UNIVERSAL CORPORATION (COLOR & CHEMICAL) LTD v. THE PERSONAL REPRESENTATIVES OF LEUNG SHU MING also known as LEUNG SHU MING, DECEASED

HCMP 733/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO733 OF 2013

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J U D G M E N T

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1. This is a case in adverse possession.

2. Notwithstanding service on the defendant by way of substituted service, the defendants are absent today.  As I am satisfied as to service, I can proceed in the absence of the defendant.

3. Pursuant to Order 28 rule 3(5)(a) of the Rules of the High Court, the plaintiff is only required to serve a notice of hearing of the originating summons on every defendant who has acknowledged service.

4. Since no acknowledgement of service has been filed by the defendant, I accept that the plaintiff is not required to effect service of the notice of appointment on the defendant again.

The facts

5. The plaintiff company was set up in 1971 and operated at 349 Lai Chi Kok Road (“the shop”), which was just slightly opposite to the subject property at 388 Lai Chi Kok Road, Hong Kong (“the property”). 

6. Since about 20 June 1978, the plaintiff has taken up the property, through one Madam Ho, as a tenant on 20 June 1976.  Madam Ho would collect rent on a monthly basis from the plaintiff at the plaintiff’s shop.  

7. Since 1 February 1984, Madam Ho has ceased to come to the plaintiff’s shop to collect rent.  The plaintiff also lost contact with her.  Since then, the plaintiff has remained in possession of the property up to now, ie for about 30 years. 

8. In 2001, when the shop was resumed by the government, the plaintiff changed its registered address to the property and continued to carry on that business.  The plaintiff has produced documents in evidence of its payment of outgoings, such as sewage charges, government rent and rates in relation to the property. 

9. According to the land search record, the defendant acquired the property through a deed of gift from one Leung Ho-lan.  The plaintiff discovered from the registered deed of gift that there was another property being transferred to the defendant. 

10. On 19 June 2001, as evidenced in the case of HCMP 5482/2002, the property under the deed of gift had been granted to one Chan Duen-lai Albert since the ground of adverse possession was established in that case.

11. As of today no record in relation to the death of the defendant was ascertainable from the Births and Deaths Registry and the Probate Registry.

The law

12. The principles governing a claim for adverse possession are well established.  A person claiming to be in adverse possession must be shown to have both (i) factual possession; and (ii) the requisite intention to possess: see Wong Tak Yue v Kung Kwok Wai David [1998] 1 HKLRD 241.

13. The intention to possess 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 process of law will allow. 

14. The question of intention to possess is one of facts: Powell v McFarlane(1977) 38 P & CR 452.  Under the Limitation Ordinance Cap 347, the adverse possessor needs to show possession of 12 years under the current section 7(2) if his right first accrued after 1991, and 20 years if his right accrued before then.

15. In respect of a tenancy, under section 12(2) of the Limitation Ordinance:

“A tenancy from year to year or other period, without a lease in writing, shall, for the purposes of this Ordinance, be deemed to be determined at the expiration of the first year or other period, and accordingly the right of action of the person entitled to the land subject to the tenancy shall be deemed to have accrued at the date of such determination:

Provided that, where any rent has subsequently been received in respect of the tenancy, the right of action shall be deemed to have accrued on the date of the last receipt of rent.”

Application of the law

16. The facts firmly establish that the plaintiff has been in factual possession of the property since it last paid rent to Madam Ho in January 1984.  The plaintiff has exercised control over this property for its exclusive use as a warehouse, and later as a shop. 

17. By virtue of section 12(2) of the Limitation Ordinance, the oral monthly tenancy over the property should be deemed to have determined after the last period for which rent was paid.  As the rent was collected on the first day of each month, and since Madam Ho has not collected rent from since 1 February 1984, the last rental payment was on or about 1 January 1984. Therefore, the tenancy would be deemed to have ended by 31 January 1984.

18. Continued possession of a property by a tenant is considered to be adverse once the period covered by the last payment of rent has expired - in this case for about 30 years.

19. I am satisfied that both in terms of factual possession and intention to possess the plaintiff has established its case on the evidence. There had been no other persons permitted to use the property, and the plaintiff has dealt with the property as an occupying owner. 

20. Given the aforesaid facts, the defendant’s title to the property ought to have extinguished.  In the circumstances, I am satisfied that the plaintiff ought to be given the relief sought in the originating summons.

21. So I make a declaration that the plaintiff has been in adverse possession of the property known as the Ground Floor of 388 Lai Chi Kok, Kowloon, Hong Kong, erected on and registered in the Land Registry as The Remaining Portion of Sub-Section 2 of Section G of New Kowloon Inland Lot No. 176, for a continuous period of over 20 years immediately prior to the commencement of these proceedings and by virtue of the provisions in the Limitation Ordinance, any rights and interests of the defendant, or of his successor in title or any person deriving title to the property from the defendant or his successor in title in respect of the property have been extinguished. 

22. I make no order as to costs.