TSUI KWONG ON v. KOO LING SUNG also known as KOO LAM SAN

DCCJ 4550 / 2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4550 OF 2009

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BETWEEN

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JUDGMENT

Background

1.  The Plaintiff applied to amend his Statement of Claim and to file his second supplemental witness statement at the beginning of this trial. I allowed the application and trial proceeded accordingly.

2.  The Defendant was and is the registered owner of the property known as Flat B, 9th Floor, Wing Wah Building, 14-24 Sai Yeung Choi Street South, 40P Shantung Street, Kowloon, Hong Kong, erected on Sub-section 1 of Section A of Kowloon Inland Lot No.2131 and the Remaining Portion of Section A of Kowloon Inland Lot No.2131 ("the Property").

3.  The Plaintiff, in his Amended Statement of Claim, pleaded that:

“By an oral tenancy agreement made in or about December 1968 between the Plaintiff as tenant on the one part and the Defendant as the landlord on the other part ("the Tenancy Agreement"), the Property was let to the Plaintiff as a monthly tenant for domestic purpose commencing from December 1968 at a monthly rental of HK$320.00 inclusive of rates and payable in advance on the 1st day of each and every calendar month.”

“In or about the middle of 1987, the Defendant discontinued possession of the Property or was dispossessed of the same by the Plaintiff and since the aforesaid year the Plaintiff has enjoyed and shown his intention to have the exclusive use, possession and control of the Property.”

4.  The Plaintiff avers that since about 1987, the Plaintiff has been occupying the Property for over 22 years before the commencement of this action without paying any rent or licence fee to the Defendant as registered owner or anyone claiming or deriving title from, under or through him.

5.  It is alleged that it was the intention of the Plaintiff to exclude and dispossess the Defendant and the whole world for the use, possession, occupation and control of the Property, and the possession of the Plaintiff was without prior consent, permission or approval of the Defendant.

6.  The Plaintiff invokes section 7(2) and section 17 of the Limitation Ordinance, Cap. 347 ("the Ordinance") and claims, inter alia:

1.   a declaration that the Plaintiff by himself has been in adverse possession of the Property continuously for 20 years or more and that he is entitled as against the Defendant to the right, title, benefit and interest of and in the Property as beneficial owner thereof on the ground that the Defendant's previous right of action against the Plaintiff has been statue-barred by section 7 of the Ordinance;

2.   a declaration that before the commencement of this action, the right, title and interest of the Defendant to the Property was extinguished by section 17 of the Ordinance;

3.   an order that the name of the Plaintiff be entered into the register of owners kept in the Land Registry as the legal owner of the Property in the place of the Defendant.

7.  The Plaintiff has, through his solicitors, conducted land search of the Defendant’s address as stated in the Assignment of the Property dated 3 January 1961 when the Defendant purchased the Property. It is said that no record of such address could be found on the internet through www.CentaMap.com.

8.  The Plaintiff’s solicitors had also made a search on the register of the Probate Registry and there was no record of the Defendant.

9.  Enquiry was also made with the Immigration Department for the Death Record of the Defendant. No such record could be traced.

10.  The Plaintiff therefore believes that the Defendant is still alive and is within the jurisdiction. Substituted service of the proceedings was done by way of advertisement in Chinese newspapers.

11.  The Defendant has never made any appearance in this action.

12.  Mr. Lau for the Plaintiff submitted that the issue is whether the Plaintiff had been in adverse possession of the Property since 1987.

Adverse Possession

13.  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: per Litton PJ, Wong Tak Yue v. Kung Kwok Wai & Another [1998] 1 HKLRD 241 at 251.

14.  Mr. Lau referred me to various passages from Megarry & Wade, The Law of Real Property, 17th Ed. on the subject. I have no quarrel with the principles stated therein.

Limitation Ordinance

15.  The relevant provisions under the Limitation Ordinance are:-

“ Section 7(2): No action shall be brought by any other person to recover any land after the expiration of 12 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:

Section 8(1): Where the 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 the dispossession or discontinuance.

Section 13(1): No right of action to recover land shall be deemed to accrue unless the land is in the 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.

Section 17:  Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

16.  The period of limitation under the current section 7(2) is 12 years, which is reduced from the previous requirement of 20 years.

17.  Mr. Lau submitted that the limitation in the present case is 20 years, as section 38A of the Ordinance provides that if the cause of action arose before 1 July 1991, the period would remain as if it was before the amendment to section 7(2).

18.  The Plaintiff's case is that he has been occupying the Property for over 22 years before the commencement of this action.

Legal Principles

19.  The law in relation to adverse possession is well settled. A person claiming to be in adverse possession must be shown to have both factual possession and the requisite intention to possess animus possidendi: Wong Tak Yue v. Kung Kwok Wai & Another [1998] 1 HKLRD 241, approving the principles enunciated by Slade J in Powell v. McFarlane (1979) 38 P & CR 452.

20.  More recently Cheung JA in Yu Kit Chiu v. Chan Shek Woo CACV 137 of 2010 has re-visited the principles for adverse possession as affirmed by the Court of Final Appeal in Wong Tak Yue.

21.  Cheung JA also examined J A Pye (Oxford) Ltd. and another v. Graham and another [2003] 1 AC 419 (which Mr. Lau relied upon) where the House of Lords affirmed the principles laid down by Slade J in Powell.

22.  Factual possession signifies an appropriate degree of physical custody and control. It must be a single and exclusive possession. The question what acts constituted a sufficient degree of exclusive physical control must depend on circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. What must be shown as constituting factual possession is that the squatter has been dealing with the land as an occupying owner might have been expected to deal with it and that no one else has done so:  p.436, J A Pye approving Slade LJ in Powell.

23.  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 (per Slade J in Powell at pp 471-472).

24.  The question of intention to possess is one of facts: per Cheung JA, para.16, Yu Kit Chiu.

25.  Cheung JA referred to J A Pye  where Lord Browne-Wilkinson held that

“ Many of the difficulties with these sections which I will have to consider are due to a conscious or subconscious feeling that in order for a squatter to gain title by lapse of time he has to act adversely to the paper title owner.  It is said that he has to “oust” the true owner in order to dispossess him; that he has to intend to exclude the whole world including the true owner; that the squatter’s use of the land has to be inconsistent with any present or future use by the true owner.  In my judgment much confusion and complication would be avoided if reference to adverse possession were to be avoided so far as possible and effect given to the clear words of the Acts.  The question is simply whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner.”

“ The taking or continuation of possession by a squatter with the actual consent of the paper title owner does not constitute dispossession or possession by the squatter for the purposes of the [Limitation] Act.”

“there will be a “dispossession” of the paper owner in any case where (there being no discontinuance of possession by the paper owner) a squatter assumes possession in the ordinary sense of the word. Except in the case of joint possessors, possession is single and exclusive. Therefore if the squatter is in possession the paper owner cannot be. If the paper owner was at one stage in possession of the land but the squatter’s subsequent occupation of it in law constitutes possession the squatter must have “dispossessed” the true owner for the purposes of [our section 13(1)].” (with emphasis added)

26.  Cheung JA stated that when referring to paragraph 8(1) of Schedule 1 of 1980 Limitation Act [i.e. our section 13(1)], Lord Browne-Wilkinson held that the reference to adverse possession in that paragraph is directed not to the nature of the possession but to the capacity of the squatter.

27.  Cheung JA noted a difference in approach between Wong Tak Yue and J A Pye.

28.  In Wong Tak Yue it was held that a statement of the squatter that he was willing to pay rent to the owners if they had requested payment and that he was ready and willing to do so was inconsistent with the intention to possess.

29.  Such an approach was different from the House of Lords’ determination of a similar issue in J A Pye. Lord Browne-Wilkinson at paragraph 46 held that

“ Once it is accepted that the necessary intent is an intent to possess not to own and an intention to exclude the paper owner only so far as is reasonably possible, there is no inconsistency between a squatter being willing to pay the paper owner if asked and his being in the meantime in possession. An admission of title by the squatter is not inconsistent with the squatter being in possession in the meantime.”

30.  The difference is not germane to the appeal in Yu Kit Chiu and the Court of Appeal did not find it necessary to address this specific point.

31.  This specific point, however, did arise in this case which I shall deal with later.

Finding

32.  As Cheung J held in Chang Shun Tak v. Leung Sun Fat HCA 13809/1997, 18 August 2010, the evidence the squatter has to adduce must be “compelling” (c.f. Wu Yee Pak v. Un Fong Leung [2005] 2 HKLRD 169). The standard of proof remains the balance of probabilities, which means that the evidence adduced must be of such a quality and nature that, if accepted on the balance of probabilities, it is sufficient to establish both factual possession as well as an intention to possess.

33.  The Plaintiff himself is the only witness at trial. He has adopted his 3 witness statements as his evidence in chief.

Factual Possession

34.  In relation to factual possession, according to the Plaintiff, in 1968, he and 2 male friends entered into a tenancy agreement of the Property with a Mrs. Koo, a lady who claimed to be the wife of Koo Ling Sung/Koo Lam San (i.e. the Defendant) at a monthly rental of HK$320.00 and a rental deposit of HK$640.00.

35.  The Plaintiff said that he and his 2 male friends contributed towards the rental deposit (his 2 friends paid HK$210.00 and HK$220.00 respectively and he paid the remaining HK$210.00). However, his 2 male friends did not move in the Property at all, and did not ask for the refund of their respective contribution towards the deposit.

36.  As a result, only the Plaintiff moved in the Property in 1968.

37.  The Plaintiff went on to say that he and Mrs. Koo signed a handwritten document which signified the receipt of rental deposit. Due to lapse of time, the Plaintiff has lost this piece of document.

38.  The Plaintiff alleged that Mrs. Koo used to come to the Property to collect rent from the Plaintiff but she stopped doing so since 1987.

39.  The Plaintiff says that he has resided in the Property together with his family members including his wife, son, daughter-in-law and grandchildren since 1968.

40.  The Plaintiff applied to the authority in the PRC for his son’s emigration to Hong Kong in 1982. The Plaintiff used the address of the Property as his address in Hong Kong.

41.  His son came to reside with the Plaintiff at the Property in 1987 and the Plaintiff’s wife joined them in Hong Kong in 1991.

42.  In 1994, his daughter in law and the eldest grandson came to Hong Kong to join his son. The younger grandson also resided at the Property since his birth in 1999. His son’s family moved out of the Property in 2003.

43.  It is said that he used the address of the Property to open his bank account with HSBC.

44.  However, from the Certificate of Registered Particulars of the Plaintiff issued by the Immigration Department of the HKSAR, the Plaintiff's reported address as at 26 March 2007 was "Flat 2109, Fu Loy House, Fu Cheong Street, Shamshuipo", which was his son's address.

45.  The Plaintiff explained that since it was his son who filled out the form at the Immigration Department for him, the son put in his own address and not the address of the Property. He asserts that he has never resided at his son's home on a long term basis but merely had stay-over occasionally.

46.  There is no evidence showing that the Plaintiff has parted physical possession of the Property as at 2007. I am prepared to accept that he was in continuous physical possession as from 1987.

47.  However, the question is whether he was in “exclusive physical control” or “exclusive possession” of the Property as stipulated by Slade LJ in Powell.

48.  The Plaintiff also relied on the following improvement to the Property which he paid for over the years:

(1)   in 1994 or 1995, he contributed towards the refurbishment of Wing Wah Building (outer wall and television wire);

(2)   at the same time he had also replaced the iron window frames with aluminum window frames of the Property, as well as converting the bath tub into shower;

(3)   it costs him HK$18,000.00 to HK$20,000.00;

(4)   at the end of 2003, he has spent HK$40,000.00 to renovate the Property;

(5)   in 2010, he paid HK$130,000.00 to refurbish and re-partition the Property.

49.  The fact that the Plaintiff has spent money on improving the Property does not mean that he has been dealing with the Property as an occupying owner might have been expected to deal with it and that no one else has done so: per Slade LJ, Powell at pp.470-471.

50.  It is equally consistent with a tenant who is willing to spend money on improving his rented accommodation for his and his family’s enjoyment. This is different from cases where the squatter has, for example, fenced off a piece of land against the true owner (as supposed to against the public) from entering.

51.  Even though the Plaintiff has been in physical possession of the Property since 1987, I am not convinced that the Plaintiff had been dealing with the land as an occupying owner might have been expected to deal with and that no one else has done so.

Intention to Possess

52.  To show his intention to possess, the Plaintiff said that he has stopped paying rent as from 1987.

53.  According to the Plaintiff, the monthly rental was collected by Mrs. Koo in person. She came to the Property every month in the year 1968, 1969 and 1970. The intervals of her visits to the Property became longer over the years, ranging from once every 3 months to up to 9 months. It is said that Mrs. Koo would make a telephone call to the Plaintiff before each of her visit.

54.  The Plaintiff, however, did not have Mrs. Koo's contact number nor address.

55.  Mrs. Koo was last seen by the Plaintiff in July or September of 1987 when she visited the Property to collect rental from the Plaintiff.

56.  The Plaintiff had never met the Defendant in person. He had no idea where the Defendant resided and did not know any of his friends and relatives. It is said that he could not pay the rent to the Defendant because he did not know his whereabouts and the Defendant’s residence was not known to him.

57.  Thus he has not paid any rent to the Defendant since Mrs. Koo’s visit of 1987 and the Defendant or his representative has failed to collect the rent from the Plaintiff since then. It is said that the Plaintiff occupied the Property as a squatter since 1987.

58.  The Plaintiff was asked at trial whether he would keep on paying rent if someone came to collect rent from him after 1987.

59.  The Plaintiff said that if Mrs. Koo visited the Property, he would have paid her.

60.  This is exactly what was in issue in Wong Tak Yue. The Court of Final Appeal held that a statement of the squatter that he was willing to pay rent to the owners if they had requested payment and that he was ready and willing to do so was inconsistent with the intention to possess.

61.  The Plaintiff also produced various demands for rates and/or Government rent dating from 30 September 1987 up to 12 May 2009 (p.45 to p.147, Trial Bundle). The demands were all issued to the Defendant.

62.  In his second supplemental statement, the Plaintiff stated that he did not apply to change the name on those demands from the Defendant’s to his, because he thought the name on the demands could only be the name of the landlord.

63.  Mr. Lau sought to argue that it was the Government policy that prevents the Plaintiff from changing the name on those demands.

64.  As said by Nourse LJ in Buckinghamshire County Council v. Moran [1990] 1 Ch 623, it is the intention of the squatter that is essential.

65.  The Plaintiff said at trial that he thought he had no right to apply for such a change as he is only a tenant.

66.  This suggests that the Plaintiff did not view himself as owner of the Property, and that he did not have the intention to dispossess the true owner.

67.  I remind myself what the Court of Final Appeal in Wong Tak Yue stated:

“The question of intention to possess, as with any other question of intention, is one of fact. Whether it can be established depends on assessment of all the circumstances in a particular case.

Where the occupier had made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the court should approach them with scepticism. The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they might deserve. Conversely, where the occupier had made statements as to what was his intention and such statements were against his interest, the court would usually accord to them considerable weight. A defendant’s intention to pay rent if the owners had requested payment demonstrated that he was treating himself as enjoying possession under a lawful title from the owners. His intention to possess was not “as of wrong” but was “as of right”.”

68.  As such, the Plaintiff’s statements which are against his interest would carry considerable weight.

69.  I am not convinced that there is compelling evidence to show that the Plaintiff was occupying the Property other than as a tenant after 1987.

Conclusion

70.  In the light of my finding that the Plaintiff has failed to establish both factual possession and intention to possess.

71.  In case I am wrong regarding factual possession, and also for the sake of completeness, I shall deal with intention to possess in more detail.

72.  The Plaintiff had indicated that he would continue to pay rent to Mrs. Koo had she turned up after 1987.

73.  As noted by Cheung JA in Yu Kit Chiu, there is a difference in approach between Wong Tak Yue and J A Pye when dealing with a statement of the squatter that he was willing to pay rent to the owners if they had requested payment and that he was ready and willing to so do.

74.  The Court of Final Appeal in Wong Tak Yue held that this is inconsistent with the intention to possess. The House of Lords in J A Pye held that there is no inconsistency between a squatter being willing to pay the paper owner if asked and his being in the meantime in possession.

75.  Unlike the Court in Yu Kit Chiu, this Court has to decide which approach to follow.

76.   Mr. Lau urged me to follow the House of Lords in J A Pye which is a highly persuasive authority.

77.  However, I am bound by the Court of Final Appeal's decision in Wong Tak Yue.

78.  Mr. Lau then sought to argue that a distinction can be drawn as the present case is an uncontested proceedings while Wong Tak Yue was a contested proceedings all the way.

79.  I failed to see how this would allow this Court to depart from the decision of Wong Tak Yue.

80.  The Plaintiff was willing to pay rent to Mrs. Koo and the reason he did not do so was that Mrs. Koo did not come along to collect rent from him. That being so, the Plaintiff did not have the requisite intention to exclude the true owner (Mrs. Koo being the agent of the Defendant in collecting rent).

81.  In the premises, I find that the Plaintiff has failed to prove that he had the intention to dispossess the Defendant of the Property, or that he has failed to establish that he had the intention to possess the Property to exclude the world at large including the true owner of the Property, i.e. the Defendant.

82.  The Plaintiff has therefore failed to prove adverse possession for the required period.

Order

83.  I order that the Plaintiff's claim be dismissed.

84.  I also make a nisi order that the Plaintiff do pay the Defendant costs of this action, including any costs reserved, to be taxed if not agreed. In the absence of application within 14 days to vary, the costs order nisi shall be made absolute.