NG LAI SIM v. LAM YIP SHING AND ANOTHER

HCA 2963/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2963 OF 1998

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J U D G M E N T

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The Plaintiff's claim

1. The Plaintiff is a farmer. In March 1977, she married Lam Tak Hing, the son of Lam Yuk Leung and moved to Shek Po Tsuen which is a village in Yuen Long in the New Territories. At the beginning, the Plaintiff lived with her husband in House Lot 63 in Shek Po Tsuen. Her parents-in-law lived in House Lot 4124 of the same village. She had meals in her parents-in-law's house whilst at night she slept in her own house in Lot 63. She now lives in Lot 4124.

2. The Defendants are the registered owners of House Lot No.7 in the same village ("the Property"). They acquired the Property from their father Lam For Yau by an assignment dated 11th December 1997. The Property is very close to Lot 4124.

3. In 1977, there was a house on the Property, it was rather primitive in nature. The Plaintiff and her father-in-law used the house as a shelter for their water-buffalo. The house was also used by their family as a toilet and storage for firewood, farming tools and other miscellaneous items. The house was made of bricks with a tile roof. Part of the house was covered with adhesive tapes and asphalt.

4. In 1979, the Plaintiff stored a motor ploughing machine in the house. The house was then no longer used as a toilet and instead was used as a storage for farming tools. The buffalo was also sold in 1979.

5. From 1977 onwards, the Plaintiff carried out repair to the house. Whenever a wall collapsed, bricks and cement were used to restore the wall. When the roof leaked, it would be repaired with new tiles and iron sheets. Between the Property and the next house was a small alley, the Plaintiff also used wooden planks to block the alley at both ends. Throughout the years, the Property was only used by her family. In 1995, the Plaintiff's father-in-law died and she continued to use the Property. The door to the house was locked with a chain and padlock.

6. On 7th September 1997, the house on the Property collapsed after heavy rain. The Plaintiff hired workers to clear the collapsed building and paid for the cost of the clearance. On 12th September 1997, Lam For Yau and his children came and stopped the clearance. Lam For Yau told the Plaintiff that the Property was his. The Plaintiff told them that she had used the house. Lam For Yau told her that he would give her $200,000 if she gave back the Property to him. This was refused by the Plaintiff.

7. On 3rd October 1997, Lam For Yau and his son, Lam Yip Shing, the 1st Defendant, came and fenced the Property. There was a quarrel between them and the Plaintiff. During the argument the 1st Defendant said that if the Land Office record showed that the Property was the Plaintiff's, then he would give it to her. After Lam For Yau left, the Plaintiff removed the fence and conducted a search of the owner of the Property. She found that Lam For Yau was the registered owner.

The Defendants' case

8. Lam For Yau is now dead. Before his death, he made a witness statement dated 18th October 1998 in which he said that Lam Yuk Leung had asked for his permission to keep the buffalo inside the house in the Property. He allowed Lam Yuk Leung to do so. At that time, the Plaintiff was not married to the son of Lam Yuk Leung. Lam For Yau and his daughter used the house to store farming tools, hay and firewood. Some years later, he did not use hay and firewood as fuel and he stopped storing hay and firewood in the house but he still used the house for storing farming tools and other items.

9. In about 1978, he found that the buffalo was no longer in the house and at that time, the house was used to store his old farming tools and other household items. There were also some other old farming tools and items which he believed belonged to Lam Yuk Leung.

10. In 1991, the roof of the house was leaking heavily. From that time onwards, he stopped storing things in the house but some of the broken and useless farming tools and items were still stored there. He would go to inspect the house occasionally. In 1994, the Plaintiff asked him to allow her to redevelop the Property. He refused. In 1997, the Plaintiff again asked him for permission to redevelop the Property. Again, he refused. He fenced off the Property in November 1997, but after four days, the fence was removed, and he believed it was removed by the Plaintiff.

11. The 2nd Defendant also gave evidence. She is 45 years of age. She said that ever since she was 11 or 12 years old, she had been helping her father to get farming tools and firewood from the house. The house was without any window or door. As she grew older, the house leaked and they only used the house for storing some old farming tools. Her father and the Plaintiff's father-in-law stored things there. She gathered firewood from the house until 1978 when the family started to use LP gas for cooking. By that time, the farming tools were broken but they were still kept there. She still went there regularly to look at the house and the place was not locked.

12. The 1st Defendant also stated that there was no lock or door to the house. Lam Lim Yung, who is a member of same Fong as Lam For Yau, stated that he walked past the house frequently. It was a dilapidated house with no door or lock.

Adverse possession

13. In this action the Plaintiff seeks the following relief :

(1) A declaration that the Defendants' title to the Property was extinguished pursuant to s.17 of the Limitation Ordinance.

(2) A declaration that the Plaintiff has a good title to the Property and a better title to the Property than the Defendants.

(3) An order that the registration of the Defendants as owners of the Property be deleted and vacated from the Yuen Long Land Register of the Land Registry and substituted therein the Plaintiff's name.

14. The operation of the Limitation Ordinance ("the Ordinance") is fully set out in the decision of the Privy Council in Chung Ping Kwan v. Lam Island Development Co. Ltd. [1996] 2 HKC 447. These are the relevant sections. Section 7(2) deals with actions brought to recover land. It provides :

"No action shall be brought by any ... 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 ..."

Thus it is essential to identify the date on which the right of action first accrued to the plaintiff or a person through whom he claims. Section 8 concerns the accrual of a right of action in the case of present interests in land. Section 8(1) provides :

"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." (emphasis added)

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 :

"... at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land ... the title of that person to the land shall be extinguished."

15. The Plaintiff's claim is based on adverse possession. In Wong Tak Yue v. Kung Kwok Wai David & Another [1998] 1 HKC 1, the Court of Final Appeal stated the relevant principles on adverse possession :

1. The owner of the land with the paper title was deemed in possession of the land. If the law was to attribute possession to a person who could establish no paper title to possession but claimed to be a mere trespasser, the burden was upon him to establish his intention to exclude the whole world from the land, including the owner of the land. Only in this way could be established 'adverse possession' in terms of s 13(1) (page 14E).

2. A person claiming to be in adverse possession must have both possession and the requisite intention to possess. The question of intention to possess, as with any other question of intention, was one of fact. Whether the intention could be established depended on an assessment of all the circumstances in a particular case (page 14E).

16. The Court of Final Appeal approved Powell v. McFarlane & Another (1979) 38 P & CR 452 where Slade J stated that :

" Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. ..."

He further held that 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 processes of the law will allow."

Had the true owner been dispossessed?

17. Where the owner of land is entitled in possession, time begins to run as soon as both - (i) the owner has been dispossessed, or has discontinued his possession; and (ii) adverse possession has been taken by some other person. "Dispossessed" merely means that the owner has been driven out of possession by another, whereas "discontinued" means that the owner has abandoned his possession : Megarry & Wade : The Law of Real Property, 5th Edition, page 1033.

18. In my view, the true owner of the Property had been dispossessed from 1977 onwards. While the evidence of Lam For Yau is admissible under the hearsay rules, little weight should be attached to his evidence. After all, the Plaintiff did not have the opportunity to cross-examine him and test the credibility of his statement. I accept the evidence of the Plaintiff that from 1977 onwards, it was only her family who made use of the house for keeping the buffalo and for storing their farming tools and equipment. In my view, the Plaintiff was the best person to tell how the house had been used since 1977. She and her family made use of the Property after that date. I do not accept the 2nd Defendant's evidence that the house had been used by both her father and the Plaintiff's father-in-law. Although the 2nd Defendant said that her family continued to store the farming tools there, it is more likely that these tools were abandoned because after all, she described them as being broken and useless tools.

19. While I accept that the 2nd Defendant had been helping her father by going to the house to collect firewood, I do not accept her evidence that she continued to do so until 1978. She did not refer to any specific year in her witness statement as when she stopped going to the house to collect the firewood. There was no reason for her to recall that it was in 1978 that she stopped doing so.

Who was in possession?

20. Next it is necessary to determine who in the Plaintiff's family has been in possession of the Property. The Plaintiff asserts that she has been in possession of the Property from March 1977 onwards. I disagree. When she married in March 1977, her father-in-law Lam Yuk Leung was the head of the household. From that time onwards until his death, the one in possession of the Property must be Lam Yuk Leung and not the Plaintiff. It is clear from the evidence that it was Lam Yuk Leung who permitted and asked the Plaintiff to use the house for storage. I do not accept that in a traditional Chinese household in the New Territories in the 1970's, the daughter-in-law would exercise such an assertive role as soon as she married into the family by acquiring possession of the Property.

21. In 1988, Lam Yuk Leung assigned Lot 4124 to the Plaintiff and her husband. When she asked for the title deeds of the Property, Lam Yuk Leung told her dismissively that she should just use the Property and not ask so many questions. The Plaintiff's possession came into existence after the death of her father-in-law and continued thereafter when she continued to use the house for the storage of her farming tools and other items.

Successive Squatters

22. However, the fact that the Plaintiff was not in possession from 1977 to 1995 is not fatal to her claim. Because the law is clear that the second squatter can add the period of possession of the first squatter to her own period of possession in order to complete the period of possession : Megarry & Wade at page 1036.

23. Mr So, Counsel for the Defendants, argued that the Plaintiff could only rely on the period of possession by her father-in-law if he had assigned his interest to her, or that she had dispossessed him. There was no such assignment.

24. In my view, dispossession of the father-in-law or assignment by him to the Plaintiff is not the only basis in which the Plaintiff can make use of the period of possession by her father-in-law. The fact in this case is that the father-in-law died in 1995 and the Plaintiff continued to possess the Property. It is clearly stated by Kay LJ in Willis v. Earl Howe [1893] 2 Ch 545 at 553 "a continuous adverse possession for the statutory period, though by a succession of persons not claiming under one another, does, in my opinion, bar the true owner".

Has the Plaintiff proved the intention to possess?

25. In my view, the Plaintiff has proved the intention to possess both by her father-in-law since March 1977 and by herself since 1995. I accept her evidence that her family had put a chain and padlock to the door. This is the best evidence that they intended to possess the Property to the exclusion of all other persons including the owner with the paper title. I accept her evidence that repairs had been carried out to the house throughout the years. The blocking of the two ends of the narrow alley is consistent with their intention to exclude others from the Property, although it has to be recognised that the area that was blocked off may not fall within the boundary of the Property itself. I accept her evidence that the house collapsed in September 1997. After it collapsed, she hired workers to clear the debris and paid $12,000 for the clearance. This is consistent with her and, before that, her father-in-law's intention to possess the Property to the exclusion of others. At that stage, she had not received legal advice that she could claim ownership after being in possession for 20 years.

26. What Mr Lam For Yau said regarding the Plaintiff's request in 1994 to acquire the Property should not be given any weight for the same reason I have given earlier. The 2nd Defendant's evidence in this regard is also hearsay in nature. I accept the Plaintiff's evidence that she had not asked Lam For Yau in 1994 to transfer the Property to her. I do not accept the Defendants' evidence that after the Property collapsed, the Plaintiff had asked the 2nd Defendant and her father to transfer the Property to her. The evidence clearly shows that all along she had treated the Property as her own. She paid for the clearance of the debris. It is inherently improbable that she would suddenly ask the 2nd Defendant and her father to transfer the Property to her. I further accept her evidence that it was Lam For Yau who offered to pay her $200,000 if she gave back the Property to him.

27. After the Defendants and their father had fenced off the Property, the Plaintiff removed it. Shortly thereafter, in February 1998, she commenced the present action. All these are consistent with her having the intention to possess the Property. Although there is no evidence on what happened after the fence had been removed, there is no allegation that the Plaintiff has not been in continuous possession of the Property since that time.

Other issue

28. Mr Siu, Counsel for the Plaintiff, referred to the question of implied licence discussed in the case of Buckinghamshire County Council v. Moran [1990] 1 Ch 623 and Man Kam Tong v. Man Lin Tai [1984] HKLR 181. The issue of implied licence had not been relied upon by the Defendants and it is not necessary to discuss these cases.

Conclusion

29. In my view, the Plaintiff has proved her case and is entitled to the declarations she asks. I will further order that the Plaintiff be substituted as the owner of the Property in the record of the Land Registry. There shall be judgment to her accordingly.

Costs

30. The costs order nisi is that the parties will bear their own costs. The Plaintiff has to establish, by way of evidence, her claim to adverse possession. In my view, the Defendants are justified in defending this claim. Obviously, they do not wish to be deprived of a piece of property which their father had given them before his death.