NG LAI SIM v. LAM YIP SHING AND ANOTHER

CACV57/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 57 OF 2000

(ON APPEAL FROM HCA 2963 OF 1998)

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J U D G M E N T

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Hon Leong CJHC (giving the judgment of the court) :

1. The plaintiff Ng Lai Sim (the respondent) married Lam Tak Hing in 1977 and moved into Lot 63 in Shek Po Tsuen, Yuen Long but she took her meals at her father-in-law Lam Yuk Leung's house at Lot 4124. A small brick house stood on Lot 7 (the Property), adjacent to the plaintiff's house and her father-in-law's house. In 1977 Lam Yuk Leung used this house as shelter for the family water buffalo and for storage. The buffalo was sold in 1979. The plaintiff then used the house to store her motorised plowing machine and farming tools. The doors to this house were locked with a chain and padlock and the keys to the lock were kept by the plaintiff and her family members. An alley way between the lots was boarded up by the plaintiff to prevent others from access to the house at Lot 7.

2. From 1977 to 1995, the plaintiff carried out repairs to the house whenever it was necessary and throughout these years, the house was used exclusively by the family of the plaintiff. Her father-in-law died in 1995 but the plaintiff continued to use the house for similar purposes.

3. On 7 September 1997, the house collapsed. The plaintiff hired labour to clear the debris and paid for the cost of the clearance.

4. On 12 September 1997, the defendants' father Lam For Yau and the two defendants came to stop the debris clearance. Lam For Yau claimed he was the owner of the Property and offered to give the plaintiff $200,000 to return the Property to him. The plaintiff refused the offer. Some three weeks later, Lam For Yau and his sons came along and put up a fence around the Property but the plaintiff removed it and continued to use the Property. Later, the plaintiff found out from the land registry that Lam For Yau was the registered owner of the Property.

5. The plaintiff's case is she was in possession of the Property continuously for twenty years and she had the necessary intention to possess the Property to the exclusion of all other persons. She claimed a declaration that the defendants' title to the Property was extinguished pursuant to s.17 of the Limitation Ordinance and she had a better title than the defendants. She also claimed an Order that her name be substituted for the defendants' as owner of the Property in the Yuen Long Land Registry.

6. The defendants became the registered owners of the Property which was assigned to them by their father Lam For Yau. They claimed that the plaintiff had not proved adverse possession. They relied mainly on Lam For Yau 's evidence that the house had always been used by him and his daughter as storage place but he also allowed Lam Yuk Leung to store his buffalo there. His evidence is contained in a witness statement he made prior to his death. Lam For Yau said that in 1978, the buffalo was no longer kept there. He continued to use it as a storage place until he stopped using it in 1991 because the roof leaked but he still occasionally went there to inspect the place. There were some broken tools in the house. He believed they were the Property of the plaintiff's father-in-law but were apparently abandoned. In 1994 and 1997, the plaintiff had asked him twice to redevelop the Property but he refused. The 2nd defendant's evidence is their family and the plaintiff's father-in-law both used the house for storage of farming tools. Since 11 or 12 years old she went to the house to collect fire wood. She stopped doing so in 1978 when the family changed to use LPG as fuel. But she continued to visit the house occasionally.

7. The trial judge placed little weight on the evidence of Lam For Yau and rejected the evidence of the 2nd defendant that both Lam For Yau and the plaintiff's father-in-law together had used the house to store farming tools. The judge accepted the evidence of the plaintiff and on that evidence found that the plaintiff's father-in-law was in possession of the house from March 1977 to his death in 1995 and thereafter, the plaintiff was in continuous possession of the house. He also found the plaintiff had the necessary intention to possess the house to the exclusion of all other persons. He found that the plaintiff had sufficient physical possession of the house and the necessary intention to possess and that constituted adverse possession, albeit that the statutory period of adverse possession was by a succession of persons, namely the plaintiff's father-in-law from March 1977 to 1995 and the plaintiff herself from 1995 onwards. He held that the first squatter's period of possession by the plaintiff's father-in-law could be added to the plaintiff's own period of possession to complete the necessary statutory period of possession. He held plaintiff succeeded in her claim.

8. The defendants appealed.

9. Mr Chain for the defendants submits the judge overlooked two important points: (a) the issue of license and (b) the burden of proving adverse possession.

10. Mr Chain does not challenge the judge's finding that the plaintiff's father-in-law was in possession of the house from 1977 to 1995 but he argues that the plaintiff only had 3-4 years possession and on that alone the plaintiff cannot succeed in her claim. Whilst accepting the principle of successive squatters, Mr Chain argues that there was no evidence to show that the plaintiff's father-in-law was in adverse possession of the house from 1977 to 1995. He submits that the 2nd defendant's evidence is that the plaintiff's father-in-law and Lam For Yau together used the house for storage and implicitly Lam For Yau had permitted the plaintiff's father-in-law to use the house. There was no evidence of when that permission ceased and the judge has made no finding on this issue. The burden is on the plaintiff to show a lack of licence and since there is no evidence of a lack of licence, the burden to show adverse possession has not been discharged.

11. Mr Siu on the other hand, relying on Wong Luen Chung v Secretary for Justice [1998] 4 HKC 122, submits that what is necessary for the plaintiff to prove is factual possession and intention to possess the Property and there is no requirement to prove a lack of licence. If the defendants allege there was a licence, it is for the defendants to prove there was a licence in rebuttal of the plaintiff's intention to possess (animus possidendi).

12. Apart from referring us to the case Powell v McFarlance and Another (1979) 38 P & CR 452, Mr. Chain is unable to show any authority that to prove adverse possession, it is necessary to prove a lack of licence. The requirements set out in Powell on proof of adverse possession are factual possession and intention to possess and lack of licence is not one of the specific requirements. In our opinion, the question is whether in all the circumstances it is shown that it was more probable than not that Lam For Yau gave permission to the plaintiff's father-in-law to use the house. This is a question of fact. The judge's conclusion in this respect is there was no such licence. He said this on page 7 of his judgment:

13. While the judge said in his judgment that the issue of implied licence had not been relied upon by the defendants, it is implicit from what he said in the findings we referred to above, that he had considered the issue. The basis of the claim that Lam For Yau permitted the plaintiff's father-in-law to use the house is the evidence of Lam For Yau and the 2nd defendant's evidence that Lam For Yau and the plaintiff's father-in-law both used the house to store farming equipment. The judge clearly rejected this evidence which he was entitled to do. No criticism can be made of the judge in his findings of fact.

14. In any case, even if Lam For Yau did allow the plaintiff's father-in-law to use the house, the fact, which is accepted, that the house was locked and the keys to the lock were kept by the plaintiff and her family and the alley way was boarded up, to exclude others from access to the house is evidence from which it may be inferred that Lam For Yau had been dispossessed of the house by the plaintiff and her family. The plaintiff and her family had proved the animus possidendi.

15. We see no reason to interfere with the judge's conclusion that adverse possession had been proved by the plaintiff.

16. Mr Chain in his supplemental submission has raised two additional points. He submits that the whole discussion has been centred on the house and not on the land. If any adverse possession is established, it should be limited to the house and not the land.

17. The Property in dispute is the land and the house on it which constitute House Lot 7 which are inseparable. The parties have never argued to the contrary. There is no substance in this point.

18. The second point he has raised is that the plaintiff may have succeeded in her claim that the defendants' title was extinguished under s.17 of the Limitation Ordinance, the plaintiff would still not have acquired a good title to the Property so as to entitle her to have her name substituted as owner of the Property in land registration because the claim was not made representing the estate of her father-in-law. But Mr Chain indicates that he does not wish to pursue this point further.

19. In any case, the judge dealt with this at page 9 of his judgment and rejected the argument. He was correct to hold that the dispossession of the father-in-law or assignment by him to the plaintiff was not the only basis on which the plaintiff can make use of the period of possession by her father-in-law.

20. These grounds of appeal must fail.

21. The plaintiff in a Respondent's Notice argues that the judge should have held that the plaintiff was in continuous adverse possession for the whole period since March 1977 because the plaintiff was herself in possession of the house. We do not think it necessary to discuss this issue apart from saying that the judge found as a fact that the father-in-law was head of the household when the plaintiff married into the family and was in possession of the house. As daughter-in-law, the plaintiff used the house for storage by permission father-in-law. That is a finding on which no criticism can be made. We dismiss this ground of the Respondent's Notice.

22. The second matter raised is in respect of the costs of the proceedings below. The costs order nisi made by the judge is in the following terms:

23. The defendant argues that the plaintiff should not have raised this matter in this appeal and ought to have gone back to the judge to argue on the question of costs since the order made was a costs order nisi.

24. The plaintiff submits that the general principle is that the winning party should have his costs and Order 62, rule 3 of the Rules of the High Court provides that the court in exercise of its discretion in relation to orders as to costs "shall subject to this Order, order the costs to follow the event, except when it appears to the court that in the circumstances of the case some other order should be made as to the whole or any part of the costs."

25. It appears that no application on the costs order nisi had been made by any party within 14 days after it had been made by the judge and that order has become absolute under Order 42, rule 5B(6) of the Rules of High Court. To seek to vary this order by way of the present appeal is to deprive the trial judge of the benefit of argument on costs which is now presented to us. This is not right. Costs in any case is a matter of discretion of the trial judge and unless it can be demonstrated that the judge had exercised his discretion wrongly, this court is not prepared to interfere.

26. The plaintiff has suggested that the judge made the order he made out of benevolence to the defendants which was a totally irrelevant consideration so that the exercise of discretion was wrong.

27. We do not agree. What the judge said was that the plaintiff was bound to take out the action if she was to assert her right to possession and the defendant was justified to defend the action which sought to deprive them of the Property given to them by their father and this is not the same as the judge showing sympathy or being benevolent to the defendants. We see no reason to disturb the judge's order as to costs.

28. The end result of the above considerations is that the appeal of the defendants be dismissed with costs to the plaintiff.

29. The respondent's notice of the plaintiff is also dismissed with costs to the defendants.

30. Both orders for costs are orders nisi made under Order 42, rule 5B(6) of the Rules of High Court.