JIN YU CHIA v. THE PERSONAL REPRESENTATIVE OF LEE AH HSIN, DECEASED

CACV 111/2017

[2018] HKCA 979

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 111 OF 2017

(ON APPEAL FROM HCA NO. 1121 OF 2011)

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REASONS FOR JUDGMENT

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Hon Cheung JA (giving the Reasons for Judgment of the Court ):

I. The appeal

1.1   The plaintiff appealed against the judgment of Wilson Chan J who dismissed her claim for adverse possession of a property (‘the property’) formerly registered in the name of Madam Lee Ah Hsin (‘the Deceased’). The Deceased died intestate in Hong Kong on 5 January 1994 at the age of 72.

1.2   The Deceased was survived by a younger brother named Mr 李洪翔 (‘the Brother’) and (according to the Brother) by another sister although the Judge did not make findings on the sister.  The Brother passed away on 6 July 2011.  The defendant is the son of the Brother and the nephew of the Deceased.  He was appointed to represent the Deceased’s estate for the purpose of this action.

1.3   The property together with other units in the same building had been sold by public auction to a buyer pursuant to a judgment of the Lands Tribunal in LDCS 27000 of 2011 dated 8 October 2014.  The net proceeds of the sale of the property in the sum of $7,557,612.48 are held by two Trustees pending the final determination of the action.

1.4   We dismissed the appeal at the conclusion of the hearing, I now give the reasons for judgment of the Court.

II.    The plaintiff’s case

2.1   The Judge summarised the plaintiff’s case as follows :

‘ 9. The plaintiff and the Deceased became acquainted with each other in or around the year 1970 and later on they developed a closer relationship. As time went by, the Deceased and the plaintiff regarded each other as respectively the sworn-mother and sworn-daughter.

10.  Since about 1991, the plaintiff had been occupying the Property together with the Deceased until the latter’s death in 1994.  Since the death of the Deceased in 1994, the plaintiff continued to occupy the Property and had been in uninterrupted and exclusive use, occupation, possession and control of the Property.

11.  It is also the plaintiff’s case that since the death of the Deceased, the plaintiff has been settling the outgoings of the Property including management fees, ad hoc repair expenses of the building at which the Property is situated, utility charges and rates from time to time.  In this regard, documentary evidence includes:-

   (1) Since 1995, the plaintiff had paid for the share of the Property in relation to the remedial and maintenance works of the buildings where the Property is situated.

   (2) At all material times, the plaintiff had also been paying the management fees of the Property.

   (3) As far as documentary evidence is available between December 2008 and February 2015, it was the plaintiff who had paid the electricity bills of the Property.  During the said period of time, there had been readings of use of electricity at the Property.

12.  Also, it was the plaintiff who promised to deliver up vacant possession of the Property to the developer.

13.  The plaintiff claims that since the death of the Deceased in 1994, she had been in exclusive possession of the Property for more than 12 years which was and is adverse to the defendant, and pursuant to sections 7(2) and 17 of the Limitation Ordinance, Cap 347, the plaintiff has acquired all the title, rights, benefits and interests of and in the Property.’

2.2   The plaintiff relied on a note dated 4 April 1994 (‘the Note’) written by the Brother in which he purportedly agreed to give up all his rights as a beneficiary under the estate of the Deceased and acknowledged that the plaintiff was entitled to the entire estate of the Deceased, including the property, according to the wishes of the Deceased.  The plaintiff’s case on how the Note came into existence was summarised by the Judge as follows :

‘ 44. The plaintiff’s written case was that she just requested the defendant’s father to confirm the Deceased’s wishes and intention to give her the Property, whereupon of his own initiative and with no prompting of any kind from the plaintiff, the defendant’s father wrote out the Note, and two days later, the defendant again of his own initiative took the Note to be authenticated by the local government in China.

45.  The plaintiff gave an entirely different story in her oral testimony in court.  According to the plaintiff, she did not make any explicit request of that kind.  Yet, the defendant’s father then wrote out the Note, and then the defendant took the Note to be authenticated.  At that stage, she was not even capable of making out what the defendant’s father was writing in the Note and was only able to do so many years later.’

III.   The defendant’s case

3.1   The Judge summarised the defendant’s case on adverse possession as follows :

‘ 14. In his written Opening Submissions, the defendant makes clear that he does not challenge the plaintiff’s case that she had been in possession of the Property since 1994.

15. The defendant however contended that the plaintiff’s possession of the Property could not have been adverse, as the plaintiff was entrusted with the task of looking after the Property for the purpose of its eventual sale, the proceeds of which were to be shared between the defendant’s father and the plaintiff. In short, the Property was occupied by the plaintiff initially with the consent of the Deceased, and after the death of the Deceased, with the consent of the Brother being one of the beneficiaries of the estate of the Deceased.’

3.2   The defendant’s case on the Note was set out in his Re‑re-amended Defence and Counterclaim :

‘ Particulars

a.  After the death of the Deceased, on or about 4 April 1994, at Li Hung Cheung’s [the Brother] home, in the presence of the Defendant, the Plaintiff represented to Li Hung Cheung that:

(i) Since the Deceased had already passed away, it would be quite impossible for Li Hung Cheung and his family to obtain a permit or visa to visit Hong Kong and to apply to the Hong Kong government for the inheritance of the Property.

(ii) And if there was nobody looking after the Property, the Hong Kong government would forfeit the Property.

(iii) Therefore, it would be in the interest of Li Hung Cheung to write and sign a document, by copying the contents from another piece of paper already prepared by the Plaintiff, so that the Plaintiff would have the authority to deal with the Property.

(iv) And upon the sale of the Property, the proceeds of sale would be divided between the Plaintiff and Li Hung Cheung in equal shares.

(‘the First Representations’).

b.  Induced by and acting in reliance upon each of the First Representations, Li Hung Cheung wrote and signed the document dated 4 April 1994 by copying the contents from the said piece of paper prepared by the Plaintiff, after which the Defendant took the said document to the local village representative for notarization and authentication, before handing the same to the Plaintiff.

.....’

3.3   The plaintiff had previously instituted proceedings against the Brother in HCMP 1227/2009 to obtain possession of the property.  The defence filed by the Brother was that after the death of the Deceased, the plaintiff arranged for the body to be transported to the Mainland to be buried in the village where the Brother was living.  The plaintiff told him that since his status would not allow him to go to Hong Kong to succeed the Deceased’s estate, the Hong Kong Government would forfeit the estate.  The plaintiff suggested to him that he should instead authorise her to deal with the Deceased’s estate and the benefit to be obtained was to be shared equally between them.  The plaintiff later withdrew HCMP 1227/2009.  Mr Chow for the plaintiff informed us that this was because the proceedings had not been properly served outside Hong Kong on the Brother in the Mainland.

3.4   The defendant’s own witness statement confirmed that he was present with his father when the plaintiff made the representations mentioned in paragraph 3.3 above.  It was said that the agreement made by his father was only to allow the plaintiff to manage the property.

IV.   Intention to possess

4.1   It is well‑established that in order to establish adverse possession, the plaintiff must show that not only has she been in possession of the property for the required period of time, but also her intention to possess the property is an intention to exclude the whole world including the owner of the property.  Only in this way can she establish adverse possession.  Litton PJ in Wong Tak Yue v Kung Kwok Wai & Another (No.2) (1997-98) 1 HKCFAR 55, 70 stated :

‘ The law is clear. The owner of the land with the paper title is deemed in possession of the land. If the law is to attribute possession to a person who can establish no paper title to possession, and claims to be a mere trespasser, the burden is upon him to establish his intention to exclude the whole world: including the owner of the land. Only in this way can he establish “adverse possession” in terms of s.13(1) of the Limitation Ordinance (Cap 347).’ (emphasis added)

4.2   On the question of intention of the trespasser it is pertinent to remind us what Slade J said in the seminal case of Powell v McFarlane [1989] 3 WLR 152 :

‘ ..... 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 andhe 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 not treat him as having the necessary animus possidendi and consequently as not having dispossessed the owner.’ (emphasis added)

4.3   It is not in dispute that the plaintiff had been in possession of the property for the requisite length of time.  The real contention in this case is whether she had the necessary intention to acquire a possessory title.  The Judge had rightfully observed :

‘ 29. Implicit in the plaintiff’s case is that by reason of the Note, the plaintiff then genuinely believes that she has become the true owner of the Property (and more precisely the entire estate of the Deceased including the Property), so that thereafter she has been in possession of the Property to the exclusion of not only the world at large, but also the estate of the Deceased.

30.  Thus, the circumstances surrounding and leading to the making of the Note are crucial in determining whether the plaintiff has been in adverse possession of the Property.

31.  I agree that in the final analysis, it is a question of credibility: does the court prefer the evidence of the plaintiff and her witness, or does the court prefer the evidence of the defendant and his witness?’

4.4   The intention of the plaintiff on the nature of her possession is to be ascertained from the circumstances of the case including what she had done and said.  In respect of her actions, she had been discharging the outgoings of the property which the Judge had described in [10] of his judgment (see paragraph 2.1 above).  This is obviously a relevant factor.  But her intention is also to be ascertained by what she had told the Brother before the making of the Note.  Li CJ in Wong Tak Yue at page 69 explained the Court’s approach in dealing with such statements.  In respect of self‑serving statements, the Court will usually regard them with some scepticism while the Court will accord considerable weight to statements made against one’s interest :

‘ 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.’

4.5   The plaintiff denied that she had made the representations to the Brother but in the end, the Judge accepted the defendant’s case on how the Note came into being.  The Judge described the plaintiff’s evidence as ‘inherently implausible, mutually contradictory’. The Judge accepted the defendant’s evidence as ‘simple, straightforward and convincing’.  The Judge held :

‘ 39. Second, on the plaintiff’s case and evidence, the defendant’s father was so generous that he was prepared to forego the entirety of his entitlement under the estate of the Deceased, and to give the entirety of the estate of the Deceased to the plaintiff so as to comply with the wishes and intention of the Deceased.

40.  However, according to Madam Li Sin Sik, both the defendant’s father and the defendant were greedy for money, and had persistently pestered the Deceased with requests for gifts of money.  If that is the case, one asks rhetorically why would the defendant’s father be so generous as to sign away his entitlement to the Deceased’s estate?

41.  But irrespective of such alleged greed, why would the defendant’s father be prepared to sign away his entitlement under the Deceased’s estate in return for nothing?

42.  I further agree with the defendant that if the defendant’s father were really so generous and both he and the defendant had continued to maintain a good and cordial relationship with the plaintiff, why would he be so upset by the plaintiff’s application to obtain the Property through the proceedings HCMP 1227/2009 in 2009.  Why should he care about the Property at all when he had given it away 15 years before?

43.  Third, I agree that the plaintiff’s evidence regarding the events leading to the defendant’s father writing out the Note is incredible and contrary to her own earlier affidavit evidence and witness statement.’

4.6   Once this finding was made, the Judge was clearly entitled to reject the plaintiff’s case on adverse possession because her intention as shown by her statement to the Brother was that her role was merely to help the Brother to look after the Deceased’s estate which included the property and this was inconsistent with someone whose intention was to occupy the property to the exclusion of all the world. 

4.7   Mr Chow submitted that the statement, if made, took place in 1994 and there might well be a change of intention on the part of the plaintiff since then.  In our view the plaintiff is bound by the way she presented her case.  The only case she put forward was a complete denial of the making of the representations.  There was no alternative case put forward by her such as, for example, notwithstanding what she said earlier, she changed her mind later on.  In such circumstances there is simply no basis for the plaintiff to put forward any ‘change of intention’ argument.  In any event, the relevance of the caution mentioned by the authorities comes into play: one should treat such self‑serving statement with scepticism and more importantly if there are more than one interpretation to the acts of the plaintiff and if she had not made it plain by her actions or words that she intended to exclude the owner, then the Court will not treat her as having the necessary intention to possess and consequently as not having dispossessed the true owner.

4.8   Mr Chow, on behalf of the plaintiff, submitted that the Judge was wrong in his finding.  It is well-established that in challenging the findings of fact by a trial judge, the appellant must show that the findings are plainly wrong.  This is an extremely high threshold.  In our view, none of the grounds of appeal whether taken individually or together can show that the Judge was plainly wrong in his finding on the making of the Note upon which the intention of the plaintiff can be ascertained.  In our view the grounds of appeal that had been advanced which we will now deal with, only touch upon peripheral matters.

1)   The Judge described the Deceased to be a shrewd investor.  The plaintiff complained that there was no evidential basis for the Judge to make such a finding.  This is clearly a peripheral matter;

2)(1)  The Judge held that :

‘ 35. Yet, despite the plaintiff’s testimony that the Deceased all along wanted to give her the Property, the Deceased did not give her anything by way of either an inter vivos gift or a testamentary gift, let alone the Property. In particular, there is the evidence that when the Deceased sold the property at To Kwa Wan, the Deceased did not give the plaintiff any part of the proceeds of the sale.’

2)(2)  The plaintiff complained that the Judge ignored the fact that the Deceased had died suddenly on 5 January 1994.  In our view, this does not even begin to show that the Judge was plainly wrong in his finding.

3)  The plaintiff complained that the Judge was wrong not to accept the plaintiff’s evidence as to the making of the Note.  Again, there is no substance in this complaint because the acceptance or rejection of a witness’s evidence is a matter entirely within the province of a trial judge.

4)  The evidence showed that the Deceased had intended to adopt the defendant as her son and the Judge referred to the evidence of the plaintiff’s witness, Li Sin Sik (‘Li’) on the adoption.  The plaintiff complained that the Judge had misunderstood Li’s evidence.  In our view, the Judge was clearly entitled not to accept Li’s evidence.  In any event, Li’s evidence has no bearing on the circumstances in which the Note came into existence.

5)  The plaintiff complained that the Judge failed to take into account the evidence showing the close relationship between the Deceased and the plaintiff.  It is true that the Judge did not make findings on this relationship but as pointed out earlier the focus before him was on the intention of the plaintiff which was to be gathered from the representations she had made to the Brother.  This ground again does not show that the Judge was plainly wrong in his findings.

V.  Conclusion

5.   Accordingly the appeal was dismissed with costs to the defendant.  The defendant’s costs are to be taxed according to the Legal Aid Regulation.