CHEUNG KWONG YUEN v. SUN HUI FANG

DCCJ 743/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 743 OF 2016

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JUDGMENT

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INTRODUCTION

1.  This case concerns a structure (“Flat A”) on the roof of No 107 Tai Nan Street, Kowloon (“the Building”).  The plaintiff is the registered owner of the 9^th floor and the roof of the Building.  There are 2 structures on the roof of the Building, namely Flat A and Flat B.  The defendant is the occupier of Flat A.

2.  On 6 August 2014, the plaintiff commenced proceedings in the Lands Tribunal (LDPD 1740/2014) to recover possession of Flat A from the defendant. The defendant raised adverse possession as a defence to the claim.  On 10 October 2014, the Lands Tribunal gave judgment to the plaintiff.  The defendant appealed.  On 25 November 2015, the Court of Appeal allowed the appeal, set aside the judgment of the Lands Tribunal, and remitted the case to this court for a retrial (CACV 112/2015).

3.  In this trial, the plaintiff seeks an order to recover possession of Flat A from the defendant.  The defendant counterclaims that she has acquired a possessory title to Flat A by adverse possession.

4.  Mr Ryan Law (counsel for the plaintiff) and Mr Solomon Lam (counsel for the defendant) have agreed that the annual ratable value of Flat A is less than HK$240,000, and hence both the plaintiff’s claim and the defendant’s counterclaim are within the jurisdiction of this court.

5.  Further, it is not disputed that the registered owners of the 9^th floor and the roof of the Building over the years (“the Previous Owners”) are as follows:-

Name	From	Until
Cheung Kai Kwong	16 July 2987	29 November 1995
Wan Kwok Chow	30 November 1995	23 August 1998
Cheung Mui Wing Maria	24 August 1998	28 April 2006
Kwan Kwong Chung Sunny	29 April 2006	19 February 2009
Tai Sau Oi	20 February 2009	22 July 2009
Tsang Yiu Woon	23 July 2009	19 August 2009
Tang Lap San	20 August 2009	29 November 2009
Lui Ying Kwan	30 November 2009	29 July 2012
Cheung Kin Hung	30 July 2012	30 October 2013

6.  The sole issue in this case is whether the defendant can establish her adverse possession claim.  The answer to this issue would determine the outcome of this case.

THE PLAINTIFF’S CASE

7.  The plaintiff raises the following in his pleadings:-

(a) He became the registered owner of the 9^th floor and the roof of the Building on 31 October 2013.

(b) At a time unknown to him, the defendant has unlawfully and illegally entered into and occupied Flat A as a trespasser.

(c) By repeated demands in 2013 and 2014, the plaintiff notified and demanded the defendant to vacate Flat A and deliver up possession of the same to him.  Despite the repeated demands, the defendant failed to return possession of Flat A to him.

(d) The plaintiff denies that Suen Ming Fai（孫明輝）(“MF”, also known as Suen Chor Ming（孫楚明）, the defendant’s second eldest brother), 孫海洋 (“HY”, the defendant’s eldest brother), 李蓮喜 (“Lee”, HY’s wife) or the defendant has ever had exclusive possession of Flat A.

(e) Further, the plaintiff also denied that MF, HY, Lee or the defendant has ever had the intention to possess Flat A.  The plaintiff relies upon the following in support of this contention:-

(i) MF, HY, Lee or the defendant’s possession of Flat A was subject to an oral tenancy agreement under which MF, HY, Lee and the defendant were the tenants of the Previous Owners (“the Oral Tenancy Point”).

(ii) The Previous Owners allowed electricity and water to be supplied to Flat A from the 9^th floor of the Building.  A sub-meter was installed for the purpose of recording the electricity consumption of Flat A.  MF, HY, Lee or the defendant would pay the water and electricity charges to the Previous Owners upon request.  After the plaintiff becoming the registered owner of the roof and the 9^th floor of the Building, this practice continues (“the Water and Electricity Charges Point”).

(iii) The government rent and rates of Flat A were paid by the Previous Owners, and have been paid by the plaintiff after the plaintiff’s acquisition of the 9^th floor and the roof of the Building (“the Government Rent and Rates Point”).

8.  The plaintiff has given evidence in the trial.  In his evidence, the plaintiff mentions:-

(a) In 2013, an employee (“the Employee”) of an estate agent company (“the Company”) led him to the Building and showed to him the 9^th floor and the roof.

(b) The Employee told him:-

(i) there were 2 units on the roof and 4 units on the 9^th floor. The owner of the 9^th floor and the roof had oral tenancy agreements with the occupiers of all these units, and the total of the rentals from these 6 units was about HK$13,000;

(ii) the occupiers of the 6 units would pay water and electricity charges to the owner of the 9^th floor and the roof; and

(iii) the owner was selling the 9^th roof and the roof together with the said oral tenancy agreements.

(c) Flat A is an enclosed structure with a locked door. 

(d) After acquiring the 9^th floor and the roof of the Building, the plaintiff could not get any rent from the defendant.  The defendant refused to pay any rent to the plaintiff.

(e) The defendant has paid him some water and electricity charges.

(f) After purchasing the 9^th floor and the roof, he learned that that the Employee had some misconduct and for this reason had been dismissed by the Company.  The plaintiff does not regard the Employee as trustworthy.

(g) In late 2014, the boss of the Company told the plaintiff that the defendant was applying for public housing, and would return Flat A to the plaintiff if the defendant’s application for public housing was successful.

THE DEFENDANT’S CASE

9.  The defendant raises the following in her pleadings:-

(a) MF purchased Flat A in 1992 and allowed members of his family, including the defendant, to live in Flat A.  The purchase is evidenced by 2 handwritten Chinese notes, one signed by Ng Cho Sung（吳造崇）(“Ng”) and witnessed by Chan Wing（陳永）(“Chan”)  (“Note 1”) and the other signed by Cheung Kai Kwong（張啟光）(“Cheung”) and witnessed by Shiu Kam Lun（邵錦麟）(“Shiu”) (“Note 2”).  These 2 notes have never been registered in the Land Registry.

(b) In late 1992, HY and Lee began to live in Flat A until the defendant moved into it in 2001.  Since 2001, the defendant lived in Flat A alone.

(c) MF, HY, Lee and the defendant have never paid rent to the registered owners of the 9^th floor and the roof of the Building.

(d) MF, HY, Lee and the defendant have been in successive exclusive possession of Flat A since late 1992.  The defendant has exclusive possession of Flat A since 2001.

(e) MF, HY, Lee and the defendant have the intention to exclusively possess Flat A at all material times.

10.  The contents of Note 1 are as follows:-

“

证明书

本人吴造崇现将九龍大南亍107号天台铁皮屋约220尺转卖给孙楚明，以后一切铁皮屋的权益归孫楚明所有。特立此据为证。

吴造崇 [HKID No] 1955年5月16日

孫楚明 [HKID No]

证明人  陳永 [HKID No]

1992年9月30日”

11.  The contents of Note 2 are as follows:-

“茲有大南街107號天台其中之一間…… （近大南街）之鉄皮屋售与孫楚明先生，港币弍萬叁仟元正。日後一切與本人無关。

業主： 張啟光 [HKID No]

見証人： 邵錦麟 [HKID No]

1992年12月28日”

12.  The defendant has produced a letter (“the KSH Letter”) dated 23 November 2014 and signed by 林錦東 (“KT Lam”) of 錦秀行有限公司 (“KSH”), the contents of which are as follows:-

“

錦秀行有限公司

本公司茲證明孫惠芳女士從2001年1月20日開始至今向本公司購買石油氣。送石油氣地址為九龍大南街107號天台。

而孫惠芳女士的哥哥孫先生從1994年11月15日開始至2000年向本公司購買石油氣，送石油氣地址同為九龍大南街107號天台。

戒巧玲 [HKID No]

(chop) 錦秀行有限公司

林錦東

2014-11-23”

13.  At the beginning of the trial, Mr Lam applied for leave to call KT Lam as a witness to give evidence to confirm the contents of the KSH Letter.  I granted an adjournment to the defendant to enable her side to prepare a witness statement of KT Lam so that there could be a proper application for leave to file that witness statement.  After the adjournment, the defendant produced a witness statement of KT Lam and an affirmation made by the defendant explaining the delay in making the application.  Having considered the explanation offered by the defendant in her affirmation and the contents of that witness statement, and having considered the submissions from the parties, I refused to give leave to the defendant to file that witness statement.  I am not satisfied that the explanation offered by the defendant is a sufficient and satisfactory explanation regarding the delay.

14.  It is not known on what basis KT Lam can state the matters now in the KSH Letter.  Without having KT Lam as a witness giving evidence on these matters and testing his evidence by cross-examination, it would be dangerous to rely upon the KSH Letter to make any factual finding.  I would not give any weight to the KSH Letter.

15.  The defendant has given evidence.  In her evidence, she says:-

(a) She immigrated to Hong Kong from Mainland China in 2001.  After coming to Hong Kong, she has been living in Flat A.

(b) Flat A was purchased by MF in 1992.  With MF’s consent, HY and Lee moved to live in Flat A in 1994.  When the defendant came to Hong Kong from Mainland China in 2001, with MF’s consent, she has been living in Flat A since then.

(c) Flat A does not have its own water meter but has an electricity-meter. The defendant has paid electricity and water charges to the plaintiff.  The defendant had tried to apply for a separate water-meter in 2006 but the application was not successful.  There were disputes between the plaintiff and the defendant regarding water and electricity supply to Flat A.

(d) The defendant has been continuously ordering LPG from KSH after moving into Flat A in 2001.

(e) The defendant applied for public housing in 2006 but the application was declared as unsuccessful in 2009.  The defendant denies that she has ever said that she would return Flat A to the plaintiff if her application for public housing is successful.

(f) MF, HY, Lee and the defendant always treat Flat A as their own property. They have never paid any rent or occupation fees to anyone.

16.  The defendant has also called MF to give evidence.  In his evidence, MF mentions:-

(a) He purchased Flat A from Ng in 1992 by paying HK$50,000 to Ng.  Ng was living in Flat A at that time.  As Cheung was the registered owner of the roof at that time, MF also made a payment of HK$23,000 to Cheung to purchase the title (業權).  Ng and Cheung have signed Note 1 and Note 2 respectively.

(b) Before purchasing Flat A, Flat A did not have its own water meter and had a sub-meter concerning electricity.  Water and electricity were from the 9^th floor.  MF discussed with Cheung and they agreed that the arrangement could continue.

(c) He ordered LPG from KSH since late 1992.

(d) HY and Lee moved to Flat A in 1994, and the defendant moved into Flat A in 2001.

(e) MF, HY, Lee or the defendant has never paid any rent or occupation fee to the registered owners of the roof or any other persons.  They treat Flat A as their own property.

(f) After the defendant moving into Flat A in 2001, MF transferred the possessory right (擁有權) to the defendant.

17.  The defendant has filed a witness statement of Lee, but Lee has not come to court to give evidence.  Mr Lam tells the court that Lee is unable to give evidence in court due to health reason.  As Lee has not come to court to confirm her witness statement and has not been subject to any cross-examination, Mr Lam fairly submits that he would not ask the court to give any weight to the witness statement of Lee.  I give no weight to that witness statement.

THE PRINCIPLES

18.  Adverse possession does not confer title on the adverse possessor.  It only means that the dispossessed owner is prevented from recovering possession.  See China Field Ltd v Appeal Tribunal (Buildings) (No 2) (2009) 12 HKCFAR 342, 361, footnote 13; see also The Personal Representative of the Estate of Lee Chiu Tai, Deceased and Another v Tsang Loi Ki (DCMP 3485/2000, 26 July 2017), [21]-[23]:-

19.  In order to establish adverse possession, the claimant has to show both the requisite possession and the requisite intention to possess.  Requisite possession is sufficient degree of exclusive physical control of the land in question.  Requisite intention to possess is whether claimant has made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can.  See Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd [2007] 10 HKCFAR 588.

20.  A person who mistakenly believes that he has good title and does not realize that he is a trespasser may still successfully claim adverse possession.  See Cheung Kwong Yuen v Sun Hui Fang (CACV 112/2015, 30 November 2015), per Kwan JA:-

“11. Whether a squatter could establish factual possession and the requisite intention for the purpose of adverse possession is a question of fact depending on the circumstances of the case. There is no rule of law that these elements cannot be established for a person who mistakenly believes that he has good title or that he is a lawful tenant and does not realise he is trespassing on another’s land. As stated by Lord Hope in JA Pye (Oxford) Holdings Ltd v Graham [2000] Ch 676 at §69, the use of the term “adverse” in this context is a convenient label only, in recognition simply of the fact that the possession is adverse to the interests of the paper owner. The right of action of the paper owner is treated as accruing as soon as the land is in the possession of some other person in whose favour the limitation period can run. In that sense, and for that purpose, the other person’s possession is adverse to his. But the question whether that other person is in fact in possession of the land is a separate question on which the word “adverse” casts no light.”

21.  The possession periods by successive squatters can be added up for the purpose of showing adverse possession.  The Limitation Ordinance is not concerned with whether a squatter has acquired a title but with whether the paper owner’s right of action has been barred.  For this purpose, all that matters is that there should have been continuous adverse possession for the period of limitation.  The rights inter se of the successive persons who may have been in possession adversely to the paper owner since the paper owner was dispossessed are for this purpose irrelevant.  See Sze To Chun Keung v Kung Kwok Wai David & Anor (Privy Council) [1997] HKLRD 885, per Lord Hoffmann at 888H-J.

22.  The burden of proving the requisite possession and the requisite intention to possess lies on the person claiming adverse possession.  The evidence adduced by the claimant must be compelling, but the standard of proof is still on the balance of probabilities.  In Tsang Foo v Chu Jim Mi Jimmy [2015] 6 HKC 200, per Chow J:-

“42. The burden of proof of these two basic elements lies on the person claiming adverse possession.  The evidence necessary to establish adverse possession must be “compelling” (Wu Yee Pak v Un Fong Leung (2004) 7 HKCFAR 498, at paragraph 5 per Chan PJ).  This gives recognition to the serious consequence of a finding that the title of a paper owner is displaced by an adverse possessor, although the standard of proof is still the normal civil standard, ie on a balance of probabilities ……”

23.  In respect of the requisite intention to possess, the statements made by the person claiming the possessory title have to be approached with care as these statements are always self-serving evidence.

(a) In Tsang Foo, per Chow J:-

“44.   In relation to the element of “intention to possess”, the adverse possessor must show that he had a “plain and unequivocal intention to exclude the world at large” (Bolton Metropolitan Borough Council v Musa Ali Qasmi (1999) 77 P&CR 36, at 37 per Peter Gibson LJ).  In that case, it was also pointed out that it is not necessary for the adverse possessor to give evidence of his subjective intention.  “Such self-serving evidence is hardly ever likely to be of assistance. The ordinary way in which the relevant intention is ascertained is by inference from the actions of the adverse possessor in the light of all the circumstances affecting the land.”

(b) In Powell v McFarlane (1979) 38 P&CR 452, per Slade J at 476:-

“I would add one further observation in relation to animus possi- dendi. Though past or present declarations as to his intentions, made by a person claiming that he had possession of land on a particular date, may provide compelling evidence that he did not have the requisite animus possidendi, in my judgment statements made by such a person, on giving oral evidence in court, to the effect that at a particular time he intended to take exclusive possession of the land, are of very little evidential value, because they are obviously easily capable of being merely self-serving, while at the same time they may be very difficult for the paper owner positively to refute. For the same reasons, even contemporary declarations made by a person to the effect that he was intending to assert a claim to the land are of little evidential value for the purpose of supporting a claim that he had possession of the land at the relevant date unless they were specifically brought to the attention of the true owner.”

(c) In Wong Tak Yue v Kung Kwok Wai David & Another (No 2) (1997-98) 1 HKCFAR 55, per Li CJ at 69A-C:-

“Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism. The courts would scrutinise the circumstances in which they were made and would give them such weight if any as they may deserve. Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.”

24.  However, the fact that the claimant for a possessory title has proved that he has exclusive possession of the land in question has significance in relation to both the requisite possession and the requisite intent to possession.  Having physical barriers to exclude others from entering the land is the classic way of establishing exclusive possession.  In Gotland Entreprises Ltd v Kwok Chi Yau and Others (CACV 260/2014, 19 January 2016), Lam VP said:-

“29. [counsel] referred us to Powell v McFarlane, supra, in particular what Slade J said on the factual aspect of possession:

“Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.”

……

31. …… [counsel] also referred us to the dicta of Lord Hutton in JA Pye (Oxford) v Graham [2003] AC 419 at paragraph 76:-

“Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess.  It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess.  But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded.”

32. Though the issue that Lord Hutton addressed there was intention to possess (and Lord Browne Wilkinson did explain why it was necessary to have two elements in the concept of possession as a matter of common law in JA Pye (Oxford) v Graham, supra at paragraph 40), it should also be recognized that the two elements are inter-related. Legal possession could only be established when both elements are present. In our judgment, the exclusion of other persons has significance both in relation to the character of the physical occupation and the requisite intent. Thus, in Powell, Slade J alluded at the end of the paragraph cited above to no-one else had done so. Likewise, Lord Hutton in JA Pye referred to using the land in a way in which the owner was excluded.

33. This is not to re-introduce the concept of ouster disavowed by Lord Browne-Wilkinson in JA Pye at paragraph 38.  Rather it stems from the undoubted proposition that possession is single and exclusive.  As said by His Lordship in that paragraph:-

“Except in the case of joint possessors, possession is single and exclusive. Therefore if the squatter is in possession the paper owner cannot be. If the paper owner was at one stage in possession of the land but the squatter’s subsequent occupation of it in law constitutes possession the squatter must have ‘dispossessed’ the true owner …”

34. After rejecting the notion that the squatter must have a positive intention to exclude the owner, at paragraph 43 of JA Pye Lord Browne-Wilkinson endorsed the formulation by Slade J in Powell:-

“… Slade J reformulated the requirement (to my mind correctly) as requiring an ‘intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.’”

35. The significance of physical exclusion of the owner was further alluded to by His Lordship at paragraph 45, after rejecting the dicta of Bramwell LJ in Leigh v Jack 5 Ex D 264:-

“The highest it can be put is that, if the squatter is aware of a special purpose for which the paper owner uses or intends to use the land and the use made by the squatter does not conflict with that use, that may provide some support for a finding as a question of fact that the squatter had no intention to possess the land in the ordinary sense but only an intention to occupy it until needed by the paper owner. For myself I think there will be few occasions in which such inference could be properly drawn in cases where the true owner has been physically excluded from the land. But it remains a possible, if improbable, inference in some cases.” (our emphasis)

36. One must not lose sight of the exclusive character of the occupation in order to establish factual possession.  Not every use or occupation of land can satisfy this requirement.  The Judge gave the example of growing of fruits on a piece of open land.  If a person only plants fruit trees without excluding others from entering the land, he is only using the land instead of occupying the same exclusively.  It is akin to leaving some articles on some private property (where the owner is at liberty to take steps to remove the articles as abatement of trespass) and no matter how long the articles were left there (and not removed by the owner of the land), it would not constitute adverse possession. 

37. Though it is not absolutely essential to have the land fenced off in order to establish exclusive occupation, this is the classic way of doing so.  In the absence of any physical barriers set up to exclude others from entering the land, one must examine what steps were taken by the person claiming exclusive occupation to exclude others.”

25.  With all these principles in mind, I now turn to analyze the evidence.

ANALYSIS

Any adverse inference?

26.  Mr Law submits that the court should draw adverse inferences against the defendant as the defendant has failed to call Ng, Chan, Cheung, Shiu and Lee to give evidence.  Mr Law relies upon Kao Lee & Yip v Koo Hoi Yan & Others [2003] 3 HKLRD 296, [34] and Wisniewski v Central Manchester Health Authority [1998] PIQR 324, 340.  With respect, I am unable to accept these submissions.

27.  In Kao Lee & Yip, Ma J (as he then was) said:-

“None of the Defendants gave evidence. In these circumstances, adverse inferences may be more easily drawn against them and correspondingly, any inferences favourable to KLY can more confidently be drawn as well:- see Polaroid Far East Ltd v Bel Trade Co Ltd [1992] HKLR 447 at 454; Jones v Dunkel (1958-1959) 101 CLR 298. This is of course providing that the rest of the evidence allows such inferences to be drawn and that such evidence is credible in the first place.” (Emphasis added)

28.  In Wisniewski, Brooke LJ said at 340:-

“From this line of authority I derive the following principles in the context of the present case:-

(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4) If the reason for the witness's absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

29.  On the question of drawing adverse inferences by reason of the absence of a witness, the Court of Appeal has given guidance in Li Sau Keung v Maxcredit Engineering Ltd [2004] 1 HKC 434 at 443B, [28], which has been applied by DHCJ Lisa Wong (as she then was) in South China Securities Ltd v Lam Kwen Yuen [2012] 5 HKLRD 524.  In that case, the learned deputy judge said:-

“7. …… I take note, of the principle that where a person without explanation fails to call as a witness a person who he might reasonably be expected to call, it is open to the Court to infer that that person’s evidence would not have helped that party’s case. See, eg Li Sau Keung v Maxcredit Engineering Ltd [2004] 1 HKC 434, 443E–444C, per Le Pichon JA citing O'Donnell v Reichard [1975] VR 916, 929, per Newton and Norris JJ. The same principle would apply to a failure without proper explanation to produce a document or other real evidence that a party might reasonably be expected to disclose.” (Emphasis added)

30.  As to Note 1 and Note 2, Mr Law tells the court that the plaintiff is not saying that these notes are forged documents.  Mr Law says that the plaintiff has no positive case and is merely testing the defendant’s case.  In my view, there is no allegation, let alone evidence, suggesting that the purchase of Flat A by MF in 1992 is untrue or anything stated in these notes is fabricated.  There is no prima facie case on the genuineness of these 2 notes for the defendant to answer.  In these circumstances, to say that the court should draw adverse inferences against the defendant because Ng, Chan, Cheung and Shiu has not come to the trial to give evidence is misconceived.

31.  The defendant has called MF to give evidence in the trial.  MF is a person having personal knowledge of the matters concerning Note 1 and Note 2. In other words, the defendant has arranged a witness having personal knowledge of these notes to give evidence on the documents.

32.  Further, during cross-examination, Mr Law has not asked the defendant or MF any question concerning why Ng, Chan, Cheung and Shiu are not witnesses in this case.  Without offering any opportunity to the defendant or MF to give an explanation as to not calling these witnesses, it would not be fair for Mr Law to invite the court to draw adverse inferences against the defendant because of the absence of these witnesses in the trial.

33.  In respect of the absence of Lee, Mr Law submits that the explanation offered by Mr Lam, ie, Lee is unable to come to court to give evidence due to health reason, is not supported by evidence.  Mr Law invites me to draw the adverse inference that Lee in fact has never resided in Flat A.  However, there is no evidence suggesting that Lee has never lived in Flat A.  Further, the explanation offered by Mr Lam was given at the beginning of the trial.  Mr Law has not suggested to the defendant while cross-examining her that regarding the absence of Lee in the trial, the explanation offered by Mr Lam upon the defendant’s instruction is untrue.

34.  For the reasons above, I reject the submissions on adverse inferences made by Mr Law.

Findings of facts

35.  It is common ground that Flat A is an enclosed structure on the roof of the Building with a locked door.  Further, the defendant has never paid any rent or occupation fee to the plaintiff.

36.  I am of the view that the plaintiff is an honest witness, but many matters mentioned by him are hearsay and he does not have much personal knowledge concerning Flat A.  His evidence therefore carries little weight.

(a) He just visited the 9^th floor and the roof of the Building once before purchasing the same.  All the matters concerning the 9^th floor and the roof, including Flat A, were told to him by the Employee.  However, after purchasing Flat A, the plaintiff discovers that the Employee is not trustworthy.

(b) That the occupier of Flat A had paid rent to the Previous Owners of the 9^th floor and the roof of the Building is something told by the Employee to the plaintiff.  There is no document showing any payment of rent by any occupier of Flat A.  Further, in the plaintiff’s own words, the Employee is not trustworthy.  In my judgment, there is no satisfactory evidence showing any payment of rent or occupation fee by any occupier of Flat A to any of the Previous Owners.  

(c) As to the payment of water and electricity charges by the occupier of Flat A, these matters are handled by his wife and the plaintiff does not know the details.

37.  The defendant impresses me as a simple and straightforward person.  She is an honest and reliable witness and I accept her evidence.

(a) Mr Law makes the point that as to when HY and Lee started to live in Flat A, Lee has given inconsistent versions in various places:-

(i) Lee mentioned in §4 of her witness statement that HY and Lee moved into Flat A in late 1994.

(ii) In the amended defence, Lee said that they moved into Flat A in 1992.

(iii) In an affirmation made by the defendant on 25 November 2014 and filed in LDPD 1740/2014 (“the Affirmation”), the defendant said in §6 that after MF purchasing Flat A in 1992, HY lived in Flat A, and thereafter Lee also moved into Flat A.

(b) I do not regard the defendant’s credibility and reliability have been impaired by the aforesaid in any way.

(i) The defendant has said under cross-examination that she made a mistake in the amended defence.  MF purchased Flat A in 1992 and HY moved into Flat A in 1994.  In the amended defence, when she talked about the year when HY moved into Flat A, she mistakenly put down 1992.  The correct time should be 1994.  I accept her explanation.

(ii) What the defendant said in §6 of the Affirmation is that HY moved into Flat A after MF purchasing the same in 1992.  The defendant did not mention the specific time when HY moved into Flat A in that paragraph.

(iii) While the defendant said in §4 of her witness statement that HY and Lee moved into Flat A in late 1994, she did not say that they moved into Flat A at the same time.  I do not think §6 of the Affirmation is inconsistent with §4 of the defendant’s witness statement.

(iv) Further, MF has also given evidence that HY and Lee moved into Flat A in late 1994.  The defendant’s evidence on this point is supported by MF’s evidence.

(c) Mr Law also submits that the earliest documents produced by the defendant proving her occupation of Flat A are documents in or after 2006, and this casts doubt on the veracity of the defendant’s saying that she moved into Flat A in 2001.  I do not agree.

(i) The defendant says that she has not kept all her documents.  I have considered the documents referred to by Mr Law.  It is obvious that the defendant does not have kept the documents concerning Flat A in a systematic way, and I accept that the defendant has not kept all such documents.

(ii) Among the documents produced by the defendant, there is a handwritten demand note to the defendant concerning electricity fee (see trial bundle, p.138).  The date of that demand note is 29 February.  It would not be correct to say that the demand note must be a document after 2006.  It is possible that the correct date of the demand note is 29 February 2004.  However, I do not base upon this demand note to make any finding.

(iii) I am of the view that the defendant’s occupation of Flat A began in 2001 is clearly supported by MF’s evidence.  MF purchased Flat A in 1992.  No doubt he has full knowledge as to who moved into Flat A at what time.  For the reasons set out below, I accept MF’s evidence.  With the support of MF’s evidence, I hold that the defendant’s occupation of Flat A started in 2001.

38.  MF is also an honest and reliable witness and I accept his evidence.

(a) MF’s purchase of Flat A in 1992 is clearly supported by Note 1 and Note 2.  MF tells the court that purchasing Flat A in 1992 is the first experience of purchasing a real property in his life.

(b) Under cross-examination, MF agrees that in 1996, he purchased another property, namely Room 2405, 24/F, Sun Hing Building, Nathan Road (“the Sun Hing Unit”).  He retained lawyers to handle that purchase.  I note that the address of the Sun Hing Unit is the address given by MF in his witness statement dated 14 December 2016.

(c) Mr Law submits that it is absurd that MF conducted the 1992 purchase in such an informal way and without engaging any lawyers, and the absurdity is amplified by the fact of retaining lawyers to conduct the 1996 purchase.  With respect to Mr Law, he has not asked MF why the 1992 purchase and the 1996 purchase were handled in two different ways during the cross-examination. Without giving the witness an opportunity to offer an explanation on the question, it would not be fair for him make the aforesaid criticism during his final submissions.

(d) Under cross-examination, MF says that after 2001, he has not lived in Flat A.  Mr Law draws MF’s attention to a deed poll dated 16 February 2006, in which MF announced that he had renounced the use of his former name Suen Chor Ming and adopted the name Suen Ming Fai.  In the deed poll, MF put down 10^th floor of the Building as his address.  Mr Law suggests to MF that on the date of the deed poll, MF still regarded Flat A as his residential address.  MF said that he was unclear about this.  In re-examination, Mr Lam asked MF whether he could remember where he lived in 2006.  MF replied that he could not clearly remember.

(e) I have considered these exchanges.  I have also considered that in the defendant’s evidence, the defendant says that she has been living in Flat A alone since 2001.  In my judgment, it would not be a surprise for MF giving Flat A as his address in the deed poll.  After all, Flat A was purchased by him and given by him to the defendant.  Although MF has purchased the Sun Hing Unit in 1996, MF may still treat Flat A as one of his residences.  However, treating Flat A as one of his residences means that he may return and live therein at any time, and does not necessarily mean that he actually living therein, or living therein for most of the time.

(f) In any event, as MF has already transferred the “possessory right” of Flat A to the defendant in 2001, whether MF was still living in Flat A in 2006 would not have any impact on the outcome of this case.

Requisite possession

39.  Based upon the evidence before me, I find that Flat A was in MF’s exclusive possession after he purchasing the same in 1992.  In 2001, he transferred the possessory right（擁有權）to the defendant.

40.  Mr Law has spent much time in his final submissions on a point which I would refer to as “the licensee point”.  Relying upon the principles summarized by Chow J in Tsang Foo at [48]-[50] (which I fully accept), Mr Law submits that the defendant is merely possessing Flat A as a licensee of MF, and hence the defendant’s possession cannot be the requisite possession for the purpose of establishing adverse possession.

41.  I ask Mr Law whether the licensee point is an unpleaded point.  Mr Law agrees that this is an unpleaded point but is developed during the evidence stage.  With respect to Mr Law, as the licensee point has not been raised by the plaintiff in pleadings, in my judgment the licensee point is not open to the plaintiff.  Issues in a trial are defined by pleadings.  One cannot slip in an unpleaded issue by saying that there is evidence on the issue.  In Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663, Ma CJ said:-

“21. It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited [2005] 2 HKLRD 795, 799 [6(1)]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced. As the Court of Appeal remarked in Wing Hang Bank Limited v Crystal Jet International Limited:-

“(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues.  Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained.  It will simply not do for unpleaded issues to be ‘slipped in’ when evidence is being given in the hope that the other side is not sufficiently alert to object.”

22. …… one does not sift through the evidence adduced in a trial in the hope that something was said that can conceivably found a cause of action. Issues, I would reiterate, must be properly pleaded unless for some reason the pleadings have assumed a less significant role in the proceedings.” (Emphasis added)

42.  The purpose of pleadings is to define the real issues in dispute and to ensure that the litigation is conducted in a fair way.  In Chan Kong v Chan Li Chai Medical Factory (Hong Kong) Ltd. [2009] 2 HKLRD 455, Yuen JA said:-

“15. …… It is well established that pleadings need to be clear - because pleadings are the foundations on which the rest of the action stand. The reason why parties to litigation must ensure that the real issues in dispute are defined in advance in the pleadings is so that there is an unambiguous framework for the many interlocutory steps that follow in an action, such as discovery of documents, interrogatories and witness statements, as well as for the conduct of the trial itself. A statement of claim should make it clear to the reader what the plaintiff's cause of action is, and it should set out the material facts which provide the basis for him to pursue that cause of action. It is not adequate for a plaintiff just to set out his story extensively and then to allege a number of breaches of rights for which he claims relief. Put another way, it should not be left to the reader to guess how the dots should be connected.

16. The more complex the facts and the more complicated the claim, the more important it is for the pleader to get it right. That is because the more obtuse the pleading, the more capacity there is for genuine misunderstanding or specious opportunism. And the more blind alleys are left in a pleading, the more expensive and time-consuming the litigation will be.” (Emphasis added)

43.  Without raising the licensee point in pleadings, the defendant has not been given any prior notice that this point would be taken by the plaintiff in the trial, and the defendant has not been given any opportunity to adduce evidence to address on the licensee point.  In his witness statement, MF has expressly mentioned that he transferred the “possessory right”（擁有權）of Flat A to the defendant in 2001.  If the licensee point has been raised by the plaintiff at the beginning of these proceedings, the defendant may arrange MF to say more on the “possessory right” transferred by him to the defendant in 2001, including whether the “possessory right” is a mere licence, whether the “possessory right” can be taken back by MF at any time without the defendant’s consent, and whether the “possessory right” can only be returned to MF with the defendant’s agreement.

44.  I appreciate that MF in his evidence mentions that he still regards himself as the owner of Flat A after 2001.  The defendant also in her evidence says that she is helping his brother to look after Flat A.  That may mean that the defendant is merely MF’s licensee.  However, that can also mean that if the defendant does not need Flat A at a time in future, the defendant has to return possession of Flat A to MF and not to anyone else.  If the latter scenario is the real situation, the relationship between MF and the defendant may not be licensor and licensee, as MF may not be able to terminate the arrangement at any time as he wishes.  All these have not been explored during the evidence stage, because the licensee point has not been raised in pleadings at all.

45.  For the reasons above, the licensee point is not open to the plaintiff.

46.  In my judgment, the exclusive possession of Flat A started from 1992 and there has not been any interruption of the exclusive possession since then. The exclusive possession enjoyed by MF from 1992 and transferred by MF to the defendant in 2001 constitutes the requisite possession for the purpose of adverse possession.

Requisite intention to possess

47.  The exclusive possession as found above is also evidence on the requisite intention to possess.  See Gotland Enterprises Ltd, supra.

48.  The requisite intention to possess is strengthened by the fact that there is no payment of any rent or occupation fee by MF or the defendant to any of the Previous Owners, and the defendant has refused to pay any rent or occupation fee to the plaintiff at all times.

49.  As to the 3 points raised by the plaintiff in pleadings trying to counter the requisite intention to possess (see paragraph 7(e) above), I am of the view the plaintiff is unable to succeed on any of these point.

(a) The Oral Tenancy Point is not supported by any reliable evidence.

(b) There is no substance in the Water and Electricity Point.  In the light of MF’s evidence, after selling Flat A to MF in 1992, Cheung agreed to continue to supply water and electricity to Flat A.  This practice is just a matter of convenience and continues over the years.  This does not mean that MF and later the defendant are possessing Flat A with the consent of the registered owner. This also does not mean that MF and the defendant have ever acknowledged the title of the registered owner.  

(c) There is also no substance in the Government Rent and Rates Point.  I note that there is a copy of a demand note for rates on p.190 of the trial bundle, but the subject property described on that demand note is “大南街107號十樓”, which means the 9^th floor of the Building in English.  That demand note does not concern Flat A.

Both Mr Law and Mr Lam agree with this observation, and both of them agree that there is no evidence showing that any government rent or any rate has ever been levied on Flat A.  I note that the two counsel have agreed that the annual ratable value of Flat A is less than HK$240,000.  However, that does not mean that any rate has been levied on Flat A.  While there is no evidence showing that government rent and rates have ever been levied on Flat A, obviously it would not be correct for the plaintiff to say that the government rent and rates of Flat A were paid by the Previous Owners and the plaintiff.

(d) Mr Law submits that MF and the defendant have never made any enquiry to discover whether government rent and rates have been levied on Flat A.  With respect, I do not see how this point can contradict the requisite intention to possess Flat A to the exclusion of all others including the true owner.  In my judgment, the requisite intention to possess has been clearly demonstrated by the exclusive possession and the non-payment of rent or occupation fee described above.

Adverse possession established

50.  Limitation Ordinance, s 7(2) provides:-

“No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person” (Emphasis added)

51.  By the agreement between Cheung and MF as set out in Note 2 (“the Agreement”), while Cheung was the registered owner of the 9^th floor and the roof of the Building, I am of the view that Cheung was not entitled to sue MF to recover possession of Flat A.  To do so would be breaching the Agreement, which was binding upon Cheung and MF, and Cheung had to observe the same.

52.  However, Wan Kwok Chow (“Wan”) purchased the 9^th floor and the roof of the Building from Cheung at HK$500,000 and became the registered owner of the same on 30 November 1995.  As Wan is a subsequent bona fide purchaser for valuable consideration, the Agreement is not binding upon Wan, and Wan has a right to sue MF to recover possession of Flat A.  See Land Registration Ordinance, s 3(2):-

“All such deeds, conveyances, and other instruments in writing, and judgments, as last aforesaid, which are not registered shall, as against any subsequent bona fide purchaser or mortgagee for valuable consideration of the same parcels of ground, tenements, or premises, be absolutely null and void to all intents and purposes” (Emphasis added)

53.  In my judgment, the limitation period started to run on 30 November 1995, and the 12-year period expired on 30 November 2007.  I am satisfied that MF and subsequently the defendant have demonstrated the requisite possession and the requisite intention to possess throughout these 12 years, and the defendant has established her claim for adverse possession.

CONCLUSION

54.  For the reasons above, I dismiss the plaintiff’s claim and give judgment to the defendant.  I make the following declarations:-

(a) it is declared that the plaintiff’s title to Flat A has been extinguished and that the plaintiff is statute-barred from recovering possession of Flat A by virtue of the Limitation Ordinance; and

(b) it is declared that the defendant has acquired a possessory title to Flat A.

55.  Both Mr Law and Mr Lam have agreed that costs should follow the event, with a certificate for counsel.  I order that costs of the plaintiff’s claim and costs of the defendant’s counterclaim (including all costs reserved, if any) be to the defendant, with a certificate for counsel, to be taxed if not agreed.

56.  I thank Mr Law and Mr Lam for the helpful assistance rendered to this court.