SHUM CHIN KIT v. The Estate of LOK LAI SHEUNG, Deceased

HCMP1647/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.1647 OF 1998

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J U D G M E N T

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1. This is an originating summons first taken out by the plaintiff on 20 April 1998 against the defendant Lok Lai Sheung. Pursuant to an order made by Yuen J on 15 September 1999, an amendment was made to the Originating Summons by which the defendant was stated to be the estate of Lok Lai Sheung, deceased. The judge also directed that the Official Solicitor be appointed to defend the action on behalf of the estate of the deceased. At first, the Official Solicitor declined to act because the action was commenced against the defendant on the basis that she was still alive despite the suggestion that she should be presumed dead. However, the Official Solicitor eventually agreed to act due to the amendment made to the Originating Summons. Now counsel, Mr Horace Wong appeared for the defence.

2. The case was about a piece of land known as Lot 126 in Demarcation District, Ngong Ping, Lantau Island, Hong Kong ("the property"). It was assigned by one Yiu Chung to Lok Lai Sheung on 30 May 1938. Hence the latter was and remains to be the registered owner of the property. By his application, the plaintiff prayed for the following orders, based on the principle of adverse possession:

a. A vesting order for all the interest in the land in question to be vested in the plaintiff.

b. An order that the name of the plaintiff be entered in the register kept in the District Land Office as the owner of the land.

c. A declaration that the defendant had lost her right to recover the land.

d. A declaration that the plaintiff has been in adverse possession of the land and that the defendant's title has been extinguished by virtue of section 17 of the Limitation Ordinance, Cap.347.

3. The plaintiff had filed a total of four affirmations in support of his application. They were dated 20 April 1998, 17 October 1998, 14 September 1999 and 26 February 2001. The following is a summary of the plaintiff's account of the relevant events as disclosed in these affirmations :

a. The property is a piece of land immediately adjacent to Lin Chee Temple (蓮池寺), ("the temple") on Lot 232 in Demarcation District, Ngong Ping, Lantau Island. The founder of this temple was the late Yuen Hang (圓行法師). He was the plaintiff's teacher. The plaintiff first came to live in the temple in 1976 and he was the deputy supervisor (副主持) since that time.

b. The plaintiff noticed the presence of a hut on the property. He learned from his teacher that the hut belonged to a Buddhist nun (who was said to be already in her seventies by 1976). The plaintiff was further told that the nun had left Lantau Island in or about 1946 after the Japanese occupation in the Second World War and her hut had been left deserted since then. The plaintiff's teacher himself had passed away in October 1989.

c. The plaintiff said that in 1977, he had demolished the original hut and replaced it with a new one. He stored some of his personal belongings inside the hut. When there were too many guests visiting the temple, he would let the guests use his room in the temple and he would sleep in the hut. The hut was later destroyed by a typhoon, but he managed to build another one in its place. This is the hut shown in the photographs produced. He had been paying the Crown Rent for the property since 1977. From 1977 onwards, he had been using the hut continuously as his own storage and sleeping quarter. His possession had never been interrupted or interfered with by any person.

d. He and the members of the temple wish to build an extension of the temple over the property to be used as a place for penance (靜室). He had made enquiries about it as early as 1995/96 but the District Lands Office required prove of ownership before considering any application for expansion.

4. The plaintiff stated that his application was not an academic exercise. He made the following explanation in his 2nd affirmation as to why he has to take out the present proceedings :

"b. It has long been the wishes of our members to extend the area of Lin Chi Temple by building an annex with a new two storeys building with some penance rooms.

d. Since the Lin Chi Temple is a charitable organization with no asset of its own the construction costs has to come from members' donation.

e. We have now secured from members with pledges for donation of the whole construction costs but all of them insist such donation will come only after I can obtain a successful declaration under the present application. These members do not want the money to be spent on construction costs will benefit the registered owner Madam Lok Lai Sheung or Mui Tung a Buddhist Nun (尼姑) who had deserted the subject land for more than 50 years.

f. It is my intention that if the declaration is grant in my favour I will execute a proper assignment in due course transferring all my estate right title and interest in the subject land to Lin Chi Temple absolutely for charity and the promotion of Buddismt (SIC).

g. To the best of my information and belief the registered owner Madam Lok Lai Sheung was a Buddhist nun. She was already in her late seventies when she left Lantau Island in around 1946. It is safe to assume she must have been dead by now. Being a Buddhist nun with no known relative living in Lantau Island or in Hong Kong it is not too speculative to assume the Government may one day resume the subject land on notice that the registered owner had past away with no beneficiary surviving.

h. I am a bachelor living in Hong Kong alone and a ardent Buddhist disciple (居仕). My family consisting of my mother two sisters and a brother are all Austrian Citizen living in Austria. It is also my intention to migrate to Austria next year to join them. If this Honorable Court refuse my application now then the chain for adverse possession by me continuously for over 20 years as against the registered owner Madam Lok Lai Sheung (who can safely assume has been dead) will break. This will result in the subject land unable to be usefully disposed of in future for having a defect in title."

5. The application first came before me on 17 November 2000. The matter was adjourned for the plaintiff to make further enquiry with the District Lands Office regarding their stance about the re-development project. The plaintiff, having made enquiry with the department, filed the 4th affirmation to support his case. The hearing resumed on 19 June 2001 and I heard further submissions from counsel.

The plaintiff's case

6. Counsel for the plaintiff submitted that based on the information disclosed in the affirmations, the plaintiff should be able to satisfy the court on the requirements of adverse possession, as he had been in possession of the property and had the intention to possess it since 1976. The basis of the submission is as follows :

"...

a. he had erected his own hut on the property, and has had been using it as a sleeping quarter as well as storage place;

b. the property was effectively delineated by fences surrounding it, although not actively enclosed by the Plaintiff himself;

c. the immediately neighbouring residents (being also Buddhist disciples) knew of the Plaintiff's possession of the property, and had never interfered with it since he took possession of the property;

d. he had continued to pay government rent;

e. he intends and has in fact applied on behalf of the Lin Chi Temple to erect an extension of the Temple on the suit property."

7. Counsel further argued that the plaintiff's application should not be taken as an academic exercise. There was a practical need to obtain the orders sought. In this regard, I gather that counsel was mainly relying on four matters :

a. there was a definite plan to erect an extension of the temple on the property, which would be highly unlikely to materialize if the orders were not granted;

b. the latest view taken by the District Lands Office, as shown in the letter dated 17 November 2000, was that unless the orders sought were obtained and registered in the Land Registry, the government would not consider the plaintiff's application for the development of the lot;

c. donations would not be forthcoming unless the plaintiff's title could be established; and

d. the government may seek to resume the property since it has been deserted by the registered owner for so long.

8. On the issue of whether a declaration should be granted when there was no actual dispute before the court, counsel for the plaintiff had urged me to adopt the approach in the case of West Ham Corporation v. Sharp [1907] 1 KB 445. Counsel proposed that a practical need would be sufficient for the court to make a declaration, alternatively, the test was simply whether it was a "useful and convenient course to adopt" in granting the orders. He argued that although there was no actual dispute in relation to the property, the court should nevertheless adjudicate on the application and grant the declarations and the orders.

The "defence" case

9. Mr Wong, for the defence, made no particular submissions regarding the factual account given by the plaintiff in his affidavits, but still, he invited the court not to grant the declarations. It was submitted that there was no bona fide dispute in this case which could invoke the court's jurisdiction to make the declarations. The defendant or her estate had never made any claim against the plaintiff. The court's function was to resolve real disputes that had arisen between parties and not to make declarations on academic or hypothetical questions. On this point, counsel wish to rely on the judgment of Deputy Judge Chung, (as he then was) in Chan Kam Kee v. Chan Kam Nan [1998] 3 HKC 417.

10. Counsel contended that what the plaintiff had done was just to provide an explanation as to the commercial reasons for his application. However, the proposed future development could not create a present dispute which require the court's consideration and decision. It might, indeed, suit the plaintiff's convenience to obtain the orders now, and there might well be some third parties who were interested in the project. But these could not constitute valid reasons to invoke the court's power to make the declarations. There was no genuine dispute.

11. Counsel further submitted that even assuming the plaintiff had already acquired a squatter title to the property, he would not be entitled to ask the court to elevate such a title by "vesting" the property on him. There was no cause and actually no jurisdiction for the court to make such a vesting order in the circumstances. The present case did not fall within any of the situations set out in section 45 of the Trustees Ordinance (Cap.29) for the making of a vesting order.

12. Furthermore, it would also be inappropriate to ask the court to substitute the plaintiff's name in place of the defendant in the District Land Registry. Counsel pointed out that even assuming that the plaintiff had indeed acquired a squatter title, his title would still be different from that of a government lessee and it would not be right to treat him as if he was a substitute of the defendant in the government lease. There was no privity of contract between the plaintiff and the government. As between the defendant and the government, the defendant's lease could well be subsisting notwithstanding the acquisition of the alleged squatter title by the plaintiff. He might have ousted the defendant but not the government. Further, the Hong Kong land registration system involved the registration of instruments, not title. The acquisition of a squatter title to the property would not confer a right of registration.

13. Counsel also queried the locus standi of the plaintiff in making the application. He invited the court to consider the position of the temple which was not a party to the proceedings. Based on the plaintiff's account, it appeared that the plaintiff was actually possessing the property on behalf of and for the benefit of the temple. It would not be right to grant the declarations without joining the temple as the latter might have derived an interest, through the plaintiff, in the property.

Is the present case an academic exercise?

14. The plaintiff stated that there was a real and practical need to obtain the declarations sought because of the redevelopment project and he had the full support of the temple and its members towards this end. I could find no basis to doubt the good intentions of the plaintiff for making the application. He was eager to obtain the title to the property so that the facilities of the temple could be expanded. However, on this issue, I have to agree with Mr Wong that there is no real dispute for the court to decide.

15. The authority cited by the plaintiff, i.e. West Ham Corporation v. Sharp, was dealing with a situation entirely different from the present case. In Sharp, the plaintiff, which was an urban authority, sought a declaration that they were entitled under section 13 of the Private Street Works Act 1892 to a charge on premises for the apportioned expenses incurred by the plaintiff in executing works under the Act, and payable by the defendant. They also asked, inter alia, for an enquiry whether there were any encumbrances affecting the premises and an order that the premises might be sold. In the present case, however, the plaintiff was asking for the property's title itself.

16. In my view, the judgment in Chan Kam Kee is more relevant to our case. It reiterated the basic principle that :

" The court should exercise its discretion against the grant of a declaration when the order sought was academic or involved a hypothetical question. A declaration would not be made against a person who had asserted no right against the plaintiff nor formulated any specific claim, nor where there was no breach and no threat or intention to commit a breach of agreement. The evidence of the present case did not show that anyone, let alone the defendant, had asserted any right or raised any claims against the plaintiff (at 421H-I, 422C-D)."

17. In the present case, the plaintiff said that once he got the title, he would assign the property to the temple. But this is in effect asking the court to facilitate a possible future transaction. The suggestion that no one would make donations until the plaintiff's title is confirmed is neither here nor there. The donations are not intended for the plaintiff personally anyway but for the temple and whether the temple will get the property remains a contingency.

18. The plaintiff said he was also concerned that the government might take steps to resume the land. But as counsel for the defence submitted, the lease would continue to subsist as between the defendant and the government, notwithstanding the acquisition of the alleged squatter title by the plaintiff. If the government really decides to resume, and the plaintiff believes he has a proper title, perhaps then there will be a real dispute for the court to resolve. As I have put to the plaintiff during submission, arguably, if the plaintiff now takes steps to 'sell' or 'transfer' the property to the temple, and the temple raises requisition on his title, then there might also be a dispute for the court to resolve, if the matter is taken to court. In the present circumstances, I tend to agree with counsel for the defence that there was no genuine dispute before the court to make the declarations sought.

Is there adverse possession?

19. Assuming that I was wrong on the hypothetical nature of the case and that I should, if other conditions are satisfied, grant the declarations, then I must consider the issue of adverse possession. I do not think there is any dispute on the general principles of the concept of adverse possession. The possession of the land by the squatter must be adverse and the squatter must show either :

a. that he has dispossessed or ousted the owner; or

b. that there has been a discontinuance or abandonment of possession by the owner followed by an assumption of possession by the squatter. In this regard, the squatter must prove actual possession and the intention to possess to the exclusion of all others, including the owner. (Hong Kong Land Law, 2nd edition, 1997, page 163)

The principle of possession in these circumstances had been clearly explained in Powell v. Mcfarlane (1979) 38 P&CR 452 at 470 :

" (3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. ... It is impossible to generalise with any precision as to what acts will or will not suffice to evidence factual 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.

(4) The animus possidendi, which is also necessary to constitute possession, was defined by Lindley M.R., in Littledale v. Liverpool College (a case involving an alleged adverse possession) as 'the intention of excluding the owner as well as other people.' ... What is really meant, in my judgment, is that the animus possidendi involves the 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.

The question of animus possidendi is, in my judgment, one of crucial importance in the present case. An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment, is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not 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, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner."

The locus standi of the defendant

20. Before going into the issue of possession, I find there is substance in Mr Wong's query as to the capacity of the plaintiff in occupying the property. It could be said that his claim to the property was not really made in his personal capacity but for the benefit and on behalf of the temple. His interest in the property does seem to be arising from and directly linked to his position and association with the temple. I doubt if this is an adverse possession situation if the plaintiff does not assert his own personal right and interest to the property. Although I do not necessary agree that the temple should be joined as a party at this stage, but I do have reservation whether the plaintiff has the clear locus standi to ask for the declarations.

Is there possession of the subject project in question?

21. In relation to the issue of possession, there are two preliminary matters which came to my attention and they tend to raise some uncertainty regarding the nature of the alleged possession of the property by the plaintiff :

a. From the photographs, the hut, which seemed to be an enclosed structure without any windows, was only used occasionally by the plaintiff as a quarter when he allowed others to use his room in the temple. It was said that the hut was also used for storage but the photographs did not show it;

b. it appeared that the plaintiff's main interest was the use of the hut only, and nothing was done to the land except keeping the status quo by building the hut. It is unclear whether he had been in possession of the whole property.

Is there intention to possess evinced by the plaintiff?

22. Assume the plaintiff had been in possession of the whole property, there remains the question of intention. In May 1996, the plaintiff had written to the District Lands Office to make enquiries about the prospect and procedure for development. The plaintiff had filed this letter as an exhibit to the 3rd affirmation. But the Lands Department's record of the plaintiff's letter was different. I noted that the one filed with the affidavit was not a copy of the original and the plaintiff had stated that it was a reconstruction from memory. A copy of the original letter was apparently sent to the plaintiff's solicitors by the District Lands Office together with their reply dated 18 December 2000. I was given a copy of this letter at the resumed hearing. What the plaintiff had actually written is this :

"敬啟者：

本人受大嶼山昂平126地段業主之委托，進行重建事宜。故敢請貴署詳示

1. 該地段東﹑南﹑西﹑北之界標。

2. 該地段可容許建築之高度。

如蒙賜示，不勝感荷。

此致 敬候

時安

岑展傑上
九六年五月十四日

地址：大嶼山昂平蓮池寺 "

23. I would leave aside the defence's criticism that the plaintiff had been less than frank about the material in support of the application. The main point is that the letter reveals a situation that in 1996, the plaintiff still recognized the right of the landlord and this is inconsistent with his claim of adverse possession in relation to the property. In my view, this reference to the owner of the property had negated or rendered the plaintiff's intention to possess the property ambiguous.

24. I consider this to be a declaration against interest. In this regard, I found I am bound to consider and apply the principles enunciated by the Court of Final Appeal in the case of Wang Tak Yue and Kung Kwok Wai & Another (No.2) CACV32/1999. The headnote had aptly summarized the position and I will recite the relevant parts here :

"...

(5) A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess (Powell v McFarlane (1979) 38 P & CR 452, R v Secretary of State for the Environment ex p Davies (1990) 61 P & CR 487, Buckinghamshire County Council v Moran [1990] Ch 623 followed).

(6) Adverse possession could be described as 'possession as of wrong' and with limitation it was the intention of the squatter that was essential (Buckinghamshire County Council v Moran [1990] Ch 623).

(7) The question of intention to possess, as with any other question of intention, was one of fact.

(8) Where the occupier had made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the court 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 might deserve. Conversely, where the occupier had made statements as to what was his intention and such statements were against his interest, the court would usually accord to them considerable weight.

(9) D's affirmation and that of his daughter established as a matter of fact that since the expiry of the seven-year tenancy in April 1964, his intention had been that he was willing to pay rent to the owners if they had requested payment and that he was ready and able to do so. These statements on affirmation were against interest and the Court would give them considerable weight. Such an intention was plainly and completely inconsistent with the intention to possess which was requisite for establishing adverse possession and D had therefore failed to show an arguable case on this essential ingredient.

..."

25. Applying the above principles, I came to the conclusion that the plaintiff had failed to establish a crucial element that he had the necessary intention to possess the property to the exclusion of all others, especially the owner, at the material time. Even if it could be argued that the plaintiff had the necessary intention afterwards, but then there is the question of when the limitation period begins to run.

26. Furthermore, I also agree with Mr Wong that, in any event, the request for a vesting order is inappropriate and so is the request to enter the plaintiff's name as the owner of the property in the register kept in the District Lands Office. As to the declaration of entitlement base on the principle of adverse possession, I am not satisfied that the plaintiff had proved his case for the above reasons.

27. In the circumstances, this application must fail, although I appreciate the effort of the plaintiff to promote religious services. Here my role is not to assist the plaintiff to acquire title to the property for his charitable object but to consider whether the evidence justified his claim. I would dismiss the application accordingly.

28. I would, however, make one further observation although the matter was not raised during submissions. The defendant in this case is stated to be the estate of Lok Lai Sheung, the deceased. On reflection, I am not sure on what basis should I accept the death of the defendant, and if she is presumed dead, what would be the operative date. As Godfrey J (as he then was) stated in In the matter of the estate of Yu Leung Fong, HCMP1130/1991, that there was no inherent jurisdiction in the court to entertain proceedings ex parte by an applicant to ask for a declaration that a particular person is to be presumed to be dead. In his judgment, the learned judge had pointed out how the issue of a person's presumed death could be dealt with in the court, but I am not aware how the present case has satisfied the requirements, as there was no grant being sought in relation to the estate of Lok Lai Sheung. (Rule 52 of Non-Contentions Probate Rules.) Considering, however, that I am not minded to grant the declarations anyway, I do not intend to take this matter further.

Costs

29. I would make the order nisi that the costs of this application be to the defence, to be taxed if not agreed. This order shall be made absolute 14 days after handing down of this judgment. Further submission on this matter shall be, unless otherwise directed, in writing.