LAU CHAU PIK, the person appointed to represent the estate of CHOW KAM YUK, DECEASED v. LEUNG MO TIN AND OTHERS

DCCJ 4261/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4261 OF 2014

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JUDGMENT

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Introduction

1.  Madam Chow Kam Yuk (“Madam Chow”) commenced this action on 6 November 2014, claiming possessory title to the following 2 pieces of land:-

(a) a portion of the remaining portion of Lot No 761 in DD 95, Sheung Shui, New Territories, Hong Kong (“the 1^st Land”), which is delineated and hatched pink in the survey plan annexed to the statement of claim (“the Plan”);

(a) a portion of Lot No 765 in DD 95, Sheung Shui, New Territories, Hong Kong (“the 2^nd Land”), which is delineated and hatched yellow in the Plan.

2.  The 1^st, the 2^nd, the 3^rd and the 4^th defendants are the registered owners of Lot No 761 in DD 95 and Lot No 765 in DD 95.  They are tenants in common in equal share.

3.  Madam Chow passed away on 11 February 2016.  By the order of court made on 25 May 2016, Madam Lau Chau Pik (“Madam Lau”, daughter of Madam Chow) was appointed as the representative of Madam Chow’s estate for the purpose of carrying on these proceedings.

4.  On 1 June 2017, upon the joint application made by the plaintiff and the 3^rd defendant, the court made a consent order, in which the court declared that the plaintiff has established a possessory title to the 1^st Land and to the 2^nd Land vis-à-vis the 3^rd defendant, and dismissed the 3^rd defendant’s counterclaim.  In the circumstances, this trial only concerns the 1^st, the 2^nd and the 4^th defendants.

5.  Having read the evidence produced by the plaintiff, I am satisfied that the plaintiff has given notice of these proceedings to the 1^st, the 2^nd and the 4^th defendant by substituted service as ordered by the court.  The 1^st, the 2^nd and the 4^th defendants have never filed any acknowledgement of service in these proceedings. 

The principles

6.  The principles concerning adverse possession have been authoritatively stated by the Court of Final Appeal in Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd [2007] 10 HKCFAR 588, in which Nazareth NPJ in giving the reasons for the judgment of the court said:-

“7. The principles for the application of ss. 7(2), s. 17 and the associated provisions of the Limitation Ordinance are well settled. They were formulated and set out by Slade J in Powell v McFarlane [1977] 38 P & CR 452, approved by the House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, and adopted by this Court in Wong Tak Yue v Kung Kwok Wai (1997-98) 1 HKCFAR 55. Their application has not been disputed in these proceedings, and they have been relied upon by both parties. The authorities mentioned, not only approve those principles, but provide explanation of them and guidance in their application. Of particular relevance to dispossession are the following passages in Slade J’s judgment in Powell:-

“(1) …

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess (“animus possidendi”).

(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 …… acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole. Whether or not acts of possession done on parts of an area establish title to the whole area must, however, be a matter of degree ..…. 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 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.

…… 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 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 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.” (pp 470-472)” (Emphasis added)

7.  Accordingly, in order to succeed in claiming a possessory title to the 1^st Land and to the 2^nd Land, the plaintiff has to show:-

(a) requisite possession for the purpose of adverse possession; and

(b) requisite intention to possess for the purpose of adverse possession.

8.  As stated by the Court of Final Appeal in Incorporated Owners of San Po Kong Mansion:-

(a) “requisite possession for the purpose of adverse possession” is whether the person claiming adverse possession has sufficient degree of exclusive physical control of the land in question;

(b) “requisite intention to possess for the purpose of adverse possession” is whether the person claiming adverse possession 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.

The plaintiff’s case

9.  The plaintiff’s case as pleaded in the statement of claim is as follows:-

(a) 1^st Land

(i) In or about 1944, Madam Chow, together with her husband Mr Lau Cheung (“Mr Lau”), built a wooden hut on the 1^st Land as the home for their family and raised their children therein.

(ii) In or about 1973, the wooden hut was demolished and a brick house was built on the 1^st Land.

(iii) Madam Chow and her family have been in possession of the 1^st Land to the exclusion of all the defendants.

(iv) Throughout all the years, Madam Chow has erected an iron gate supported by metal poles in front of her house and maintained wire fences around her house to keep out intruders and to mark the boundary of her house.  The keys to the house have all along been kept by Madam Chow and her family.

(v) Madam Chow reared poultry and livestock on the 1^st Land, and also grew different kinds of fruit trees thereon.

(b) 2^nd Land

In or about 1944, Madam Chow and her husband Mr Lau Cheung built a brick structure on the 2^nd Land for pig rearing.  Madam Chow and her family have been in actual possession of the 2^nd Land to the exclusion of the others for many years.

(c) By reason of the aforesaid, the plaintiff claims possessory title to the 1^st Land and the 2^nd Land.

10.  The plaintiff has filed 2 witness statements in support of the plaintiff’s case, ie Madam Lau’s witness statement and 曾家新 (“Mr Tsang”)’s witness statement.  However, the plaintiff has only called Madam Lau to give evidence in the trial.  As Mr Tsang has not confirmed his witness statement under oath and has not given evidence in the trial, I attach no weight to Mr Tsang’s witness statement.

11.  The plaintiff has also produced an expert report of Mr Ian Frederick Wootten (who is an authorized land surveyor) dated 6 October 2014 (“the Expert Report”).  By the order of the court dated 12 January 2017, the Expert Report would be evidence in the trial and there is no need to call Mr Wootten to give oral evidence.

12.  Madam Lau’s evidence is as follows:-

(a) She was born in 1958.  As far as she knows, her parents (ie Madam Chow and Mr Lau) built a wooden hut on the 1^st Land in or about 1944. Her family lived in the wooden hut for many years.

(b) In or about 1973, her father demolished the wooden hut and built a brick house on the 1^st Land.  Her mother started to use wire fences to surround the house to prevent any intruder from entering the 1^st Land.

(c) Over the years, her family continuously lived in the brick house.  Madam Lau has produced various electricity bills, water bills and demands for rates and government rent as supporting documents.

(d) Madam Chow and Mr Lau have 8 children.  As time passes, some of the family members have moved to live in other places, but Madam Chow, Mr Lau and some family members still lived in the brick house.

(e) At all times, the keys to the brick house were kept by Madam Chow and by her family members.

(f) Madam Chow’s family has maintained and improved the brick house by replacing the old electricity wires inside the house with new wires in about 2009, and installing air-conditioners in the house in about 2011.

(g) Madam Chow and her family has planted a fruit tree outside the wooden hut in or about 1944.  The fruit tree has been on the land at all times since then.

(h) As to the 2^nd Land, Madam Lau tells the court that her parents started to rear pigs, cows and chicken on the 2^nd Land in 1935.  In the 60s, her father built a brick structure on the 2^nd Land for pig rearing.  There was a lock on the brick structure, and the brick structure was also surrounded by wire fences.  In the 70s, her parents plant a fruit tree on the 2^nd Land, and the tree is still there.  In 2003, due to the outbreak of avian flu, her parents stopped to rear livestock and poultry inside the brick structure.  The family then started to use the brick structure for storing wood and miscellaneous items.  Madam Lau and her family would often visit the 2^nd Land to do maintenance work and to see whether any other person has entered the land.

(i) Mr Lau passed away in 2009, and Madam Chow passed away in 2016.

13.  In the Expert Report, Mr Wootten, after surveying the 1^st Land and the 2^nd Land and reviewing the historical records, including the aerial photos showing the 1^st Land and the 2^nd Land at different times, gives the following opinion:-

(a) The 1^st Land

(i) There was a house on the 1^st Land since at least 1956.

(ii) The house was rebuilt on the same location between 1964 and 1982.  That house remains on the land.

(iii) The house is surrounded by fences and there is evidence showing that these fences have been there at all times.

(b) The 2^nd Land

(i) A structure smaller than the present structure was on the 2^nd Land since at least 1961.

(ii) The present structure is shown on the 1972 survey sheet.  All records since 1972 show this structure.

(iii) Except for the septic tanks on the southern side of the structure, all the land is enclosed either by the structure or by the fences.

14.  In respect of the annual ratable value of the 1^st Land, the plaintiff has produced the following:-

(a) demand note for rates and government rent concerning the July to September quarter in 2014, in which the annual ratable value of the 1^st Land at that time was HK$20,400;

(b) demand note for rates and government rent concerning the April to June quarter in 2015, in which the annual ratable value of the 1^st Land at that time was HK$20,400;

(c) information leaflet “Your Rates & Government Rates” published by the Rating & Valuation Department (“R&V”), in which it is stated that the annual ratable value of a property is reviewed annually by reference to the valuation on 1 October of the previous year.

My findings

15.  Madam Lau is a straightforward witness.  Her evidence is consistent with the photos and documents produced by the plaintiff, and is also in line with the documents mentioned in the Expert Report.  Subject to the weight of the evidence concerning the wooden hut on the 1^st Land and the condition of the 2^nd Land before 1972 (see below), I accept her evidence.

16.  I have considered the Expert Report.  I am satisfied that Mr Wootten has the expertise to give the opinion in the Expert Report, and I accept his opinion.

17.  In respect of the 1^st Land, I make the following factual findings:-

(a) As to whether the wooden hut appeared on the land in or about 1944, bearing in mind the age of Madam Lau, her evidence on this point must be hearsay evidence.  The source of information is not identified in the evidence.  In these circumstances, I am unable to give much eight to the evidence on this point and cannot rely upon the evidence to make a finding that the wooden hut was built on the land in or about 1944.

(b) However, Mr Wootten gave an opinion that there was a house on the land since at least 1956.  The basis of this opinion is an aerial photo taken in 1956.  Having considered Madam Lau’s evidence, with the support of the aerial photo, I find that the wooden hut was built on the land by Madam Chow and her husband at a time not later than 1956.

(c) All the evidence shows that the wooden hut was replaced by a brick house in or about 1973.  At the same time, Madam Chow also built wire fences surrounding the land.  I find that these are true.

(d) I find that, at all times, the wooden hut and later the brick house were exclusively occupied by Madam Chow and her family, and the keys were kept by Madam Chow and her family.

(e) I also find that Madam Chow and her family planted a fruit tree outside the wooden hut and the tree remains there at all times.  The tree was planted there at a time not later than 1956.

(f) Based upon the findings above, I am satisfied that since 1956, Madam Chow had been having the requisite possession of the 1^st Land for the purpose of adverse possession.  Building the wooden hut (and later the brick house) there, with the keys to the same only being kept by her and her family, is strong evidence showing that Madam Chow had exclusive physical control of the land.  The building of wire fences in or about 1973 strengthen the exclusive possession.  Further, planting a fruit tree on the land is also evidence of possession.  See Tsoi Ping Hung v Cheung Chow Lan [2015] 2 HKLRD 1122 at §4.11.

(g) I am also satisfied that Madam Chow had the requisite intention to possess the 1^st Land for the purpose of adverse possession since 1956.  Building and maintaining the wooden hut (and later the brick house) there was an unequivocal act makes it plain to the world that Madam Chow intended to excluded all the others, including the registered owners, from the land as best she could.  The building of wire fences in or about 1973 was also a demonstration of this intention.

18.  As to the 2^nd Land, my factual findings are as follows:-

(a) Given the age of the Madam Lau, as to whether a smaller structure was built on the 2^nd Land by Madam Chow and Mr Lau in or about 1961, Madam Lau’s evidence on this point must be hearsay and the source of information is unidentified in her evidence.  In these circumstances, I cannot safely rely upon Madam Lau’s evidence on this point to make a factual finding.

(b) Save an except the above, I accept everything told by Madam Lau concerning the 2^nd Land as true.  Madam Lau’s evidence is supported by the Expert Report.

(c) I find that in or about 1972, Madam Chow and her husband built a brick structure on the 2^nd Land for pig rearing.  They also surrounded the land by fencing.  Except the septic tanks on the southern side of the pigsty, everything on the land was within the fenced area.

(d) I am satisfied that Madam Chow had been having the requisite possession of the land for the purpose of adverse possession since about 1972.  Rearing pigs on the land is evidence of possession.  Further, surrounding the land by fencing is evidence showing that Madam Chow had exclusive possession of the land.

(e) I am also satisfied that Madam Chow had the requisite intention to possess the land for the purpose of adverse possession since about 1972. Building and maintaining the fencing is an unequivocal act demonstrating that Madam Chow intended to exclude all the others, including the registered owners, from the land as best she could.

(f) I am aware of the fact that the septic tanks are not within the area surrounded by the fencing.  However, the septic tanks are structures possessed by Madam Chow and are facilities ancillary to the brick structure on the land. I am of the view that the part of the land occupied by the septic tanks was also within the adverse possession of Madam Chow.

19.  By reason of the aforesaid findings, the plaintiff has been in adverse possession of the 1^st Land since about 1956 and has been in adverse possession of the 2^nd Land since about 1972.  Prior to the commencement date of this action (ie 6 November 2014), the plaintiff has been in adverse possession of the 1^st Land and the 2^nd Land for more than 20 years^[1]. Accordingly, the plaintiff has successfully established the claim for a possessory title to the 1^st Land and to the 2^nd Land.

20.  Relying on the documents as set out in §14 above, in respect of the annual ratable value of the 1^st Land at the commencement of this action, ie on 6 November 2014, Ms Wong for the plaintiff submits that:-

(a) The annual ratable value of the 1^st Land as shown in the demand note for the July to September quarter in 2014 is based upon the valuation on 1 October 2013.

(b) The annual ratable value of the 1^st Land as shown in the demand note for April to June 2015 is based upon the valuation on 1 October 2014.

(c) As the annual ratable values as shown in the 2 demand notes are the same and 6 November 2014 is very close to 1 October 2014, it can be said that the annual ratable value of the 1^st Land would still be HK$20,400 on 6 November 2014.

I accept these submissions.

21.  In respect of the 2^nd Land, Ms Wong submits that the plaintiff’s solicitors have conducted searches in the R&V and found that the R&V had not assessed the annual ratable value of the 2^nd Land.  However, since the 2^nd Land is in close proximity to the 1^st Land and the area of the 2^nd Land is similar to the 1^st Land, the annual ratable value of the 2^nd Land would be similar to the annual ratable value of the 1^st Land.  I accept these submissions.

22.  Since the annual ratable value of the 1^st Land is less than HK$240,000, and the annual ratable value of the 2^nd Land is also less than HK$240,000, this court has the jurisdiction to give the plaintiff the appropriate reliefs.

The appropriate reliefs

23.  The plaintiff claims the following reliefs in the statement of claim:-

(a) a declaration that the defendants’ title to the 1^st Land and the 2^nd Land has been extinguished prior to the commencement of this action by virtue of the Limitation Ordinance;

(b) a declaration that the plaintiff had acquired a good possessory title to the 1^st Land and the 2^nd Land and is the owner thereof;

(c) an order that the plaintiff be registered as the owner of the 1^st Land and the 2^nd Land in the land register.

24.  I have no problem in granting a declaration in (a) to the plaintiff, but I would only give the declaration in (b) to the plaintiff without the words “and is the owner thereof”.  I would refuse to give the order in (c) to the plaintiff.  Notwithstanding the plaintiff’s success in claiming a possessory title to the 1^st Land and the 2^nd Land, the plaintiff would not replace the defendants as the registered owners of the 1^st Land and the 2^nd Land.  I repeat what I have said recently in The Personal Representative of the Estate of Lee Chiu Tai, Deceased and Another v Tsang Loi Kit (DCMP 3485/2000, 26 July 2017):-

“21. …… Regrettably, sometimes practitioners have some misunderstanding as to what a possessory title means. The law on this point has been made clear by the Court of Appeal in Wong King Lim v The Incorporated Owners of Peony House (CACV 3/2012, 29 May 2013) and by Mr Recorder Jat SC in Tsang Cho Kiu v Lam Tsat Fuk (HCMP 1077/2013, 10 December 2013). In Tsang Cho Kiu, the issue before the court is whether an adverse possessor is entitled to have an order requiring that the name of the registered owner on the Land Registry be deleted and replaced by the name of the adverse possessory. The learned recorder refused to make this order. In that case, the learned recorder said:-

“14. …… Mr Lam drew my attention to the recent decision of the Court of Appeal in Wong King Lim v The Incorporated Owners of Peony House, CACV 3/2012, 29 May 2013 (Yuen and Lam JJA, Au J). …… In dismissing the incorporated owners’ appeal, the court referred to general principles which are relevant to the question before me.

15. In judgment para 33.2, Yuen JA (with whom Lam JA and Au J agreed) noted that:-

“It is important not to confuse land with title. Land A remained subject to the covenant in favour of land B, even though the title of the owner of land A had been extinguished by the squatter’s adverse possession. Thus Collins MR held [in Re Nisbet and Potts’ Contract [1905] 1 Ch 391] at p.402 that the whole (meaning the entirety of the) right the squatter acquires under the statute of limitations is the extinguishment of a title adverse to his own, and nothing else.” (original emphasis)

16. Lam JA (as Johnson Lam VP then was) separately observed in judgment para 37 that:-

“Under common law, a squatter does not succeed to nor take over the title of the paper owner whom he has dispossessed, see Fairweather v St Marylebone Property [1963] AC 510. As observed by Keith J in Chung Ping-kwan v Lam Island Development [1995] 2 HKLRD 228 at p 235, “the squatter’s possessory title was an independent title …” The title of the squatter stems from his possession of the land and it was defeasible by the paper owner’s title until the right of the paper owner against him has been extinguished under the Limitation Ordinance by dispossession for the requisite period of time.  In Fairweather, the majority of the House of Lords held that the paper owner’s title was only extinguished vis-à-vis the squatter.  It remains as a title as between the paper owner and his lessor and it could be surrendered, and upon such surrender the lessor’s right of possession started to accrue and basing on that right the lessor could recover the land from the squatter.  This outcome vividly demonstrates the proposition that a squatter does not acquire the title of the paper owner and the Limitation Ordinance does not operate as a statutory conveyance of that title to the squatter.”

17. In my judgment, these principles apply to the present case.  Mdm Tsang has established a possessory title as against the paper owner; but it does not follow that she is entitled to be substituted as owner in the Land Registry records.”

22. These principles have also been emphasized by me in Wang Hanzhen v Li Kuen (DCMP 3269/2014, 17 February 2016), in which I said at [53]:-

“Notwithstanding the plaintiff's success in adverse possession, the plaintiff would not take over the title of the defendant. The defendant's title has only been extinguished vis-à-vis the plaintiff. It remains as a title vested in the defendant and could be surrendered to the Government. See Wong King Lim v The Incorporated Owners of Peony House (CACV 3/2012 , 29 May 2013), per Yuen JA at [33.2] and per Lam JA (as he then was) at [37]. Applied by Recorder Jat SC in Tsang Cho Kiu v Lam Tsat Fuk (HCMP 1077/2013, 10 December 2013).”

23. So the Judgment obtained by the plaintiffs only means that the defendant’s title has been extinguished vis-à-vis the plaintiffs and those deriving title under the plaintiffs, no more and no less.  The applicant is not a party to these proceedings and would not be bound by the Judgment.”

25.  Accordingly, the order sought by the plaintiff as set out in §21(c) above is misconceived.  As to the declaration sought by the plaintiff as set out in §21(b) above, it may cause confusion if the words “and is the owner thereof” is added to the declaration.  What the plaintiff has achieved is obtaining a judgment extinguishing the defendants’ title, but this does not mean that the plaintiff would replace the defendants as the registered owners of the land in question.

Conclusion

26.  I give judgment to the plaintiff and make the following declarations:-

(a) a declaration that the 1^st, the 2^nd and the 4^th defendants’ title to the 1^st Land and the 2^nd Land has been extinguished prior to the commencement of this action by virtue of the Limitation Ordinance; and

(b) a declaration that the plaintiff had acquired a good possessory title to the 1^st Land and the 2^nd Land.

27.  I have heard submissions on costs.  In my view, costs should follow the event.  I order that costs of these proceedings (including all costs reserved, if any) be paid by the 1^st, the 2^nd and the 4^th defendants to the plaintiff, to be taxed if not agreed.

28.  I thank Ms Wong for the assistance rendered to the court.