SUNG MEI CHI v. STONE TARGET LTD.

1991, No. A8583

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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Background

1. The plaintiff owns a piece of land in the New Territories. It is designated as Lot No. 2081B, remaining portion of Demarcation District No. 111 ("2081"). She acquired this land in March 1967. It is about 4000 square feet in extent.

2. During 1989 and 1990, the defendant acquired Lots 2095, 2096 and 2097. Lot 2095 abuts on 2081 to the east. On 17 January 1991, the defendant commenced building works for a petrol station on what, I have no doubt, it believed was its own land. Unfortunately, part of the petrol station, to the extent of about 800 square feet, was built on 2081 and not, as the defendant probably assumed, on part of 2095.

3. Given the state of the survey demarcation of lots in the New Territories, this mistake by the defendant is not surprising, and, I suppose, not uncommon. Given a measure of goodwill and common sense on the part of the parties and their advisers, the problem should have been easily resolved.

The Issue

4. The defendant says that it "is in possession of, and holds possessory title to, an approximately 800 square feet part" of 2081. It says that it "has been in the undisturbed possession of the Defendant, or its predecessors in title of [2095] for a period exceeding 20 years preceding 30th June 1973". The reason for the date mentioned in this plea will become apparent later. Not surprisingly, the plaintiff denies that the defendant has any rights over the 800 odd square feet concerned.

The Law

5. Section 7(2) of the Limitation Ordinance (Cap. 347) says -

No action shall be brought by any other person to recover any land after the expiration of 20 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person . . . .

6. Section 8(1) of the same Ordinance provides -

Where a person bringing an action to recover land, or some person through whom he claims, has been in possession thereof, and has while entitled thereto been dispossessed or discontinued his possession, the right of action shall be deemed to have accrued on the date of dispossession or discontinuance.

7. Section 13(1) and (2) of the Ordinance reads -

(1) No right of action to recover land shall be deemed to accrue unless the land is in possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) and where under the foregoing provisions of this Ordinance any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date, the right of action shall not be deemed to accrue unless and until adverse possession is taken of the land.

(2) Where a right of action to recover land has accrued and thereafter, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right shall be deemed to accrue unless and until the land is again taken into adverse possession.

8. With effect from 1 July 1991, the period mentioned in subsection 7(2) was amended to 12 years, but section 38A makes it clear that this amendment does not apply where the cause of action arose, as in this case, before 1 July 1991.

9. Complications are introduced into the problem by the New Territories (Renewable Crown Leases) Ordinance (Cap. 152). The Court of Appeal has decided in Chung Ping-Kwan and Others v. Lam Island Development Co. Ltd. Civil Appeal Nos. 66 and 67 of 1994 that in the case of a squatter who went into possession before 1 July 1953, this Ordinance preserves his rights, but, where the squatter took possession after 1 July 1953, his rights are not protected. What this means is that a person in the position of the defendant, to resist successfully a claim by the owner, has to establish adverse possession for 20 years before 1 July 1973. Chung Ping-kwan's case is undergoing the appeal procedure to Her Majesty in Council, but presently it is binding on me.

The Evidence

10. It is not necessary to recite the evidence in this case in any detail. There was a lot of it; and a lot of it was unconvincing, unhelpful, unsatisfactory, and some of it downright untruthful. The plaintiff is the owner of the disputed 800 odd square feet and the defendant is in possession of it without leave of the plaintiff. It is for the defendant to show that it is entitled to remain in possession. It seems to me that, looking at the evidence in the best possible light for the defendant, it has failed to do this.

11. Mr Chong, who appears for the defendant, is not able to advance a case beyond showing that at some time between December 1975 and November 1979, the disputed land was enclosed, probably by the then owner of 2095, the defendant's predecessor in title. Before this period, it can be said only that the land was, at times and not continuously, under cultivation and was separated from the rest of 2081 by a dirt path or road.

12. As for the cultivation, assuming that the use of the soil was a sufficient dispossession of the owner of 2081, there is no evidence at all to establish who cultivated the disputed land, as to the extent to which, if at all, the owner of the land was excluded or the nature of the intention of those who did the cultivation. There is no evidence that the land was cultivated by one person to the exclusion of others, or whether it was cultivated by a number of different people at the same time or different times, or, possibly, whether it was cultivated on a communal basis. Such evidence as there is about the basis of this cultivation indicates that, in the days before the development of the New Territories, when land was cheap and plentiful, the local community in this area cultivated land where they thought fit without regard to who owned that land. Nor is there any evidence that the defendant is a successor in title to those who cultivated the land. It is not established, certainly, that the land was cultivated by the previous owners of 2095. If the land was cultivated by one villager after another, season by season, simply by moving onto the land, breaking the soil, planting crops, reaping them and moving off when the harvest was gathered in, without any regard to who had cultivated the land the season before, and without his leave, as may have been the case on the evidence, there is no way in which one cultivator can refer his casual occupation as such back in time to that of another cultivator.

13. The defendant, apart from physical separation by a fence or wall from December 1975, relies on physical separation from 1970 to 1976 by a dirt driveway and, before 1970, on occupation by the predecessors in title of 2095. There is no evidence whatsoever that the occupation of the disputed land prior to 1976 was by the defendant's predecessors in title.

14. The dirt driveway is not part of the disputed land. Occupation of it cannot give the defendant any rights to the disputed land. It cannot be said to have in any way enclosed the disputed land. There is no evidence as to by whom and for what purpose the dirt road was made. The probability is that it developed over time for the obvious purpose - to enable people to get from the public road to land beyond 2081. There was certainly no need to make this dirt road for the purpose of cultivating the disputed land. There is no evidence that the dirt road was intended in any way to demarcate the boundries of the disputed land.

15. On this basis, I must conclude that the defendant has not established that it can rely on anything that happened before December 1975 to defeat the plaintiff's claim. This being the case, even if Chung Ping-kwan's case is eventually held not to be good law, the defendant has not established a case under the Limitation Ordinance.

Possession

16. The plaintiff claims an order for possession of the disputed land. She is clearly entitled to this. Mr Chong argues, on the basis of Wrotham Park Estate Co. Ltd. v. Parkside Homes Ltd. [1974] W.L.R. 798 and Bracewell v. Appleby [1975] 1 Ch. 408, that I have a discretion to refuse an order if it just and equitable to do so. This is not the case. In the cases referred to by Mr Chong, the plaintiffs sought injunctive relief; an equitable remedy. Where an owner of land is wrongfully dispossessed, and a right of action is not barred, he has a right to possession; I cannot refuse that remedy. Accordingly, I grant a order for possession. It would be unreasonable, however, to expect the defendant to vacate the disputed land immediately; it has built a driveway of a petrol station upon it, and I am satisfied it did so believing it owned that land. It will take a considerable period to re-plan the petrol station and obtain the necessary consents to re-route the drive-way. In these circumstances, I direct that the order for possession shall not take effect until 1 September 1995. The delay will not prejudice the plaintiff; there is no evidence that she plans to do anything with the disputed land. But it is right that the defendant should pay while it continues to occupy the plaintiff's land. A reasonable sum in this regard, in my view, would be $850 a month, with the first payment within 30 days of the delivery of this judgment. If the defendant fails to pay within 7 days of due date, the order for possession shall come into effect immediately.

Declaration

17. The plaintiff also claims a declaration that the defendant is not entitled to rely on the Limitation Ordinance to occupy the disputed land. There is no need for this. My order for possession of the disputed land in favour of the plaintiff in itself says that the defendant has not been able to rely on the Ordinance.

Damages

18. The plaintiff claims damages. She is entitled to such damages as she has suffered by reason of being dispossessed of the disputed land.

19. Mr Cheng, who appeared for the plaintiff, made a late bid for exemplary damages. The rules provide that a claim for exemplary damages, and the particulars relied upon, must be specifically pleaded. The plaintiff did not do so. In any event, it has not been established that the defendant has been guilty of any conduct that would bring it remotely within the range of being at risk of an award of exemplary damages. If anything, I have suspicions about the motives of some people lurking behind the scenes on the plaintiff's side of this dispute.

20. In my view, the plaintiff has suffered little by way of actual damage. The plaintiff and her husband have taken very little interest in Lot 2081. In 1983, the plaintiff's husband was told that a wall encroached onto 2081. A complaint was made to the occupier, but, when he disagreed that he was encroaching on 2081, the matter was taken no further.

21. I was told that the plaintiff leased a total of about 30,000 square feet of land, including 2081, at a rental of $17,000 a month for the period from July 1991 to June 1994. It was said that the rent for the period of three years after June 1994 was $45,000 a month. I am suspicious about this large increase, but, even taking a substantial increase into account as basis for the damages, they are small. The defendant was, to date, in occupation of the plaintiff's land for some 49 months. For 43 of those months, the rental value was about 56 cents a square foot a month.

22. Doing the best I can with scanty and unsatisfactory information, I assess the plaintiff's damages at $25,000.

Costs

23. Mr Cheng argued that costs should be on a common fund basis, whereas Mr Chong suggested that they should be awarded on the District Court scale. I reject both these approaches. I see no basis for departing from the usual order. Accordingly, the defendant will pay the plaintiff's costs,