CHAN CHO FAI v. HON YING MUK

DCCJ 2935/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION No. 2935 OF 2012

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DECISION

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Introduction

1.  This is an appeal of Hon Ying Muk (“Ho”), the defendant, from the decision of Master Ho dated 24 October 2013 whereby the master granted Chan Cho Fai (“Chan Junior”), the plaintiff, summary judgment against Hon in respect of the latter’s trespass of a piece of government land situated in Sai Kung.

2.  This appeal is by way of rehearing of the plaintiff’s summary judgment application: Hong Kong Civil Procedure 2014 Vol.1 §58/1/2. The transcripts of the hearing before the master have been available to me. Since Mr Cheung, counsel for Hon (who did not appear before the master), mounts new arguments before this court, the reasons given by the master are of little relevance to the present debate.

Background Facts

3.  Most of the background facts are not in dispute and can be summarized as follows.

4.  The government land in question is now known as No.41 Luk Mei Village, Ho Chung, Sai Kung (“the Land”). On 11 September 1978, Mr Chan Fuk Kau (“Chan Senior”), the late father of Chan Junior, obtained a Crown Land Licence (“Old Licence”) relating to the occupation and use of the Land from the Government commencing from 1 January 1978. It expired on 31 December 1978.

5.  Chan Senior passed away in February 2001.

6.  On 15 November 2011, Chan Junior obtained a Government Land Licence from the Government (“the Licence”) whereby he was given permission to occupy the Land for accommodation purpose from 1 January 2012 to 31 December 2012. The Licence is a different licence altogether and no reference to the Old Licence was made in the Licence.

7.  The Licence made it clear that there was no landlord and tenant relationship thereby and the Licence was granted expressly subject to certain General and Special Conditions.

8.  General Condition No.4 provided that on expiry or cancellation of the Licence, the Land shall be cleared and all structures shall be removed therefrom to the satisfaction of the Director of Lands.

9.  General Condition No.13 provided that Chan Junior as the licensee shall throughout the period of the Licence maintain the Land or any structures permitted to be erected therein in good and substantial repair and condition and on expiry or cancellation of the Licence shall deliver up the Land in such repair and condition and remove the structures form the Land in accordance with General Condition No.4.        

10.  Not having yet commenced occupation of the Land on the strength of the Licence, Chan Junior discovered the presence of Hon at the Land and his unauthorized building/alternation works carried out thereat (altogether 37 items identified). Therefore, Chan Junior caused his solicitors to write to Hon on 31 July 2012 demanding vacant possession of the Land and damages to be paid by Hon.

11.  There came a reply letter from the solicitors of Hon dated 15 August 2012. There, it was asserted that Hon had been possession of the stone hut built on the Land for over 12 years and hence Hon claimed adverse possession by virtue of section 17 of the Limitation Ordinance, Cap.347 (“LO”).

12.  Chan Junior commenced these proceedings by the Writ herein against Hon for possession of the Land and damages for trespass on 22 August 2012.

13.  On the other hand, Chan Junior’s solicitors also lodged a complaint about Hon’s trespass and unauthorized building/alternation works with the District Lands Office (“DLO”) by way of a letter dated 23 August 2012.

14.  The DLO gave a substantive reply by way of a letter dated 10 October 2012. The DLO indicated to Chan Junior that when they possessed the transfer application of the Old Licence, Hon raised objection and asked for the transfer in his favour. The DLO rejected his request at a meeting on the ground that Hon was not a direct family member of Chan Senior. The DLO further confirmed that they had never authorized or consented to Hon’s occupation of the Land.

15.  All the foregoing matters are supported by undisputed documentary evidence.

Plaintiff’s Evidence

16.  Chan Junior’s evidence is that Chan Senior occupied the Land by virtue of the Old Licence until his death in 2001. Thereafter, he and his sibling occasionally visited the Land and found no sign of Hon’s presence until May 2011.

17.  He further adduced evidence concerning reinstatement costs of the structures on the Land by way of a quotation of a contractor.

18.  I note that the Licence has apparently expired though it was still operative when this action was commenced. Ms Wong, counsel for Chan Junior, informs this court that the Licence has been renewed upon payment made by Chan Junior. Mr Cheung does not demur.

Defendant’s Evidence

19.  Hon made a short affirmation only to confirm the truth of the matters pleaded in his Defence and Counterclaim filed on 11 October 2012 and to raise a challenge to Chan Junior’s locus to sue. Hon does not support his case with any documentary evidence.

20.  His Defence and Counterclaim is, however, not verified by a statement of truth, in contravention of the rules. There, Hon asserted that he entered and occupied the Land in 1989 when the same was abandoned with no other occupants. He then improved the Land and evinced his animus possidendi in 1998. Counsel for Hon on the last occasion clarified with the master that the year number should be 1989 rather than 1998 and it was only a typographical error. Hon further alleged that Chan Junior was fully aware that Hon had been occupying the Land before the grant of the Licence. Hon added that after entering the Land, he applied for electricity and water supplies for his use on the Land in 2011.

21.  Hon confirmed that he had raised objections to Chan Junior’s application for the transfer of the Old Licence to Chan Junior pursuant to a notice given by the Lands Department but in vain.   

22.  Hon also made a plea of adverse possession based on his occupation of the Land for more than 12 years before the grant of the Licence to Chan Junior. On that basis, he counterclaims for a possessory title of the Land pursuant to section 17 of the LO.

23.  Mr Cheung at this hearing accepts that, the Land being the property of the Government, Hon can only claim possessory title against the Government and the necessary period of adverse possession is 60 years by virtue of section 38A of the LO. Hon’s alleged adverse possession starting from 1989 is not long enough to earn him the possessory title to the Land even if his evidence is accepted in its entirety. Mr Cheung stresses that this application does not concern the counterclaim. For the purpose of this application, Mr Cheung merely raises a short point and the only defence is made in reliance of section 7(2).

Analysis

24.  In view of the legal challenge to the locus of Chan Junior to maintain this action for trespass in the capacity of a mere licencee on the pleadings, Ms Wong very helpfully draws the attention of this court to a number of cases to show that there is nothing in this challenge. Those cases include Ricas Properties Ltd v Armed Forces Trading Co Ltd v Armed Forces Trading Co Ltd [2008] 5 HKC 210, Manchester Airport Plc. v Dutton and Ors. [2000] QB 133, Riseway Properties Ltd v Star River Imitation Ornaments Ltd, unreported, DCCJ 6789 of 2004, 28.1.2008, Monsanto plc v Tilly [2000] Env LR 313, Vehicle Control Services Limited v The Commissioners for Her Majesty’s Revenue & Customs [2013] STC 892 and Alamo Housing Co-operative v Meredith [2003] H.L.R. 62.

25.  On these authorities, it is clear that a licensee not in occupation may claim possession against a trespasser if that is a necessary remedy to vindicate and give effect to such rights of occupation as by contract of his licensor he enjoys or that is necessary to fulfill his covenants under the licence. Since Mr Cheung does not argue otherwise, I need not give my analysis of the foregoing cases. Suffice it to say, I have no doubt that Chan Junior is entitled to maintain this action as the licensee of the Land.

26.  Then I turn to the section 7(2) defence and it is necessary to set out the entire section 7 as follows:

(1) No action shall be brought by the Crown to recover any land after the expiration of 60 years from the date on which the right of action accrued to the Crown or, if it first accrued to some person through whom the Crown claims, to that person.

(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:

Provided that, if the right of action first accrued to the Crown through whom the person bringing the action claims, the action may be brought at any time before the expiration of the period during which the action could have been brought by the Crown, or of 12 years from the date on which the right of action accrued to some person other than the Crown, whichever period first expires. (Amended 31 of 1991 s. 5)

27.  If this court accepts the evidence of Chan Junior that Hon only occupied the Land in 2011 and rejects the evidence of Hon that he started the occupation in 1989, the section 7(2) defence cannot get off the ground.

28.  There is clearly a factual dispute as to when Hon started his occupation of the Land. Ms Wong submits that the mere assertion of Hon does not ipso facto provide leave to defend and cogently points out the unsatisfactory aspects of the evidence of Hon. Ms Wong highlights the complete lack of documentary evidence of Hon’s alleged occupation since 1989. She also raises query as to why Hon waited until 2011 to apply for public utility services if he already occupied in 1989.

29.  I agree that Ms Wong’s criticisms have much force bearing in mind it is incumbent for Hon to show a reasonable and bona fide defence with credible evidence. That said, I cannot say that his evidence is incapable of belief in the absence of contrary contemporaneous documentary and/or direct evidence. The fact that Hon only applied for public utility services in 2011 is no conclusive evidence that he had not, legally or otherwise, enjoyed such services before his application.

30.  Though I am unimpressed by the evidence of Hon, when actually Hon entered the Land and started his possession thereof remains a live issue to be resolved at trial. I cannot make such a factual finding on affidavits.

31.  Now I proceed to consider the availability of the section 7(2) defence to Hon on the assumption that he did start his adverse possession of the Land in 1989. I should mention that in doing so I accept that Hon only made a typographical mistake in his Defence about the number of year when he started to have the animus possidendi.

32.  Mr Cheung’s argument runs as follows. He submits that the central question is whether Chan Junior not being the registered owner of the Land can bring this action in his own capacity when Hon has already adversely possessed the Land for the requisite period of time. The requisite period of time, he contends, is 12 years and not 60 years since this is not an action brought by the Government.    

33.  I disagree with Mr Cheung’s construction of section 7(2) and I cannot see how a defence can be made out under this sub-section on the facts of this case. Chan Junior only became the licensee in November 2011 and the Licence only took effect in January 2012. I should add that though the Lands Department in its letter dated 10 October 2012 characterised the application of Chan Junior for the Licence as a transfer application, it is plain that the Licence was a separate licence with different terms and conditions and not just a renewed Old Licence. The fact that only a direct family member of Chan Senior could apply for the Licence does not mean that the Licence is not a new licence.

34.  On the strength of the Licence, Chan Junior brought this action to recover the Land in August 2012 and he claims the right of action through the Government, who granted him the Licence. The right of action first accrued to the Government in 1989. As such, according to the proviso to section 7(2), this action may be brought at any time before the expiration of the period during which the action could have been brought by the Government. In this case, the period should be 60 years and it means the Government could have been brought this action in or before 2049.

35.  Mr Cheung’s submission does not take into account the clear effect of the proviso to section 7(2). Chan Junior’s action is well within time. There is no merit in the purported section 7(2) defence at all.

36.  Upon his construction of section 7(2), which I do not agree, Mr Cheung further relies on Markfield Investments Ltd v Evan [2001] 1 WLR 1321 (CA) and Chung Ping Kwan and Ors v Lam Island Development Company Limited [1996] 2 HKLR 315 (P.C.) to explain certain fundamental principles of adverse possession. With respect, I cannot see how they are relevant to the present case. For the avoidance of doubt, I make it clear that I accept time should begin to run against the Government (but not Chan Senior and/or Chan Junior having no interest in the Land) when it was dispossessed the Land by Hon allegedly in 1989. However, this does not assist Hon in the present case at all given the proviso to section 7(2) for the foregoing reasons.

Conclusion and Orders

37.  In the circumstances, I agree that Chan Junior is entitled to summary judgment and therefore I affirm the order made by the master.   

38.  Costs should follow the event. Chan Junior is entitled to costs of this application, to be taxed if not agreed with certificate for counsel. I also allow Chan Junior legal aid taxation.

39.  Lastly, I thank Mr Cheung and Ms Wong for their helpful research and succinct submissions.