YUK LAN FUNG, LILY v. KO SUK PING AND OTHERS

HCMP 1801/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1801 OF 2015

____________

____________

____________

________________

D E C I S I O N

________________

INTRODUCTION

1.  Mrs Fung (the plaintiff) is one of the current registered owners of a property in Causeway Bay.  In September 2015, she obtained an order for possession of the property against Madam Ko (the 1^st defendant), who had already passed away in March 2014, and all other persons in occupation of the property (the 2^nd defendant), on the ground that they were occupying the property without any consent or licence of or from Mrs Fung.

2.  Mr Mac (Madam Ko’s son, who has been joined as the 3^rd defendant upon his own application) disputes the right of Mrs Fung to recover possession of the property on the ground that he has acquired title to the property by adverse possession.  His application to set aside the order for possession was refused by Master K Lo.  He now appeals against the Master’s decision.

3.  The key issue that I have to decide is whether, on the materials currently before the court, Mr Mac has demonstrated that he has a real prospect of success in establishing at the trial that his family’s undoubted factual possession of the property for a period of at least 12 year prior to the commencement of this action was accompanied by the requisite “intention to possess”.

BACKGROUND FACTS

4.  According to Mrs Fung, in October 1956, her husband (Mr Fung) and her mother-in-law (Madam Chui Yut) acquired the property known as 3/F, 59 Percival Street, Causeway Bay, Hong Kong (“the Property”) as joint tenants.  Originally, the Property was occupied by (inter alia) Madam Chui Yut and Mr Fung, Mrs Fung and their two daughters (“the Fung Family”).  Shortly afterwards, the Fung Family moved out of the Property.  In around late 1956, Mr Fung went to Canada, followed by Mrs Fung and the two daughters in around December 1960, and by Madam Chui Yut in about a year or so later.  In the meantime, also in around late 1956, Madam Chui Yee (Madam Chui Yut’s sister) and Madam Ko came to Hong Kong from the PRC.  Madam Chui Yut allowed them to live in the Property.  Apparently, Madam Chui Yut and Madam Ko were also related.

5.  It is not entirely clear on the evidence as to the terms on which they were allowed to occupy in the Property, and whether they were allowed to occupy the whole or only a part of the Property.

6.  According to Mr Mac, he was told by Madam Ko that:-

(1)   Madam Chui Yee and Madam Ko came to Hong Kong from the PRC in about 1959.

(2)   Madam Chui Yut rented one of the rooms in the Property (“the Front Room”) to the two of them. At that time, there were three other tenants in the Property.  The rents were paid to an agent of Madam Chui Yut.

(3)   In about 1970, Madam Ko married Mr Mac’s father.  Mr Mac was born in 1971, followed by his sister in 1972.

(4)   Madam Chui Yee passed away in 1977.  Mr Mac’s father then succeeded as the tenant of the Front Room, and paid rent to the agent until the agent passed away in 1975.  Since that time, no rent was paid to Madam Chui Yut (or to Mr Fung). Madam Ko also started to collect rent from the other tenants and pocketed the same.

(5)   In around 1982, there was a fire in the Property.  After the fire, Mr Mac’s parents renovated the Property, used a part of the Property for the purpose of carrying on a hair salon business, rented out another part of the Property, and occupied the rest of the Property as their residence.

7.  For the purpose of this application, I shall proceed on the basis of Mr Mac’s version as summarised in paragraph 6 above.

8.  It is Mr Mac’s case that he and his parents had been in adverse possession of the Property since at least 1982.  The exclusive possession of the Property was continued by Mr Mac after the passing away of his father and his mother in 2003 and 2014 respectively.

9.  On the other hand, it is Mrs Fung’s case that:-

(1)    At all material times, the Mac Family occupied the Property as licencee or with the permission of the owner(s), ie Mr Fung and Madam Chui Yut until 1981 when Madam Chui Yut passed away whereupon Mr Fung became the sole owner of the Property by survivorship.

(2)   On one occasion in 1960, she went to the Property to tell Madam Chui Yut that she intended to immigrate to Canada.  On that occasion, Madam Chui Yut told Madam Chui Yee and Madam Ko that they could continue to reside in the Property, and asked Madam Chui Yee to look after the Property for them (presumably a reference to herself and the Fung Family).  Madam Chui Yut further emphasised that should either herself or any members of the Fung Family wanted the Property back in the future, Madam Chui Yee and Madam Ko would have to move out, to which both agreed.

(3)   Mrs Fung points to three particular incidents between 1980 to 2005 when she came back to Hong Kong from Canada to show that the Mac Family did not have the requisite intention to possess the Property for the purpose of adverse possession.  Since this part of the evidence forms the crux of Mrs Fung’s case, I shall set out her affirmation in full:-

“14. During my 1^st visit in the early 1980s, I specifically visited the 1^st Defendant. I told the 1^st Defendant that it is possible that one of my children might wish to move back to Hong Kong in the near future. The 1^st Defendant told me not to worry as she and her family can move out to another apartment as their financial position had improved. The 1^st Defendant asked me to give her advance notice of our intention to repossess the Property.

15. During my 2^nd visit in the early 1990s, I also specifically paid a visit to the 1^st Defendant at the Property. On this occasion, I told the 1^st Defendant that I wanted to sell the Property. The 1^st Defendant however advised me not to rush and that it would be better if we can sell the property to a developer, as the 1^st Defendant believed that the selling price would be higher in those circumstances.

16.   During my 3^rd visit in April 2005, I again visited the 1^st Defendant at the Property.  I reiterated my request that the Property should be sold.  The 1^st Defendant suggested that I should sign a power of attorney in her favour such [as] to permit her to pay the taxes and other bills at a cheaper rate.  Doubtful of that suggestion and the consequences that would entail, I rejected that proposal.”

(4)   After returning to Canada, and approximately a year after the 3^rd visit in April 2005, Mrs Fung tried to call Madam Ko to discuss concrete plans to sell the Property.  Madam Ko, however, refused to talk, and asked her to get a lawyer instead.

10.  Following notices of termination issued in January 2014 and February 2015, Mrs Fung commenced the present action in July 2015 to recover possession of the Property.  Mrs Fung obtained an order for possession of the Property from Master H Au-Yeung on 2 September 2015 in the absence of any opposition.  Mr Mac then applied to join in as a defendant to this action and to set aside Master H Au-Yeung’s order by summons dated 11 January 2016, followed by another summons for the same relief dated 1 February 2016.  His application for joinder was allowed by consent by Master J Wong on 5 February 2016, but his application to set aside was refused by Master K Lo on 25 July 2016.  He now appeals against the decision of Master K Lo by a notice of appeal dated 5 August 2016.

11.  For the sake of completeness, I should mention that Mr Fung assigned the Property to himself, Mrs Fung and their two daughters as joint tenants in October 2005.

DISCUSSION

12.  It is not in dispute that the test to be applied in the present appeal is whether Mr Mac has shown a real prospect of success in establishing at the trial his claim of adverse possession.

13.  Mrs Fung’s evidence regarding the three visits between 1980 and 2005 is not contradicted by any positive evidence filed by Mr Mac, understandably because he was not a party to the alleged conversations.  At the highest, all that he can say is that his parents never told him about those conversations.

14.  On the face of the matter, those conversations, in my particular the 1^st one, clearly show that Madam Ko recognised or accepted that she and her family could occupy the Property only for so long as the owner(s) permitted them to do so, and that they were willing to give up possession of the Property if and when required by the owner(s), provided that advance notice of intention to repossess was given.

15.  At the hearing this morning, there was some debate as to whether the present case is governed by the decision of the Court of Final Appeal in Wong Tak Yue v Kung Kwok Wai (1997) 1 HKCFAR 55, and whether the decision of the House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 represents the law in Hong Kong. It is, I believe, well recognised that Wong Tak Yue and Pye cannot be reconciled (see The Hong Kong Buddhist Association v Cheng Ka Leung Michael, HCMP 4108/2003 (unreported, 8 September 2006), at paragraphs 48 and 49 per DHCJ Saunders (as he then was); Lau Wing Hong v Wong Wor Hung [2006] 4 HKLRD 671, at paragraphs 33 and 34 per Recorder McCoy SC; and Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (No 5) [2007] 5 HKC 122, at paragraphs 84 to 92 per Lam J (as he then was)).  However, the central difference between the two decisions, namely, whether a willingness by a squatter to pay rent to the paper owner is necessarily inconsistent with an intention to exclude the owner and hence the requisite intention to possess for the purpose of adverse possession, is not material to the present situation before me.

16.  Granted that an intention to possess is not the same as “an intention to own or even an intention to acquire ownership” (per Hoffmann J, as he then was, in Buckinghamshire County Council v Moran (1988) 56 P&CR 372), it is clear law that an intention to possess means “an intention to exclude the world at large, including the owner with the paper title … so far as is reasonably practicable and so far as the process of the law will allow” (per Slade J, as he then was, in Powell v McFarlane (1979) 38 P&CR 452 at 471-472, quoted with approval by Li CJ in the Court of Final Appeal in Wong Tak Yue), and that as a matter of law, “where a person occupies land as a licensee or otherwise with the permission of the true owner, he is not in adverse possession, for he enjoys his occupation under lawful-title” (per Ma CJHC, as he then was, in Cheung Chung Yan v Chan Man Kwong, CACV 268/2003).

17.  In my view, what Madam Ko said to Mrs Fung during the latter’s 1^st visit in the early 1980s clearly shows that Madam Ko did not intend to exclude the paper owner(s), and an acceptance on Madam Ko’s part that she and her family occupied the Property with the permission of the owner(s).  What transpired during Mrs Fung’s 2^nd and 3^rd visits, while not as clear, is nevertheless entirely consistent with Madam Ko being of the same intention throughout the period.

18.  I shall now deal with a few other points raised by Ms Wong on behalf of Mr Mac.

19.  First, Ms Wong submits that the conduct of Mr Mac’s parents in renovating the Property to start a hair salon business there and to rent out a portion of the Property after 1982 is clear evidence of an intention to possess.  It seems to me that such conduct may well be evidence of intention to possess vis-à-vis third parties, but not the owner of the Property.

20.  Second, Ms Wong argues that if there was any licence to occupy the Property granted by Madam Chui Yut to Madam Ko, that licence would have been revoked upon the death of Madam Chui Yut in 1981.  In my view, it would be artificial to treat the original licence as having been granted solely by Madam Chui Yut.  The reality of the matter must be that Madam Chui Yut was also acting on behalf of her son, Mr Fung.  In any event, as I see it, Mrs Fung’s case is not dependant on proof of the original licence granted in the late 1950s, but on proof that Madam Ko did not intend to exclude the owner(s) and accepted that she occupied the Property with the permission of the owner(s).

21.  Third, Ms Wong argues that Mrs Fung was not an owner of the Property prior to October 2005 and could not have granted any licence to Madam Ko during the period from 1980 to April 2005.  I do not consider, however, that the plaintiff’s case is dependent on proof of any licence granted by Mrs Fung in the course of her visits to Hong Kong between 1980s and 2005.

22.  Lastly, Ms Wong argues that the court should not conclude against Mr Mac at this interlocutory stage without affording him an opportunity to cross examine Mrs Fung.  In my view, unless Mr Mac can demonstrate at this stage that his claim of adverse possession has a real prospect of success, it would not be right to set aside the order for possession and let the action proceed to trial just to give Mr Mac as opportunity to fish out a case by cross examination.

23.  In all, I am of the view that Mr Mac has failed to show that he has a real prospect of success in establishing at the trial that his family’s factual possession of the Property for a period of at least 12 year prior to the commencement of this action was accompanied by the requisite “intention to possess”.

DISPOSITION

24.  For the foregoing reasons, I dismiss Mr Mac’s notice of appeal dated 5 August 2016.

25.  I also dismiss his application by summons dated 15 November 2016 for retrospective leave to file his 4^th affirmation dated 8 August 2016, on the following grounds:-

(1)   his previous oral application to file a further affirmation to deal with the 3 visits was rejected by Master K Lo on 25 July 2016, and he has not appealed against that decision;

(2)   there is no reasonable explanation of why the matters raised in his 4^th affirmation were not adduced in his previous affirmations; and

(3)   in any event, his evidence that his parents never told him about the 3 visits does not take his case any further.

26.  I shall now hear the parties on the question of costs and any other consequential matters.