and saw that some site formation works had been done by Mr John Hui of Hohn Hui & Associates (“John Hui”), the architect employed by Edico, and that the site was at the top of a hill which had then been flattened to form a levelled site. 

263.  It was also Mr WL Chan’s evidence that upon perusal of all the documents, he formed his view that (i) P had been fully paid by Ho, and that the 1979 P/A was to clothe Ho with all the powers of the owner and it was Ho rather than P who was the beneficial owner of the Land; (ii) by virtue of the 1980 Substitute P/A and the 19.12.79 Development Agreement, Ho had disposed of his beneficial interest in the Land in favour of Honoo: and (iii) by the 28.04.89 Deed (as varied by the 24.01.90 Supplemental Deed , Honoo had agreed to dispose of its interest in the Land in favour of Edico, and that Edico was to make its own arrangement in obtaining the necessary documents as Honoo wished to drop out of the picture.  It was Mr WL Chan’s evidence that although there was some incomplete documentation in respect of the Land, Mr WL Chan said he reached an agreement with Edico to take over the development, and on 23 September 1995, the JV Agreement with Edico was then signed.

264.  According to Mr WL Chan, since taking up possession of the site after the JV Agreement, D2 has been in exclusive possession of the Land and the Small House thereon.  During the trial, Mr WL Chan had again confirmed that when he visited the site prior to the JV Agreement, the slope of the site had already flattened although there was no commencement of building and he had said that Edico must have obtained vacant possession of the site, otherwise, Edico could not have carried out the site formation work there.

265.  When cross examined by Mr Chan on behalf of P as to why between 1997-1998, when the Building Authority wrote to John Hui regarding the Land, the letters were copied to Edico and not D2 and that this showed D2 was only a lender, Mr WL Chan denied that D2 was only a lender, and that as John Hui was already instructed by Edico at the time of the D2 entering into the JV Agreement, John Hui continued to be the architect, and also under the JV Agreement, Edico was required to comply its obligations to apply for an access road to to the site to be approved. When put to him that D2 never took physical possession of the Land, Mr WL Chan’s response was D2 had the rights as a landowner which D2 had obtained legally.

266.  D2’s Finance Manager, Mr SH Wong joined D2 in 1994 and  his evidence was that since about 1996, D2 has taken possession of the site including the Land, and that possession was obtained from Edico which had by then done some minor site works[125].  John Hui had applied for approval from the Buildings Department to the proposed site formation works and approval was granted by a letter dated 14 December 1993[126].  Mr SH Wong said during the trial that he had also been to the site, but the first time he went, the houses had already been constructed, with only the interior fittings which had to be done.

267.  It was also Mr SH Wong’s evidence that from 1996 to 1998, D2 carried out and completed the development of the 12 Small Houses on the 12 Lots, and since completion of the development, D2 has paid all rates assessed by the Government and Government rents up to the present, which was handed by D2’s associate company. 

268.  From copies of tenancy agreements produced by D2, the Land with the Small House thereon had been leased out at various periods from 22 April 2002 to 31 May 2009, and that property tax returns had been filed. 

269.  As for Ms Lai, she said pursuant to the 28.04.89 Deed it was Mr Lau who was responsible to find all the Landowners of the 12 Lots and to obtain their necessary signatures on various documents.  She was not involved and in fact it was her mother Madam Ho, who had passed away, who was responsible for this project, and all she knew was Mr Lau was to be wholly responsible and Mr Lau was the person who introduced the development project to Edico.  Ms Lai’s written evidence was that on the strength of Mr Lau’s representation, Edico entered into the 28.04.89 Deed with Honoo and later the 24.01.90 Supplemental Deed pursuant to which, Honoo assigned all its rights and obligations under the 19.12.79 Development Deed to Edico.  Further, it was under those circumstances that Edico took physical possession of the Land and became the developer.

270.  As seen in a letter dated 20 July 1989 from the Building Authority in response to an application made for approval of site formation on the 12 Lots , the application was made on 27 May 1989 by one W.K. Poon, who appeared to be the then architect/consulting engineer of the development, and the letter dated 20 July 1989 was sent to W.K. Poon cc Edico[127]. In fact, there was then a subsequent letter from W.K. Poon to the District Lands Office requesting a surrender of the site and to seek a regrant of a new site as the Area was unsuitable for development[128].  Such letters would also in my view indicate that Edico had taken possession of the Area (including the Land) then.

271.  Anyway, there seemed to be a change of architect, as seen in a letter dated 14 February 1990, when Ervin Lee & Associates wrote to the District Lands Office requesting for pegging for each lot.  In the letter, Ervin Lee & Associates made it clear that they were appointed by Edico for the proposed development on the 12 Lots with effect from the date of that letter[129]. During the trial Ms Lai confirmed that it was Edico which appointed Ervin Lee & Associates through the recommendation of Mr Lau, and that by then the proposed development had nothing to do with Ho, Honoo or WB Lock.  Thus, by 14 February 1990, Edico should be in possession of the site.

272.  It would appear that there was later a further change of architects and that John Hui then became appointed on 26 March 1992.  As seen in John Hui’s letter of that date to the District Lands Office, John Hui made a request for the boundary of the 12 Lots to be set out so that building works could commence accordingly[130].  Ms Lai had confirmed during the trial that John Hui had remained the architect responsible for the proposed development until the issue of the Certificate of Completion in 1998, notwithstanding the JV Agreement.

273.  During the trial, when it was put to Ms Lai that Edico never had the possession, or the right to possess/occupy the Land, nor did Edico handed over possession to D2 as the JV Agreement was only for a loan, Ms Lai had disagreed and said that the purpose of the joint venture was to transfer to D2 all Edico’s rights to possession, otherwise, D2 could not have carried out the development at the site.  She maintained that the right to possess and to develop the site had gone to D2 under the JV Agreement. 

274.  First, having considered the evidence of Ms Lai and the letters written by the architects, I find that Edico had taken over possession of the 12 Lots, probably as early as July 1989 but in any event, latest by 14 February 1990.  

275.  Second, as seen earlier, John Hui was appointed on 26 March 1992 and in their letter, they said they were appointed to act on behalf of the “Grantees” of the 12 Lots.  Even though some of the letters from the District Lands Office/Building Authority in response to letters from John Hui were cc to Edico, in so far as this Court can see, those letters from John Hui were only marked “cc client” and in fact a letter dated 12 May 1994 sent by John Hui to the District Lands Office ,submitting the approved site formation plans and one set of footpath formation and slope reinstatement plans for the issuance of the Certificate of Exemption for Building Works ,was marked not only “cc client”, but also “Wong, Hui & Co”, the solicitors firm acting for D2 in the JV Agreement and also in the present proceedings[131].  Further, in a letter dated 22 November 1995,  John Hui had written to the District Lands to seek an Extension for 12 more months to complete the building of the Small Houses on the 12 Lots and this letter was marked “cc client” and “Shun Tak Development Ltd[132].

276.  Having considered the above and the evidence of Mr WL Chan and Mr WS Ho, I find that by 22 November 1995, D2 seemed to have already taken possession of the Land but in any event, I accept that latest in 1996, D2 had taken possession.

277.  It would appear that D2 continued to enjoy undisturbed possession of the Land until events in early 2014, notwithstanding the issue of these proceedings by P in August 2012, and that D2 had openly exercised all rights of ownership over the Land and the Small House thereon without consent of P and without making any payments to any persons other than rates and property taxes to the Government.

278.  It was P’s evidence that on or about 28 February 2014, when he and his wife visited the Land, they noted there were some building works being carried out to the Small House on the Land, and the other 5 Small Houses in the Area and the vicinity, and that there were workers removing the doors, windows and walls of the Small House and tearing down the interior part of the Small House on the Land.  It was only then that P then went to make a report to the Sai Kung Police Station (“3^rd Police Report”) and further instructed solicitors to write to D2 to urge them to stop interfering with the Land.  As seen in a letter dated 30 April 2014 from the Buildings Department to the Landowners of the 12 Lots[133], it would appear that the building works were in connection with slope maintenance behind 6 of the Small Houses including the one on the Land.  It was only then that P then instructed his solicitors to write and inform the Buildings Department of the ongoing litigation concerning the Land which was noted by the Department[134].

279.  Mr Shum submitted that physical possession of the Land since 1977 must have followed the “title documents”.  Thus, Honoo entered into possession of the Land since around 1980 and that the requisite period of 20 years would have expired in around 2000.  In any event, as found by this Court earlier, Edico’s physical possession of the Land started latest by 14 February 1990 and that 20 years would have expired in around February 2010.  Then, it is this Court’s finding that D2 succeeded in possession of the Land from Edico from about 22 November 1995, or latest in 1996, and that since then, D2 had been in exclusive possession of the Land and the development (subject to any rights of Edico under the JV Agreement.   

280.  In light of all above said, I am satisfied that D2 had entered into possession in 1996, and that the requisite period of 12 years would have expired by 2008.

L.2    Intention to possess

281.  Mr Chan referred the Court to Clowes Developments (UK) Ltd v Walters [2006] 1 P& CR 1 and submitted that where an occupier believed he was there with the permission of the true owner, he did not have the necessary intention to possess, whether or not he was correct in his belief as to the identity of the true owner[135].  Mr Chan accepted that the approach of Hart J in the Clowes case was not followed in a later English first instance decision in J Alston & Sons Ltd v BOCM Pauls Ltd [2008] EWHC 3310 (Ch) where the court found that such approach was not consistent with JA Pye (Oxford) Ltd v Graham [2003] AC 419.  

282.  However, as submitted by Mr Chan, there is a divergence on jurisprudence tween Hong Kong and English law due to the conflict between JA Pye and Wong Tak Yue v Kung Kwok Wai [1998] 1 HKLRD 241.

283.  On the other hand, as pointed out by Mr Shum, the holding in Wong Tak Yue was subsequently clarified by the Court of Appeal in Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464 to be a question of fact only and not a legal principle, and that an occupier having mistaken belief can still have the necessary animus possidendi[136].

284.  In Ng Yuk Pui Kelly v Dung Wai Man [2019] HKCFI 210, L Chan J’s approach was the same.

285.  Mr Chan further submitted on behalf of P that D2 went into possession of the Land as chargee of Edico’s interest and thus having permission from Edico to remain.  However, Mr Shum also referred this Court to, Sze To Chun Keung v Kung Kwok Wai David [1997] HKLRD 885 in which it was held that an occupier in possession of the land under permission of a third party would still be in possession adversely against the true paper owner[137].

286.  Having considered the authorities, I have come to the view that even if D2 did not acquire the beneficial ownership of the Land, and had taken over possession of the Land (and later the Small House thereon) under the mistaken belief that Edico held the beneficial ownership, D2 had the intention to possess and/or proved the elements of adverse possession for the requisite period. 

M.    Issue 6 - The Illegality Issue 

287.  P’s case was that this Court should not give effect to D2’s alleged possessory right which relied upon and stemmed from the forged 1979 P/A and the false representations made by person (s) to the Government impersonating P.

288.  Further, allowing D2 to acquire beneficial ownership of the Land by the “backdoor” using the so-called development agreements and powers of attorney undermines the Small House Policy which confers a right to build Small Houses on indigenous villagers and requires the payment of a premium for alienation of the completed building.

289.  Mr Shum referred the Court to Tinsley v Milligan [1994] 1 SC 340 where the House of Lords held that a plaintiff is entitled to recover possession if he is not forced to plead or rely on the illegality, even if it emerges that the title on which he relied was acquired in the course of carrying through an illegal transaction[138].  Resulting trust was a specific example given in Tinsley v Milligan.  As pointed out by Mr Shum, the English Supreme Court in Patel v Mirza [2016] 3 WLR 399 held that the rule in Tinsley v Milligan no longer applies to bar a claim for unjust enrichment where illegality is raised as a defence in order to retain ill-gotten gains, but in the present case, P has not pleaded a cause of action in unjust enrichment. 

290.  As I have said earlier, I find that the 1979 P/A was a genuine and valid document.  Even if the Undertaking, the 18.10.89 Boundary Setting Letter and the 1990 Form were forged, D2 can still in law rely on resulting trust, proprietary estoppel and adverse possession, as set out earlier.  Further, there was no evidence that D2 took part in the alleged illegal acts.  In my view, D2 was not barred from claiming its relief.

291.  As seen in Li Pui Wan v Wong Mei Yin [1998] 1 HKLRD 84, the granting of land by the Government to indigenous villages who are male descendants is a measure made under special circumstances and should not be regarded as a public policy[139].

292.  Further, the Court of Final Appeal in Cheuk Shu Yin v Yip So Wan has held that the creation of a beneficial interest is not an alienation of the land assigned to the purchaser and it is the creation of a new interest in that land[140].

293.  Having considered the various authorities placed before this Court, I am of the view that a declaration that the beneficial interest in or possessory title to the Land is held by another party should not be refused to D2 for contravening the Small House Policy.  Furthermore, in the present case, the New Grant only restricts alienations for 5 years after the issue of the Certificate of Compliance.

N.    Issue 7 - The Limitation Period Issue

294.  P relied on section 26(1) of the Limitation Ordinance to contend that the limitation period should only run after P discovered the alleged Fraud since it was concealed from him. However, my earlier finding is that there was no sufficient evidence of the Fraud alleged by P and in any event the burden was on P to show that he could not with reasonable diligence have discovered the Fraud sooner.  Having considered the evidence in this case, P was not able to discharge the burden on him.

O.    Issue 8 - The Counterclaim to Counterclaim Issue 

295.  It is not necessary to consider this issue in light of my findings set out hereinabove.

P.    Conclusion 

296.  Having regard to all above, P’s claim must fail and I allow D2’s Counterclaim.  I order and declare as follows:

(1)  P’s claim is hereby dismissed;

(2)  D2 is the beneficial owner of the Land and that the Land do vest in D2 for the residue of the lease term of the Land expiring on 30 June 2047, subject to such rights of Edico as it may be entitled to as D2’s partner under the JV Agreement;

(3)  Alternatively, (i) P’s right to bring an action to recover the Land has become statue-barred; (ii) P’s title to the Land has been extinguished; (iii) D2 has acquired a possessory title to the Land for the residue of the lease term expiring on 30 June 2047.

297.  Costs should follow the event.  P is to pay D2’s costs of and incidental to these proceedings, including any costs reserved. There be a certificate for two Counsel.  This is an order nisi, which shall be final after 21 days.