LAU WING HONG AND OTHERS v. WONG WOR HUNG AND ANOTHER

HCA1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

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J U D G M E N T

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1. This proceeding was to be the sequel to the judgment reported at [2006] 4 HKLRD 671, in which the plaintiffs’ counterclaim to the defendants’ counterclaim would fall to be determined : see at page 681C–H.  The constitutionality of sections 7 and 17(2) Limitation Ordinance, measured against Articles 6 and 105 of the Basic Law, was to be the central issue.  To this end, now the Secretary for Justice represented by Mr Benjamin Yu SC appeared as an Intervener and Mr Godfrey Lam appeared as amicus curiae on the instructions of the Registrar of the High Court.  The fixture was listed for 4–6 July 2007.

2. Because of the intrinsic importance of the issue all counsel had surpassed themselves in terms of evidence of preparation, with no less than eleven box files of authorities and some 250 pages of detailed submissions having been placed before the court.  This was itself a proportionate response to the significance and complexity of the underlying issues.  However, on Friday 29 June the plaintiffs’ solicitors wrote an open letter to the other parties giving notice of their abandonment of the Basic Law point — the sole reason for the counterclaim to the counterclaim — a classic case of cold feet at the altar.  1 and 2 July were of course public holidays.

3. In open court on 4 July the plaintiffs’ application for leave to discontinue their counterclaim to the counterclaim was not opposed by the Intervener or the defendants : Order 21 rule 3 RHC.  Leave to discontinue was accordingly given.  The plaintiffs accepted that they had to pay the costs of the defendants and were ordered to do so.  The Intervener had in March 2007 upon becoming a party to the action, agreed with those parties that no costs would be sought from or awarded to any other party in relation to the Intervener throughout.  This left the issue of whether in all the circumstances, the plaintiffs should pay the costs of the amicus.  That raises issues of jurisdiction and of discretion which are dealt with later in this judgment.

4. However, prior to leave to discontinue being granted, at the instigation of Mr Yu SC all counsel discussed during a short adjournment whether the case could proceed on a formula that protected all parties’ interests as to costs.  This proposal foundered when the plaintiffs’ position was that their counsel would not make any oral submissions (although having filed written submissions) or participate further in any Basic Law argument.  The defendants equally instructed their counsel not to make oral submissions (although having filed written submissions) because the plaintiffs no longer intended to rely upon the Basic Law points.  No counsel for the original parties is to be in any way criticized, finding themselves in the awkward postures imposed upon them by pragmatic clients.

5. This fixture had been identified as an important test case.  A good number of other cases raising the identical constitutional law issue were flying in a holding pattern, pending the intended adjudication.  Because of the apparent state of uncertainty as to the constitutionality of the sections of the Limitation Ordinance, counsel and solicitors in the profession were for some years now routinely advising that a counterclaim on behalf of a paper title owner should be filed to any squatter counterclaim for adverse possession.  Some in the profession even took the view that it was negligent not to so act.

6. With the two sets of parties to the original private action having declined to participate any further, it would have been unreal in the extreme and violative of the classic conception of judicial power as being the determination of a controversy between parties according to existing law, to have proceeded with the Intervener and the amicus alone crossing swords (even more so when there was significant commonality in their respective submissions), for the sake of some formalistic forensic fulfillment.  The court must respect and protect the primacy of the parties.  However, a submission by Mr Mak that the court should indulge in gratuitously obiter views on the merits of the constitutional position was quickly dispatched.  In short, despite valliant efforts by the Intervener and amicus nothing could resuscitate the fixture : unlike the promise of the idiom this salted fish was not coming back to life : 咸魚翻生.

Necessary presence of Secretary for Justice as Intervener

7. In private law cases, such as this, where an issue arises as to the constitutionality of provisions in an Ordinance (or even where it is argued that a regulation, statutory notice, bylaw etc. is invalid) it is imperative that the proceedings and the issue be formally brought to the attention of the Secretary  for Justice, so that the Secretary can seek to apply to become an Intervener, if so desired.  In the present case this was overlooked by the parties, but was ordered to be done on the motion of the Court itself : Order 15 rule 6(2) RHC; [2006] 4 HKLRD 671, 682C.  Any decision in private law, that a statutory provision or other statutory instrument is unconstitutional or otherwise unlawful, without a formal opportunity provided to the Secretary for Justice to intervene or otherwise assist as to the considered position in law, would amount to a fundamental breach of natural justice.

Jurisdiction under section 52A (1) High Court Ordinance to award costs of amicus against a party?

8. Upon receipt of the letter of 29 June, the court directed that submissions should be made as to whether any party should be liable to pay the costs of the amicus.  The amicus was formally appointed in late March 2007.  It had been agreed by the plaintiffs and the defendants during the trial in August 2006 that an amicus should be appointed : [2006] 4 HKLRD 671, 681I–J if the court concluded, as it did, that the defendants had established adverse possession.

9. Mr Godfrey Lam, the amicus, submitted that section 52A(1) High Court Ordinance was easily able to accommodate jurisdiction for a court to direct that the costs of an amicus be paid by “a party” : see section 52A(2) for a restriction as to against whom an order may be made.

10. Section 52A(1) provides :

“Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid.”

11. In Re South China Strategic Ltd [1997] 1 HKLRD 131 Rogers J (now Rogers VP), made an order against a party in relation to the costs of an amicus in a company law case.  The judge was initially faced with an unopposed application for directions in a petition seeking the court’s sanction of a scheme under the Companies Ordinance.  At page 132J Rogers J indicated that because of grave concerns about the petition the court would need the services of an amicus if the petition was to be maintained.  In due course after the appointment of an amicus the court concluded that the application was “in many respects an affront to the court” (page 133A) and lacking in “candour” (page 136H–J).  However the report, only states in relation to the costs of the amicus at 137 :

“[After a discussion as to costs, the costs of the amicus curiae were ordered to be paid by the petitioner.]”

I am sure that section 52A(1) was in the forefront of that discussion and was the basis for that order; no other source of jurisdiction appears to be available to support it.  Academic commentary in Hong Kong also accepts the existence of the disputed jurisdiction : Prof. Johannes Chan Amicus Curiae and Non-Party Intervention (1997) 27 HKLJ 391, 397; Halsbury’s Laws of Hong Kong Vol. 8 “Courts and Judicial System” paragraph [125.014].

12. In HKSAR v. Hung Chan Wa unreported, CACC411/2003, 28 April 2006, (CA) Ma CJHC delivering the judgment of the Court of Appeal in a criminal case in relation to costs, (section 52A(1) High Court Ordinance does not apply to criminal cases) left open whether jurisdiction existed in the Costs in Criminal Cases Ordinance, Cap. 492 to order a party to a criminal proceeding to pay the costs of an amicus.  The principles for the award of costs in civil law are, however, a set of rules which cannot be directly transposed from the singularly different criminal law context, which is based on other imperatives and discretionary considerations. 

13. In England, Bracewell J in Re AW (Adoption Application)[1993] 1 FLR 62 had to decide a case where persons desperately seeking to adopt, but recognizing their own ineligibility to adopt, deliberately circumvented the statutory law by a sophisticated international strategm.  The judge had to decide the very difficult question of whether the prospective adopters, who had properly cared for the child in the meantime, should be permitted to formally adopt the child, by granting them statutory dispensations, despite their calculated behaviour.  After deciding to grant the dispensations Bracewell J then referred to the fact that the Official Solicitor, having acted as amicus curiae before the court, applied that all or some proportion of the costs of the amicus be paid by the adopters.  The judge described it as “a most unusual application” although noting that a previous such order against a party had been made in another case.  Upon a consideration of Rule 51 of the Adoption Rules 1984 [UK] which read :

“On the determination of proceedings to which these rules apply or on the making of an interim order the judge may make such order as to the costs as he thinks just.”

Bracewell J concluded that the necessary jurisdiction existed.  Section 52A(1) High Court Ordinance is certainly not narrower in its operative width and intendment, speaking as it does of the “full power” reposed in the court.  The judge ruled that an order in favour of an amicus would be appropriate in “very rare circumstances” where there were “very compelling reasons”.  She ordered half of the taxed costs of the amicus to be paid.

14. A similar conclusion as to jurisdiction was reached in Chapman-Smith v. Chapman-Smith [1997] NZFLR 968, a decision in the Family Court, a court of subordinate jurisdiction.  Judge Robinson noted that superior courts by section 99A Judicature Act 1908 [NZ] had power to require any party to contribute towards the costs and expenses of an amicus or of an Intervener.  It was argued that as that section did not extend to the Family Court, there was a deliberate absence of necessary jurisdiction.  The relevant proceedings were in relation to matrimonial property and costs were governed by s40 Matrimonial Property Act 1976 [NZ] :

“Subject to any rules of procedure made for the purpose of this Act, in any proceedings under this Act the Court may make such order as to costs as it thinks fit.”

It was held that under that section a party could be ordered to pay the costs of the amicus and on the particular facts the judge ordered one former spouse to pay a quarter and the other three quarters of the costs of the amicus.

15. In Seale v. National Coal Board (1948) 41 BWCC 111 (CA), which was decided well before the crucial decision of Aiden Shipping Co. Ltd v. Interbulk Ltd [1986] AC 965 (HL) emphasizing the plenitude in the modern general formula for costs in civil proceedings, Somervell LJ remarked in the context of a Workmen’s Compensation Act 1925 [UK] case that :

“Obviously, an amicus curiae, in the first place, is not defending any interests of his own.  In the second place, I think it clear that he does not either get, or give, costs”

In my judgment the first part of the second sentence of the dictum is, unlike the remainder, not of authority in Hong Kong — here the amicus may get costs, in an appropriate case.  The jurisdiction exists.

16. I reach this conclusion despite the fact that Bray CJ in the Full Court of South Australia in Blackwood Foodland Pty Ltd v. Milne and the Superintendent of Licensed Premises [1971] SASR 403, 411 stated :

“But the opposing party, as I see it, can in no circumstances be ordered to pay the costs of counsel acting in the capacity of an amicus curiae.”

However, that remark must be understood in the special context under consideration there, namely it was made in relation to the situation where “counsel, appearing in the normal way for a party entitled to be heard on one topic as of right, can also, if the court thinks fit, be heard as amicus curiae on another topic on which his client is not entitled to be heard as of right”.  The remarks of Bray CJ were therefore in reference to a peculiar hybrid role by counsel for a party and not a general statement of principle.  In the Federal Court of Australia, Lander J in Wilson v. Manna Hill Mining Co Pty Ltd (2004) 51 ACSR 404, 415 stated by reference only to Blackwood that : “An amicus curiae is not entitled to an order for costs”.

17. Whatever is the position in other jurisdictions, in my judgment the term “costs” in section 52A(1) High Court Ordinance should not be construed so narrowly as to exclude the cost or expense incurred in the remuneration of an amicus.  An amicus instructed by the Registrar of the High Court as is the case here, will be paid from the Judiciary exchequeur, out of the annual financial vote from the HKSAR Government i.e. ultimately by taxpayers.  While the amicus as a non-party has no entitlement to costs or to an order for costs vis-à-vis other parties in the lis, the court is empowered to determine that the “costs” of the amicus are to be paid by one or more of the parties.  The intention of s52A(1) is that any transactional costs of the litigation can be ordered to fall on any party in the litigation.

Discretion to award costs of amicus against a party

18. I accept that any discretion in favour of an amicus should be exercised sparingly as the amicus is generally an appointment made on the court’s own motion — albeit here with the express concurrence of the plaintiffs and defendants; further, costs are compensatory not punitive.

19. The position of amicus is an important role in the justice system.  In Secretary for Justice v. Chan Wah (2000) 3 HKCFAR 293 Bokhary PJ clearly differentiated between the role of an amicus and that of an intervener, while noting that while a court may itself seek the assistance of an amicus, an organization may also take the initiative of offering the court the services of counsel who would expound the law impartially.  In similar fashion Sir Anthony Mason in Interveners and Amici Curiae in the High Court : A Comment (1998) 20 Adelaide Law Review 173, 174 in one of 4 back-to-back articles by judges and practitioners alike on the same subject said :

“Interveners become parties who are liable to an order for costs being made against them; they have the rights of parties.  If we want to retain the existing classification of interveners with their existing rights and liabilities, we would be well-advised to structure participation by others around the grant of amicus status.  But there is perhaps a case for modestly widening the cope of intervention to include those who have a substantial interest in the case, leaving others to the status of amici.”

The future appointment of any amicus should not be inhibited by an argument from parties that such an appointment potentially widens their costs liability.  The answer to that contention is that a proper exercise of discretion will ensure that it is only in a compelling case (which will be therefore plainly an unusual one) that an order would be made against a party to pay the costs of an amicus.

20. In HKSAR v. Hung Chan Wa Ma CJHC appropriately noted that as an amicus is very usually appointed at the request of the court.  That is a salutary reminder of the fact that an amicus in civil and criminal law (see s81D(2)(c) Criminal Procedure Ordinance, Cap. 221, for an example) is almost invariably imposed upon the litigants, so that fact should from a material backdrop in any discretionary calculus although it is not in itself a determinative feature.

21. In exercising the relevant discretion here the court should focus on the reasons for the plaintiffs’ counterclaim to counterclaim to have been initiated and actively pursued (and materially amended and enhanced as recently as 21 March 2007) until its abandonment on the cusp of the fixture.  Mr Mak stated that the decision to abandon was “for commercial reasons” adding for good measure that the plaintiffs were “not conceding” that the counterclaim to counterclaim would not have succeeded.

22. The only reason advanced by counsel for the last minute for the abandonment by the plaintiffs was that they were concerned they may become embroiled in litigation culminating even in the Court of Final Appeal.  This must have been glaringly obvious when the counterclaim to counterclaim was initiated.  It was an innovative claim that if successful would have had far-reaching consequences within the HKSAR for real property law and constitutional law alike.  Such a pleading should not therefore be a step to be taken lightly and then to be resiled from with the same jaunty spring.  A party unless permitted to discontinue is locked-in to the litigation and to any appeals.

23. In my judgment the proffered reasons were not at all convincing.  It is much more likely that having found that the submissions of the defendants and both those of the Intervener and of the amicus dated 21 June 2007 were cogently reasoned against the plaintiffs, that the plaintiffs decided to rapidly cut their losses.  The sudden change of mind is not otherwise satisfactorily explicable.  Mr Godfrey Lam submitted, and I agree, that the court should conclude that the other Counsel and their clients had been “given the run around” by the plaintiffs.

24. However, in accord with Mr Mak’s submission, I do not find that what had happened was an affront to the Court — it was the right of the plaintiffs to disengage with leave.  But the need to demonstrate that there has been an affront to the court is in my judgment neither a precondition to or a factor in the exercise of the discretion.  The relevant discretionary features are more textured and nuanced and do not depend on the impact of the blunt instrument of effrontery.

25. Mr Mak’s submission was that conduct by a party akin to that required for a wasted costs order was necessary to enliven this particular discretion.  I  reject that submission.  No misconduct is required to activate s52A(1) High Court Ordinance.  But where the explanation for the discontinuance advanced on instructions is simply disingenuous and where the timing of the application to discontinue is relatively proximate to the timing of the decision to revitalize the counterclaim to counterclaim, those are significant factors to be assayed with the other circumstances.  In the exercise of my discretion these are sufficiently compelling circumstances in the context of the case as a whole, to require that the plaintiffs should pay a portion of the costs of the amicus, who was only present to deal with the points to be raised by the pleading claiming far-reaching unconstitutionality.

26. The appointment of the amicus has become a wasteful cost only because the plaintiffs exercised their right to terminate their claim a few days after considering the submissions from the Intervener and amicus.  That special (apparently unique) scenario is quite distinguishable from that where a claim by plaintiffs proceeds but eventually fails on the merits, after the amicus has been heard — although even in that situation there may be still compelling reasons justifying a costs order against a party to pay the costs of the amicus, just as in Re South China Strategic Ltd [1997] 1 HKLRD 131.

27. It is possible that the submission of the amicus could be utilized in whole or in part in some other case.  But if an amicus was to be appointed there, that would involve a new set of costs.  In the exercise of my discretion, I order that the plaintiffs pay two thirds of the costs of the amicus to be taxed unless agreed.

Mr Andrew Y.S. Mak, instructed by Messrs Chan &Associates,for the Plaintiffs

Mr Simon H.W. Lam and Mr Lawrence L.K. Ngai, instructed by Messrs Chiu, Szeto & Cheng, for the Defendants

Mr. Benjamin Yu SC, instructed by Law Officer (Civil) for the Secretary for Justice, Intervener

Mr Godfrey Lam, Amicus Curiae

HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

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Before: Mr Recorder McCoy, SC in Court

Dates of Hearing: 22, 23, 24, 25, 28 & 29 August 2006

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J U D G M E N T

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1.  About 800 metres east of the venerated Ten Thousand Buddhas Monastery ( 萬 佛 寺 ), as the crow flies, lies what used to be the rustic village of Sheung Wo Che ( 上 和 輋 ).  It is now separated from Shatin by Tai Po Road ( 大 埔 道 ) and lies just immediately west of the KCRC East Rail line.  A footbridge from Lek Yuen Estate ( 瀝 源 邨 ), just north-east of Shatin New Town Plaza ( 沙 田 新 城 市 廣 場 ), spans Tai Po Road and connects the village, allowing easy access to it and to the famous Lung Wah ( 龍 華 ) pigeon restaurant located a few hundred metres nearby.

2.  For many generations the village was unaffected by modernity.  Now all that has changed.  What used to be a picturesque, arboreal setting for a few village-style houses has now become a patchwork of scorched earth, thrusting modern villas and one little crooked tin hut fully enclosed by a vegetation-laden fence.  In that hut still lives Mr. Li Wai Kin (“Mr. Li”) and his wife.  In an even smaller similar structure within the fence lives Madam Wong Wor Hung (“Madam Wong”).  Madam Wong aged almost 80 is the 1^st Defendant in this proceeding and her son Mr. Li is the 2^nd Defendant.

3.  On the other side of this case are the 5 plaintiffs, who are indigenous New Territories villagers.  The family of the 4^th plaintiff Mr. Nam Chi Cheung, Raymond (“Mr. Nam”), have lived in the village for at least 10 generations.  The plaintiffs are the various registered owners of 5 small Lots of land and claim that the Defendants have, by remaining in possession behind the fence, erecting the 2 structures and growing a few fruit trees, have trespassed and continue to trespass over their respective Lots. 

4.  The entire area of land within that fence and in the current possession of the Defendants is about 160m² in size and is irregularly rectangular in shape.  The land within the fence straddles: Lot 137 SA ss3, Lot 137 SA ss 4, Lot 137 SA ss 5, and Lot 137 SA RP. (“the disputed land”).  Each piece of land has a different owner.  Government land is also within the fence.

5.  The Defendants have, however, also been, in general terms, on the other material piece of land in this case within the fence, Lot 136 SB ss1, since 10 February 1974, when the first of 3 successive 10-year agreements to lease it was made.  That Lot is a small and very narrow, triangular sliver of land about 22m² (“the rented property”).

6.   

The area A-B-C-Q-M-J-Z-I-A is 138.3m².

The area A-B-C-Q-D-E-F-G-H-I-A is 91.7m².

Lot 137 SA RP being D-E-F-G-H-I-Z-Q-D is about 25m².

Lot 136 SB ss1 (the rented land) being Q-M-J-Z-Q is only about 22m².

The area of the disputed land is A-B-C-Q-Z-I-A.  The Defendants claim all of it and, alternatively, several lesser versions of it.  The larger temporary structure is the 2^nd Defendant's hut and the smaller one is occupied by the 1^st Defendant.

Lot 137

7.  The 1^st Plaintiff is the registered owner of Section A sub-section 3 of Lot 137 (“Lot 137 SA ss3”).  The 2^nd Plaintiff and 3^rd Plaintiffs respectively own Lot 137 SA ss4 and Lot 137 SA ss5.  Since 5 June 1998 the 4^th and 5^th Plaintiffs have been the registered owners of the Remaining Portion of Section A in Lot 137 (“Lot 137 ssA RP”), having purchased it from the Church Body of the Chinese Anglican Church in Hong Kong (“the Church”): see s4 Chinese Anglican Church Body Incorporation Ord. Cap 1012 (repealed), now s4 Church Body of the Hong Kong Sheng Kung Hui Ord Cap 1158.  On the same day, 5 June 1998, the Church had also sold Lot 137 SA ss3, 4 and 5 to the 4^th and 5^th Plaintiffs; they had in turn respectively on-sold on 22 September 1998, ss3, 4 and 5 to the 1^st, 2^nd and 3^rd Plaintiffs.  The Church had been the registered owner of: ss3, 4, 5 and RP for years, well before 10 February 1974, the day when Madam Wong entered the tenancy agreement with Mr. Lam Cheung Sing in relation to Lot 136 SB ss1.

Lot 136

8.  Mr. Lam Cheung Sing on 10 February 1974 rented a part of this Lot (“the rented property”) to Madam Wong for 10 years at $300 a year.  It is common ground that the leased land did not include 136 SB RP.  In 1983 Mr. Lam Ping Hing inherited this land from Mr. Lam Cheung Sing.  On 10 February 1984 (“the second tenancy agreement”) Mr. Lam Ping Hing (the uncle of the 4^th and 5^th Plaintiffs) rented the land to Mr. Li, the 2^nd Defendant.  All terms, descriptions and conditions were otherwise identical to the first tenancy agreement, save that the annual rental was now $500.

9.  The third tenancy agreement was identical to the second, except that the period commenced on 10 February 1994 and the annual rental was now $1,175 and the tenancy would expire on 9 February 2004.  The Defendants, however, still remain in occupation, despite the determination of that tenancy.  The 4^th and 5^th Plaintiffs became the registered owners of the land under the third tenancy agreement on 10 June 2002. 

10.  The Plaintiffs' solicitors first sent a letter addressed to the Defendants, demanding redress for trespass, on 17 January 2002.  That letter was itself a response to a letter 5 days earlier from the Defendants' solicitors, claiming the land by adverse possession.  The Plaintiffs issued the writ in this action on 25 April 2003. 

11.  The Defendants deny they are trespassing and by defence and counterclaim seek a Declaration that by adverse possession they are now the rightful owners of the disputed land.  The original pleaded counterclaim even sought title to Lot 136 SB ss1 (the rented land) as well as to the Government land.  Both these scenarios were absurd – the former, because by actually paying rent the Defendants necessarily negatived any intention to themselves possess it adverse to the landlord; the second because it specially requires 60 years of adverse possession against Government land and the Defendants had only entered upon the land in 1974.  By successive amendments during the trial, the Defendants have eventually reduced their claim to the area A-B-C-Q-Z-I-A, as well as lesser included alternatives to that area. 

12.  The Plaintiffs' case accepts that the Defendants did build in 1974 the tin hut in which Mr Li and his wife still live, just after the first agreement to lease had been entered.  Mr Li said in evidence it took him about 2 months to build the hut.  The case for the Plaintiffs is that the hut is presently larger than it was after it was initially constructed.  Mr. Li accepted that he had over the last 30 years modified and extended it from its original specifications.

13.  The case for the Plaintiffs continues that the tin hut was not just built on the rented portion in Lot 136 sB ss1 but right from 1974 it had extended into the land then owned by the Church; that the erection of the structure on the Church land was without any consent or approval from the Church; that the Defendants had therefore trespassed into that land; and that as Mr. Lam Cheung Sing was the landlord of the Defendants in relation to the contiguous rented land (from which the Defendants had trespassed forth), by 1995 the Defendants' 20 years of encroachment into the Church land amounted to adverse possession of it, not for them – the Defendants – but by them, for and on behalf of the then owners of the rented land, and now for the benefit of the present successors-in-title, the 4^th and 5^th Plaintiffs.  For the Plaintiffs' reliance was particularly placed on the doctrine of encroachment and its presumption that any encroachment (even over the land of a third party) which occurs during the term of a lease is presumptively held for the landlord and not the tenant.  This doctrine was articulated in Kingsmill vMillard (1855) 11 Exch 313, 318-9 per Parke B and Whitmore v Humphries (1871) LR 7 CP 1, 4 per Willes J.  The Defendants submit that this doctrine does not represent Hong Kong law and that in any event the conduct and communications between landlord and tenant successfully rebutted the presumption so that the encroached lands were held for the tenants and not the landlord.

14.  The Plaintiffs' case is that it was not until about 1990 that the Defendants first enclosed the lands with a fence currently occupied by them and planted trees and plants within it.  That case, at first blush appears internally inconsistent with the Plaintiffs' claim to adverse possession via the encroachment presumption, which is explicitly based on adverse possession by the tenants having occurred by 1995.

The Plaintiffs' Counterclaim to the Defendants' Counterclaim

15.  The Plaintiffs have also pleaded a counterclaim to the Defendants' counterclaim, stating that if, which is denied, that the Defendants are found to be in adverse possession of the Plaintiffs' registered land, then basing themselves on the jurisprudence of the recent majority judgment of the European Court of Human Rights in J A Pye(Oxford) Ltd. v United Kingdom application 44302/02, 15 November 2005, they claim compensation from the Defendants for the value of the land.  In JA Pye (Oxford) Ltd. v United Kingdom by a majority of 4:3 the Court concluded that where the registered owner of freehold land was successfully dispossessed by a trespasser's adverse possession then compensation was payable to the dispossessed former registered owner. 

16.  In J A Pye (Oxford) Ltd. v Graham [2003] 1 AC 419 (HL), the precursor to the decision of the European Court of Human Rights, Lord Bingham of Cornhill at 426G querried whether it was intrinsically fair and just for the registered owner of land, to lose title to his land without the party gaining title being “required to pay some compensation at least to the party losing it”.  By comparison, in the case of unregistered land, Lord Bingham accepted that the windfall to the squatter “could no doubt be justified as avoiding protracted uncertainty where the title to land lay”.  But Lord Hope at 447A thought the unfairness did not lie in the lack of compensation, “but in the lack of safeguards against oversight or inadvertence on the part of the registered owner”. 

17.  The need to adjudicate upon the counterclaim to the counterclaim only arises upon a finding of adverse possession.  By consent that counterclaim has been contingently split from the trial pending this judgment.

18.  As that counterclaim would involve close consideration of Articles 6 and 105 Basic Law (does A 105 apply at all between private persons?), the constitutionality of sections 7(2) and 17 Limitation Ord Cap 347 (expressly challenged by the Plaintiffs) and the correctness for Hong Kong of the decision in J A Pye (Oxford) Ltd. v United Kingdom, it was sensibly agreed by counsel that an amicus curiae should be appointed, if the issues become live.  In Beaulane Properties Ltd. v Palmer [2006] Ch 79, 136 it was held that as proved adverse possession had the result of a deprivation of registered property, limitation provisions provided by statute should be interpreted in the light of human rights legislation.  In Hong Kong, there is no Torrens system; there is a system of the priority of registration of land documents, but no system of indefeasible registration of land title: Kwok Siu Lau v Kan Yang Che (1913) 8 HKLR 52 (FC), Keep Point Development Ltd v Chan Chi Yim [2000] 2 HKLRD 145, 150G-151H and s3 Land Registration Ord Cap 128.

19.  Further because Article 7 Basic Law expressly provides that all land in Hong Kong is owned by the State, there being no freehold land in this jurisdiction at all (except the anomalous single Lot 1 occupied by the Anglican Cathedral in Central: see s6(1) proviso (a) Church of England Trust Ord Cap 1014), the Secretary for Justice would be invited to consider to appear in the counterclaim to counterclaim as an Intervener.  The potential implications of JA Pye (Oxford) Ltd. v United Kingdom for Hong Kong are far-reaching.  Government land too may be adversely possessed although the necessary period is 60 years of possession: s7(1) Limitation Ord Cap 347.  The limitation period between private parties was 20 years at the material time, but is for cases arising since 1 July 1991 now 12 years: s38A Limitation Ord.

First Tenancy Agreement

20.  Mr. Li and his mother have occupied the rented land and some of the disputed land since 10 February 1974, when Madam Wong leased the rented land from the then owner, Mr Lam Cheung Sing.  The terms of that agreement to lease are handwritten in Chinese characters, witnessed and signed by the parties.  It is a very simple, homely document, reflecting the uncomplicated nature of landlord and tenant relations in the village at the time.

Tenancy Agreement

(Translation)

The Lessor, Lam Cheung Sing, hereby agrees to lease to Wong Wor Hung a self-owned bare land at Lot No. 136B in D.D. 185, Sheung Wo Che Village, Shatin located near the railway and ‘beside' the footbridge leading to Lung Wah.  The Lot leased consists of 2 portions.  One portion is located in front of the entrance of the golden house.  The other portion is situated in the vicinity of the lamp pole but excluding the refuse station.

The term is 10 years commencing from 10^th February 1974 to 9^th February 1984 at a yearly rent of HK$300.00 payable in advance without delay.  The landlord is entitled to increase the rent within the 5 years period commencing from 10^th February 1974 to 1979 with amount of increase to be determined but not exceeding 20% (addition).

At the expiry of the 10 years' term, the lease can be renewed upon mutual consent of the parties at the rent to be determined.  If the landlord disagrees to the renewal, the tenant shall unconditionally surrender the land to the landlord for his disposal.

Upon mutual consent of the parties, the lease shall not be revoked.  For the avoidance of doubt, each party shall keep this as evidence.

Lessee: Wong Wor Hung
Lessor: Lam Cheung Sing
Witness: Yeung Sang
(in duplicate)”

21.  No issue exists on the pleadings that the agreement to lease was void for uncertainty.  But an issue arises as to whether the area actually intended by the parties to be let was that delineated by the reference to Lot 136B in DD185 as the Defendants submit, or the much looser area partially described by local features, as the Plaintiffs submit.  The precise area of that Lot legally defined, had at the material times never been pegged or marked out on the ground.  Do the descriptors such as “near the door of the golden house”, “in the vicinity of the lamp pole” but “excluding the refuse station” show that the original landlord erroneously let to Madam Wong, as the Plaintiffs submit, more land than he owned?

22.  On all the evidence I find that the original landlord was clearly aware that what he owned  was Lot 136 SB ss1 in DD185.  That was all he let.  He did not intend to let what he did not own.  But he did not know, by examining the “bare land” the physical boundaries of what he owned.  He knew it ran from about the door of the golden house (which still exists) to the vicinity of the lamp post (one still exists, but may not be in the same place as in 1974), but did not go so far as to include the refuse station (which no longer exists).  The inadequacy of these references to 3 local features is obvious as they do not demonstrate the complete shape or size of the area.  They formed a casual, yet practical, geographical guide to the general location and were not intended to be definitive in any way.  They are themselves expressly conditioned by non-empirical words, like “near” and “in the vicinity”.  Even if there had been an initial common mistake as to the real size of the rented land, a few months later in August 1974 any such issue was resolved after a discussion between the parties.  This resolution is noted later in this judgment at paras [66], [79], [80], [83] and [84]. 

23.  The literacy standard of Madam Wong (who did not give evidence) was probably akin to that of the 2 other elderly witnesses from the village who did give oral evidence.  (Mr Yeung Sui Sang, who signed the 1974 agreement as a witness, could not read what the agreement said, and Madam Yau who signed her witness statement with a cross, could neither read nor write.)  All in all, I find that Mr Lam Cheung Sing only intended to let to Madam Wong what he owned, but that he was understandably unsure by mere visual reference to the bare land exactly the boundaries of that land.  The annual rent of only $300 only underlines the intended informal nature of the contested descriptors in the agreement to lease.

Essential Factual Issues

24.  It is agreed that the essential factual issues at trial are whether, when and where the Defendants erected the fence that currently encircles the property.  The erection of a fence “is strong evidence of discontinuance of possession by the true owner”: The Mayor and Burgesses of the LondonBorough of Hounslow v Minchinton (1997) 74 P&CR 221, 230 per MillettLJ.  In Seddon v Smith (1877) 36 LT 168, 169 (applied in Sinton DamerellProperties Ltd v King Trounson Trustees Ltd [2004] 2 NZLR 66, 77), Cockburn CJ said “Enclosure is the strongest possible evidence of adverse possession.”

Adverse Possession

25.  The burden of proof is on the party claiming a possessory title against the registered owner: Marshall v Robertson (1905) 50 SJ 75, 76, Pflug and Pflug v Collins [1952] 3 DLR 681, 688, Cotton v Keogh [1996] 3 NZLR 1, 7 (CA), Wong Tak Tue v Kung Kwok Wai (No 2) (1997-8) 1 HKCFAR 55, at 70E per Litton PJ (Lord Cooke of Thorndon NPJ concurring).

26.  In Cheung Yat Fuk v Tang Tat Hong  (2004) 7 HKCFAR 70, 74B Bokhary PJ delivering the judgment of the Court of Final Appeal said

“So adverse possession of land consists in the exercise of the ordinary rights of ownership over it by a person who is not the true owner and is in possession of the land in the assumed character of the owner.”

27.  See too: Wilson v Martin's Exors [1993] 1 EGLR 178, 181 C (CA) where Ralph Gibson LJ emphasised that

“The concept of adverse possession is that of a landowner who fails to take legal action to enforce a cause of action to recover possession of land wrongly taken by a trespasser.”

Analysis of Adverse Possession Requirements

28.  Slade J in Powell v McFarlane (1977) 38 P & CR 452, 472, which was approved in Buckinghamshire County Council v Moran [1990] Ch 623, 240 (CA) and in turn endorsed by the House of Lords in JA Pye(Oxford) Ltd. v Graham [2003] 1 AC 419 (HL) said

“…where the question is whether a trespasser has acquired possession.  In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world.  If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.”

29.  Lord Browne-Wilkinson at 434G remarked that continued reference to “adverse possession” may obscure focus on the real issue which he restated as:

“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.”

30.  There are now 2 elements for the legal possession of land: (1) a sufficient degree of physical custody and control (“factual possession”) and (2) an intention to exercise such custody and control on one's own behalf and for one's own benefit (“intention to possess”).  Without the requisite intention, which is usually a matter of inference, in law there can be no possession.  That intention will be usually deduced from the physical acts themselves, although there must be the 2 separate but conjunctive elements to constitute legal possession.

31.  The House of Lords held that the necessary intention is only an intention to possess the land; an intention to own the land is not required:  Ocean Estates Ltd v Pinder [1969] 2 AC 19, 24 (PC); J A Pye (Oxford) Ltd vGraham [2003] 1 AC 419, 438 per Lord Browne-Wilkinson, 446 per Lord Hope of Craighead, 448 per Lord Hutton.

32.  Lord Hope emphasised at 446C

“But it is reasonably clear that the animus which is required is the intent to exercise exclusive control…  The important point for present purposes is that it is not necessary to show that there was a deliberate intention to exclude the paper owner or the registered proprietor.”

Divergence Between Hong Kong and English Law

33.  In para [46] of J A Pye (Oxford) Ltd v Graham, the House of Lords expressly overruled the decision in R v Secretary of State for theEnvironment ex p Davies (1990) 61 P&CR 487, whereas the Court of Final Appeal (Li CJ, Litton and Ching PJJ, Mortimer and Lord Cooke of Thorndon NPJJ) in Wong Tak Yue v Kung Kwok Wai (No 2) (1997-98) 1 HKCFAR 55, 69F had expressly approved of that decision.  The separation point in the jurisprudence is structurally important in this area of the law, as the law in Hong Kong now is, that if a squatter in possession of land had the “intention to pay rent if the owners had requested payment” (at 69E), that demonstrates that the squatter “was not intending to exclude the owner with the paper title, but showed that he was treating himself as enjoying possession under a lawful title from the owners”.  See also the short concurring judgments of Litton and Ching PJJ who each also held that the intention of the occupier to pay rent, if asked, was an express declaration against the claimant's interest and fatal to his case.  This reasoning is now fundamentally irreconcilable with the position of the House of Lords, which adopted the decision of the Privy Council in Ocean Estates Ltd vPinder [1969] 2 AC 19, which held that as a matter of principle, the willingness of a squatter to pay for occupation of the disputed land, if asked, did not in law indicate an absence of an intention to possess the land by the squatter.  In J A Pye (Oxford) Ltd v Graham Lord Browne-Wilkinson at para [46], Lord Hope of Craighead at para [71] and Lord Hutton at para [78] all explicitly held that a willingness to pay rent, if asked, was completely compatible with a subsisting intention to possess the land to oust the owner. 

34.  The concentration on conduct not excluding the owner of the land (at 60F per Li CJ, 70F per Litton PJ, 71E per Ching PJ), rather than a concentration on possession to exercise exclusive control, now clearly differentiates Hong Kong law from the more recent English position.

Aggregating Adverse Possession

35.  In Cheung Yat Fuk v Tang Tat Hong (2004) 7 HKCFAR 70, 73G the Court of Final Appeal, approved the approach of Brooking J in Shelmerdine v Ringen Pty Ltd [1993] 1 VR 315, 341 that

“…where the adverse possession has been continuous, it is possible to tack the possession of one intruder on to that of another although there has been no assignment of possessory rights.”

Here it has been by a mother and son.

Adverse Possession: Fact and Degree

36.  Therefore, the aggregated possession of the squatter-landlord, both personally and through his own tenant or licencee, counts towards the necessary time requirement under the Limitation Ord to trump the registered title owner.  See to the same effect:  Smith v Stocks (1869) 17 WR 1135, 1137 per Mellor and Hannen JJ and Des Barres v Shey (1874) 29 LT 592, 593-595 (PC) per Sir Montague Smith - in the latter case the unsuccessful appellant, was himself a Judge of the Nova Scotia Supreme Court.

37.  The late Sir Robin Cooke, delivering the judgment of the Privy Council, reversing a decision of the Court of Appeal of Brunei, in Hajjah Tampoi bte Haji Mutusin v Haji Matussin bin Pengarah Rahman (1984) 4 PCC 345, 355; Privy Council Appeal 51/1983, 31 July 1984, emphasised that the issue in adverse possession cases “…was essentially one of fact and degree” which involved “clear evidence of denial of the plaintiffs' title and some positive action by the defendant” to manifest the intention to possess the land.

38.  Lord Robertson for the Privy Council had earlier on appeal from the High Court of Bengal, emphasised that the possession required “must be adequate in continuity, in publicity, and in extent to shew that it is possession adverse to the competitor”: Radhamoni Debi v Collector of Khulna (1900) 27 LR IA 136, 140 (PC).

39.  In every case, the evidence required to establish the necessary intention to possess will depend on the nature and size of the land.  Occupation of land is not synonymous with its possession: that is too neutral.  An intention to possess, which is not put into effect by action, is equally insufficient: J A Pye (Oxford) Ltd. v Graham [2003] 1 AC 419, 446 A per Lord Hope of Craighead.

Witnesses for the Plaintiffs

40.  Madam Yau King Ying, aged 71, the wife of Mr Lam Ping Hing (who signed the 2^nd and 3^rd tenancy agreements with the 2^nd Defendant) gave oral evidence.  She confirmed that her father-in-law had passed away in 1983, when her husband inherited the property.  Her husband, who had filed a witness statement, did not give oral evidence.  She had lived in the village for 55 years.  Her husband, on 10 June 2002, sold Lot 136 SB ss1 (the rented land) to the 4^th and 5^th Plaintiffs for HK$30,000.  That is the land now thrice let to the Defendants. 

41.  In 1970, Madam Yau began renovating her own house, which was to the south of the “golden house”.  At that time, Madam Wong occupied a small house near the garden of Madam Yau's place.  In 1973, Madam Wong was asked to move by Madam Yau, and for this reason, the 1^st tenancy agreement was entered into, in which Madam Wong would rent a piece of bare land further to the north of the piece of land she was then occupying.  Madam Yau and her husband paid Madam Wong HK$1,500 as compensation, so that Madam Wong and her son, Mr Li, could build a new house on that rented land. 

42.  Madam Yau confirmed that after the Defendants had built the house on the property leased by her father-in-law, that they had installed a wire fence along the front of their house, parallel to the pavement under the footbridge.  However, Madam Yau stated that no fence had been installed at the rear of the property, as she said that another family in the village, surnamed Wong (who reared pigeons), had already installed a wire fence some distance from the rear of the Defendants' house, so that there was no need for Madam Wong to install a fence at the back of the property.  Madam Yau said that that fence had been erected in 1965 and that it existed until 2001, when it was pulled down by the 4^th Plaintiff as he had purchased the land over which that fence was built.  It was put to Madam Yau that the 2^nd Defendant had erected another fence, parallel to the fence put up by the other Wong family, and very close to it.  Her reply was that because of the trees and vegetation she simply could not tell whether that was so or not.

43.  Her evidence was that Madam Wong worked as a stay-in domestic helper, and only returned on the weekend to the rented property where Mr Li, his wife, and their 2 children lived.  She stated that Madam Wong retired in 1992 and only lived full-time on the site from that time.

44.  Madam Yau denied that there was any oral agreement between her husband and the Defendants that they could live in the tenanted premises for life. 

45.  In the course of the Court's invaluable site visit to the property, Madam Yau gave further sworn evidence.  She stated that the refuse area, in the 1974 agreement to lease (and its 2 successors), had been right in the middle of the property now occupied by the Defendants.  She demonstrated its dimensions and was insistent that it was so situated.  (All the other witnesses in the case who gave evidence on this aspect were insistent that the refuse area was in fact not on the rented property at all, but was the small piece of land in front of the building called the Fire Prevention Committee Building.)  

46.  In addition, the witness confirmed that from as early as 1974, the 2^nd Defendant had kept a dog at the rented premises and that throughout “the area was cordoned off, as the dog was not fixed to a rope within the garden”.

47.  The next witness was Mr Nam Chi Cheung, Raymond, the 4^th Plaintiff.   He and the 5^th Plaintiff purchased all the land in Lot 137 Section A for HK$3,300,000 on 5 June 1998 from the Church.  This entire Lot comprised 15 subsections as well as the Remaining Portion and totaled 2106.4m².  Their intention was, in conjunction with a development company, to develop small village houses (each house consisting of 3 storeys of 700ft²). 

48.  In April 2000, notice of the proposed development had been placed at conspicuous locations around the village.  No one objected.  As a result, the 4^th Plaintiff incurred the necessary costs of Building Licence fees prescribed by the District Lands Office (Shatin) under the small village homes policy.  It was only in January 2002 that the Plaintiffs were ever aware that the Defendants alleged adverse possession and because of that unresolved issue, the development could not proceed at least in relation to the land which the Defendants were occupying.  The 4^th Plaintiff's evidence was that the loss of profit from the inability to construct 4 houses (as only 3 can be built if the land is held to be adversely possessed) was in the order of HK$3,300,000 – coincidentally, the same amount paid for the entire Lot 137 – 15 subsections. 

49.  After he and his brother had purchased the property, Mr Nam said that on one occasion he saw Madam Wong planting ginger just outside the fence enclosing the Defendants' property, and he told her to desist as he was the owner of that land.  He also told her that she would have to return the rented property to him at the end of the tenancy in February 2004, as it was required for development purposes.

50.  Mr Henry Chan, a qualified surveyor was called as an expert witness by the Plaintiffs.  He had prepared the plan incorporated in this judgment (although the Court has itself modified it, by removing certain irrelevant matters and introducing 4 new co-ordinates (L, M, Q and Z), for the purposes of clarity).  In addition, he gave expert evidence in relation to the set of aerial photographs produced by both sets of parties to the action.  He stated that the examination of aerial photographs (which was part of his usual professional requirements), depended on a number of factors including the height from which the photograph was taken, the time of day, the angle of the camera to the object, the effects of shadows and the size of objects apparently within the photograph.  He stated that an elevated structure generally will cast a shadow and that there can be relief displacement if the gradient of the underlying land is undulating.  He accepted that it would be very difficult to identify from aerial photographs thin metallic posts supporting wire fencing from several thousand feet above.  If there was vegetation over that fence, the task became even more improbable, he fairly added.

51.  In addition, Mr Chan stated that the location of the disputed fence, as it is now in 2006, is in a slightly wider position than disclosed by the Defendants' own surveyor in 2002.  Mr Henry Chan accepted that the fence shown in DD5 (in 1998) was substantially in the place as the fence shown in C134 (in 2002), although at the points on the fenceline B-C, it was different and wider in the more recent survey.  The obtuse angle between A-B in C134 was also missing from DD5.   

52.  Mr Chan accepted that because the parties' different surveyors would have used Mr Li's hut as a measuring reference, it followed that different surveyors may have used different parts of the hut as the reference point.  This was exacerbated by the fact that a temporary structure, such as the hut, did not have well-defined regular angles.  All of those facts he agreed, could affect the precision of any measurements.

53.  While there is some difference between plan DD5 and C143, it is material to recall that even the Plaintiffs, who commissioned Plan DD5 in 1998, did not believe it to be reliable.  The scale is 1:400 and the Plan was designed as Mr Nam, the 4^th Plaintiff stated, as only a “provisional draft”, as the division of the whole of Lot 137 into the 15 sub-Lots had not even been made.  I agree that this Plan is of little utility as it was much less detailed as it covered a much wider area; it also saw the fenceline as a straight line whereas it never has been.  The Plan C143 prepared in 2002 and the Plan in para [6] herein prepared in 2006, are very substantially similar.  Any difference is truly de minimis.  The survey in 2006 by Mr Henry Chan of Henry Chan Surveyors Ltd on behalf of the Plaintiffs, is therefore fairly comparable to the Plan by Andrew Lau and Associates (China) Ltd prepared for the Defendants in 2002.  The Plan prepared by Mr Henry Chan is more valuable being at a scale of 1:100; that by Mr Lau of 1:150.

54.  Professor C Y Jim, who is the Chair Professor of the Department of Geography at the University of Hong Kong gave expert evidence, called by the Plaintiffs.  Prof Jim was clearly an eminent scholar at the top of his field, well qualified to give expert evidence on the age of the trees found within the Defendants' fence.  After an exacting scientific survey and using statistical Pearson correlation coefficients, he concluded that the jackfruit and wampi trees on the property were no older than 14.7 years.  His evidence was impressive and ultimately unchallenged.  He did not give evidence about the age of the single longan tree referred to in the evidence of Mr Sammy Au, the expert called for the Defendants, as there were no comparator longan trees available in the surrounding areas which could be both measured by girth and for which reliable evidence of age was available.

Dendrochronology – An Unavailable Scientific Method for Trees in Hong Kong

55.  Prof Jim stated that the dendrochronological method, the science of tree growth rings, was not available because in Asia trees grow continuously throughout the year without respite and without a marked difference in growth rate between the seasons, so that without a clear distinction between wide rings (warm season with fast growth) and narrow rings (cold season with hardly any growth) within an annual cycle, it is not possible to safely determine the age of trees, based on tree rings.

Mr Sammy Au

56.  Mr Sammy Au, a practising arborist, gave expert evidence, called by the Defendants .  His original report had given evidence of the age of the same trees as considered by Prof Jim.  Whereas Prof Jim found the oldest of those trees to be 14.7 years, Mr Au said that they were “30 years old or even more” – this is a huge difference and well outside the range of expected opinions between 2 experts in such a matter.  I distinctly prefer the evidence of Prof Jim.

57.  Mr Au was eventually asked only to give oral evidence about the single longan tree situated just northeast of the 2^nd Defendant's house (and not on the rented property).  This, in itself, was unsatisfactory as Prof Jim, for good reason, had not examined this tree.  One expert therefore was giving evidence about one tree which the other expert had deliberately excluded from consideration.  In relation to this longan tree, Mr Au said it was also over 30 years old.  He had grown longan trees himself for much of his life and kept a nursery of some 60,000 different types of trees. 

58.  He said that particularlongan tree had poor drainage and growing space and that the soil was compacted around its roots restricting its development.  He accepted that his opinion was simply based on recognising the ages of trees as a function of his own day to day experience.  He emphasised that a tree is not necessarily columnar in shape that as the longan had a girth of about 0.5m measured 1.5m from the ground, the age of 30 years plus was assured. 

59.  Despite Mr Au's zeal for his own conclusion as to the age of this tree, I am unable to find it established that it is more than 30 years old; although it is, by its dimensions and proximity to the hut, obviously a tree though that had been there for some very significant time.  In the end, little turns on the age of this tree, as by itself it proves nothing.  The real issue in this case is the fencing and the intention of the Defendants as deduced from the totality of their various actions in relation to the disputed land.

Aerial Photographs, Photographs and Plans

60.  A large number of aerial photographs are in evidence dealing with views of the locality, from various heights.  The photographs were taken from 1973 and are generally in black and white and are inconclusive.  The disputed land in each of these photographs covers less than 1/2% of the total area shown, so detail is difficult.  The photographs have been relied upon to suggest or alternatively not suggest, the existence of a fence surrounding the property.  In almost every photograph the alleged fenceline is obscured by the massive overhanging crown of huge long-established trees (in the earlier photographs not being trees within the disputed property). 

61.  The earliest fence on the property that can detected from any photograph is shown in photograph 2 on D6 – a photograph taken in May 1998 from ground level, looking east southeast toward Shatin. 

62.  The Plaintiffs' pleaded case is that the Fire Prevention Committee had built the fence L-A-B-C, not the Defendants.  The Defendants have never claimed to have built the alleged fence between L-A.   But Madam Yau, who on this point was reliable, stated that a fence that existed near the line A-B had been built by the other Wong family; not the Fire Prevention Committee.  However, she would not exclude the fact that the Defendants had built A-B etc themselves, as thick vegetation prevented any person passing by from seeing whether the Defendants had built a fence there or not.

63.  A number of Government Plans are in evidence.  They were designed for planning the neighbouring Lek Yuen Estate and generally concentrate on features over there.  None of the Government plans ever show the fence built by the other Wong family or the fence said to have been built by the Fire Prevention Committee.  It is not until 1998 that the Government plans ever identified a fence in the area.  This is not surprising as the existence or otherwise of a fence in that area is of very little relevance indeed to the Lek Yuen Estate, situated completely on the other side of Tai Po Road.  A surveyor's plan commissioned by the Plaintiffs does show a fence around the Defendants' property in 1998. 

Mr Li Wai Kin

64.  The 2^nd Defendant, Mr Li, gave evidence.  He stated that shortly after his mother had taken up the 1^st tenancy in February 1974, he built the hut and then a fence around it.  At that time he started rearing dogs.  The smaller hut was built in 1976-1977 and has been occupied throughout since then by his mother, Madam Wong.  His children grew up in his hut, with the son being born in July 1979 and the daughter a few years later.  He was 23 years old when his mother entered into the 1^st tenancy agreement. 

65.  No copy of the formal legal surveyed dimensions of the Lot referred to in the tenancy agreement had every been provided to the Defendants by any landlord and only the general description in the tenancy agreement enabled him and his mother to loosely infer the area covered by the tenancy, as it was all bare ground without markings or boundaries.  Mr Li and his mother built the hut, over a 2 month period.  It was originally a very small hut, only designed to house himself and his mother.  Immediately after building the hut, his mother and himself built a wire-mesh fence to enclose the hut.  A gate with a lock was installed at the only entrance to the property; which is still there.  They grew flowers, plants and trees within the fenced area.  They made the area within the fence their home.  It was partially paved with bricks and a little chicken coop was later built.   

66.  About 6 months after taking up the tenancy, a building, known as the Fire Prevention Committee Building, was constructed just at the southern end of the place occupied by the Defendants.  When that building was being constructed, one of the committee members, Mr Chan Kwan Lam, told Mr Li that the actual size of the area that his mother had rented from Mr Lam Cheung Shing was really rather small.  In the course of building that Committee Building, some attention had been paid to the formal boundaries on which that building would sit, therefore, the size and shape of the land tenanted by the Defendants immediately north of it, came into consideration.  Mr Chan stated to Mr Li that the bulk of the Defendants' hut had been built, not on the tenanted land, but was actually built on some other party's land.  In the result, Mr Li, Madam Wong and Mr Yeung Sui Sang (who had been the witness to the 1^st tenancy agreement) approached or confronted Mr Lam Cheung Sing, seeking to obtain a reduction in their rent, in the realisation that the actual area they had rented was tiny.  Mr Lam Cheung Sing, in the presence of his son Mr Lam Ping Hing (who had given a witness statement in these proceedings, which did not deal with this issue at all and who did not give oral evidence at the trial), acknowledged that he had only rented to Madam Wong the area he actually owned, which was very small indeed.  He refused to reduce the rent.  Because he was aware that the hut had been built over land owned by another party, he expressly stated that it was entirely the responsibility of the Defendants to deal with any dispute that may occur or action that may be required because of their expansion into that land.  He disclaimed any interest in or responsibility for the expansion and made it clear that he would be completely uninvolved in any matter that may transpire in relation to that expansion.  Mr Lam emphasised that the agreed rental was not high, no matter how small the land actually owned by him was, and that the tenant had to continue to pay the original rent.  After further bargaining, it was agreed that instead of the Defendants paying annually the rent would now only be paid half-yearly.  This was to show the dissatisfaction caused by the non-disclosure by the landlord of the real size of the very small piece of land that he actually owned.  The Plaintiffs did not cross-examine Mr Li to deny this incident.  Mr Yeung Sui Sang also gave evidence confirming that the conversation happened, in the full terms set out above.  He was not cross-examined about this matter. 

67.  Mr Li stated that from 1974 until an incident on 4 January 2002, when an excavator pulled down the fence surrounding the property, no one had ever challenged the right of himself, his mother, and family, to occupy and possess all the land within the enclosed fence.  Mr Li stated that it was the 4^th Plaintiff who had directed that the fence be smashed by the excavator.  Mr Li reported this to the Police and instituted proceedings against the 4^th Plaintiff in the Small Claims Tribunal seeking the cost of the damaged fence, the replacement of an electricity pole, TV antenna and cultivated plants and trees.  Those proceedings have been adjourned sine die by the Adjudicator pending a decision as to this adverse possession claim.  In this case, there is no need for the Court to make any finding as to whether the 4^th Plaintiff was so involved or not – it is irrelevant for present purposes.

68.  Upon completing the hut and the fence, Mr Li then began altering and expanding the hut by erecting a storeroom.  A cultivated garden was grown within the fence in 1976.  In 1984, Mr Li signed the 2^nd tenancy which, as to the area rented, was identical to the 1^st tenancy, ie the landlord made no claim to rent in relation to the area of land into the other Lots where the Defendants had trespassed. 

69.  Mr Li signed a 3^rd tenancy agreement which on its face ended on 9 February 2004, although the Defendants have remained in occupation and possession of that area.  No claim to the encroachment is made by the then landlord in the third tenancy agreement. 

70.  Mr Li stated that Mr Lam Ping Hing had orally agreed that he and his mother could stay and rent that area for life.  To my mind, that suggested conversation was unreal, and I need say no more about it, although I have certainly taken this into account in evaluating the rest of Mr Li's evidence. 

71.  The first challenge to the Defendants' possession of the fenced area was when the excavator destroyed the fence in early 2002.  Mr Li re-erected the fence, but as the land had been badly cut up by the excavator, the metal poles would no longer support the fence at their original position so the new fence line A-B-C was erected about 1 metre inwards of the former fence line. 

72.  Under cross examination, Mr Li stated that he had not received the notice of the intention of small village home development dated 17 April 2000.  He said, however, that even if he had ever received it, by looking at it he would be unable to identify from it that the property he had been living in since 1974 was to be affected by the development.  He was aware of the general development intention, but did not know until 4 January 2002 when his fence was smashed down by the excavator, that his land was involved. 

73.  The hut in which he and his family have lived in was erected in 1974 before the Fire Committee Building was constructed.  During the construction of the Committee Building, Mr Li permitted the builders to use the water but not the electricity at his home.  He had built the fence around his hut and that this was completed before the Fire Committee Building was constructed.  No fence had ever been constructed by the Committee.

74.  His mother, Madam Wong, had been a domestic helper, even before the 1970s.  She had baby-sitted for the So family in the village.  On some occasions she stayed with her employers and on other occasions the So child stayed with her.  Madam Wong had retired in 1981.  She had applied for public housing and did move in for 1 month with her younger son to a housing estate, in the winter of 1981, before returning to live in the village.  Otherwise, she has continuously lived, apart from that month, in the rented premises. 

75.  Mr Li denied in cross-examination that the purpose of erecting the fence was to prevent his cats and dogs leaving the property.  He reiterated that the main purpose of building the fence was to prevent other people coming in and to demonstrate the boundary of his property – basic security of possession.  Plants and trees were grown inside the fence, but some were also grown outside the fence. 

76.  Mr Li said in 1976-1977, a longan tree was grown in front of the storeroom on the house.  At that time, he was expanding the house.  A number of trees had been grown, but only that one from that era was left.  This was the tree examined by Mr Sammy Au.  The others had been victims of typhoons and general decay.  Trees he had planted close together survived, but singletons had not.  I am unable to accept the age of this tree as being about 30 years of age or even more.  It has undoubtedly though been there for a large proportion of the time that the Defendants have been there.

77.  Mr Li rejected the Plaintiffs' suggestion that he only expanded the fence line in the 1990s.  He said that A-J-K was there from 1974 and had never been altered.  That the extension was in relation to A-B-C-K which had occurred in 1977. 

78.  Mr Li did not own any other land.  His 2 children have gone on to complete post-graduate tertiary education in Australia - one an accountant, the other a mechanical engineer.  He and his wife had supported their education and living expenses throughout their education. 

79.  He accepted that in August 1974 he learned that the land rented to his mother was very small.  Mr Li, who was paying the rent for his mother, had stopped paying the rent for a short while in 1976 as a protest about the size of the land and the misrepresentation.  He reiterated that Mr Lam Cheung Sing, on being confronted in August 1974 about the tininess of the land he actually owned, stated that Mr Lam wanted nothing whatever to do with the other land into which the Defendants had trespassed.  Mr Lam's sole concern was to obtain his money for his land.  That is all he wanted.  Mr Lam stated that even if it was only 1 square foot in size, that the Defendants still had to pay, otherwise they had to return that square foot of land back to him.  Mr Li said there had been 2 or 3 separate discussions with Mr Lam before he finally did not dispute that the actual area of land he owned which they had rented, was very small indeed.  Mr Lam said he would not pay any attention to what had happened on the other land as, although the Defendants were using it, it was nothing to do with him (Mr Lam), so if anyone claimed the land, in any dispute, Mr Lam would entirely disassociate himself now, in relation to it.

80.  After this resolution, Mr Li had the incentive to further expand both the hut and to widen the area enclosed by the fence.  The 2^nd hut was also then built in 1976-1977 for his mother to live in, as he was getting married.

81.  Mr Li said it was absurd for the Plaintiffs to suggest that he had between 1974 – 1990 only enclosed the front of his hut with a fence J-K leaving the back and sides completely open.  He stated that in 1990 he had replaced and upgraded the original fence as it was falling into disrepair.

Mr Yeung Sui Sang

82.  Mr Yeung Sui Sang, aged 75, gave evidence.  He lived in the village from 1953-1998.  He confirmed that the refuse collection point in 1974 was at the place eventually built as the Fire Prevention Building.  He had done the leveling and formation work for the site of that building.  He stated that after the Defendants had built their house, they then immediately built the fence enclosing it.  He said the fence was expanded in about 1977 and in 2006 surrounds about the same area as it did in 1998, when he was previously last in the village.  He was a friend of Mr Lam Cheung Sing and of the 2^nd Defendant.  He witnessed the 1^st tenancy agreement, although he was unable to read Chinese.

83.  Mr Yeung was present when the Defendants challenged Mr Lam about the area and size of the property he had rented to them.  Because Mr Yeung had witnessed the 1^st tenancy agreement, he believed he owed a duty to uphold the fairness of the agreement, therefore, he was present when Mr Lam admitted that Lot 136 SB ss1 was very small.  Mr Lam acknowledged that the Defendants had built much of their hut and garden on land owned by other people, but he declined to reduce the rent, even though the piece of land he had really rented them was very small.  The Defendants made it clear to Mr Lam that the rent was only for his land.  Mr Lam made it clear to the Defendants that his only interest was getting the rent for his land.  In response, the Defendants said they would occupy the other land.  Mr Lam disclaimed any intention to be involved in any way with that other land. 

84.  As the matter had been settled by this conclusion, the Defendants thereafter extended their home boundary by erecting a wider fence encompassing more land. 

Mr Chim Yun Kwai

85.  Mr Chim Yun Kwai, aged 59, gave evidence.  He now lives in New York.  He lived in the village in 1974 and saw the existence of the Defendants' hut then.  He stated that the area currently enclosed by the fence is larger than it was in 1974.  In 1977 (on a day which was his son's 2^nd birthday), he took his son to play at the Defendants' house and the property was then enclosed by a fence.  He was adamant that the refuse area was at the Fire Precaution Building and said it was “impossible” that the refuse area was within Mr Li's property as Madam Yau had claimed.  The smaller hut of Madam Wong was present in 1977.

Findings of Fact

86.  While Madam Yau was honest in giving her evidence, her reliability was generally very poor.  She was an amiable, elderly witness, who had only scant knowledge of the tenancy agreements – being completely illiterate.  Her contact with Madam Wong was virtually nil after 1974 and her recollection as to the siting of the refuse area cannot be accepted.  She was emphatic that no oral agreement had been reached with the Defendants that they could live on the site for life, although she did not give evidence that she was present at the suggested conversation.  Her evidence as to whether Madam Wong did or did not live on the site, cannot be preferred to the other evidence, especially the 2^nd Defendant's evidence on this point.  Also, her evidence that the 2^nd hut erected on the site, in which Madam Wong lived, was only built in 1994-1995, after the 3^rd tenancy agreement was signed, cannot be accepted. 

87.  Mr Nam's evidence was straightforward and there is no reason to disbelieve him in relation to the matters on which he gave evidence.  The potential loss figure he referred to was general and globalised; even though he was oddly not cross-examined in relation to it.  He gave no sufficient oral evidence to make out the basis on which the case was opened, namely for a claim for aggravated or exemplary damages for trespass.  His witness statement did not deal with this issue either. 

88.  Mr Henry Chan's evidence was clear and given in a balanced way, completely consistent with an expert's duty to the Court.

89.  I believe the evidence of Mr Li that after February 1974 he spent the next 2 months or so building the house.  He immediately first put up the fence along the line J-K to prevent any person entering the property, from the concrete footpath, as otherwise any passerby could walk on to the land and avail themselves of anything there.  He then built up the sides of the fence and enclosed the property with a fence in the first few months after his mother entered the tenancy in 1974.  The original house was smaller than it now is and he expanded it over time.  He did so after Mr Lam Cheung Sing had unequivocally disclaimed any interest in or responsibility for the expansion on to the then Church land.  Mr Lam accepted that he let only the land he owned in Lot 136 and had no wish to be involved in any way in relation to any consequences of the Defendants' expansion, therefore Mr Li also expanded the fence in 1976-1977 to approximately the position it is now in.  That fenceline position has changed for a number of reasons.  Firstly, the original fence was falling into disrepair and was replaced in the 1990s.  It was gradually overwhelmed by the weight of the vegetation growing up, over and on it.  Secondly, the fence was knocked down by the excavator in January 2002 and had to be re-erected at a line about a metre inside the original boundary.  That line was later widened back to about where the line had been.  It is now essentially in the same place as it was in 1997.

90.  It is inherently probable that a family would wish to build a fence to surround their property, which would otherwise be open to all predations.  A locked gate in the fence yet with open sides or ends to the fence, is unreal.  Madam Yau, for the Plaintiffs, accepted that the Defendants' dogs were “cordoned off” as early as 1974.  The evidence of Mr Yeung and Mr Tsim support Mr Li and I also believe their evidence.  I believe Mr Li's evidence as to the erection of the 1974 fence, the widening of it in 1976-7 and the fact that the fenceline was generally maintained until the fence was destroyed by the excavator.  The necessary 20 year adverse possession period of the widened area was surpassed, at the very latest, by 1997.  I find that the fence line in 1997 and therefore the boundary for the prior 20 years to then at least, is that shown by the plan at para [6] herein.  See para [53] earlier.

91.  The history of the aerial photographs is hardly conclusive but they do tend to reinforce the fact that the shape and location of the Defendants' perimeter has been broadly similar from 1977-2000.  In photograph D23, there is no trace of either the other Wong fence or the purported Fire Prevention Committee fence so it is not unreasonable to be unable to also identify the existence of the Defendants' fence, for all the balanced reasons given by Mr Chan the expert for the Plaintiffs. 

92.  Even if I were wrong as to this finding of fact and the other Wong fence did somehow partially mark the western boundary of the area occupied by the Defendants at L-A-B, this would not alter my conclusion that the 2^nd Defendant's hut and the disputed land was from 1974 always enclosed by some fence.  On that alternative view, the Defendants' own exertions in erecting the remainder of the fence would have ‘completed the circle' for the purpose of demonstrating possession of the land. 

93.  To be an adverse possessor a person does not have to construct the entire fence enclosure creating a defined boundary of control and possession; where the existence of a fence is in issue.  True, merely repairing an existing fence (see: Wilson vExecutors of the Will of Martin, Deceased [1993] 1 EGLR 178) or joining up a few missing parts may be, in many circumstances, too neutral a factor by itself to show  a wider intention to possess.  But here, the Defendants, as a finding of fact, clearly manifested, through all their conduct of occupation, the intention to dispossess the paper owners on the disputed land.  I apply the Court of Final Appeal's endorsement of Buckinghamshire County Council vMoran [1990] Ch 623 (CA) as being the authoritative approach.  I also find, that Madam Wong was continuously present from 1974 until the present on the disputed land, notwithstanding her 1 month absence in 1981 and her occasional absences for domestic help employment.

Containing Animals by Enclosure

94.  In The Mayor and Burgesses of the London Borough ofHounslow v Minchinton (1997) 74 P&CR 221 (CA) (Butler-Sloss, Millett and Thorpe LJJ) the Court quickly dealt with an argument by the registered owner that a fence erected by a squatter to keep his dogs in, rather than other persons out, was not evidence of an intention to possess the land.  The Plaintiffs in the present case had taken the same approach in cross-examination.  In Minchinton at p233, Millett LJ (as he then was) said of the squatters:

“But their motive is irrelevant.  The important thing is that they were intending to allow their dogs to make full use of what they plainly regarded as their land, and which they used as their land.  They wanted to keep their dogs within the boundaries of their own land.  That was a perfectly understandable usage, but the enclosure which it made necessary was inconsistent with any continuance of possession of the council.  The defendant and his predecessors in title had to keep the council out if they were to keep their dogs in.”

95.  In the present case Mr. Li erected the fence not just to keep his dogs in, but to keep the world out.  (He accepted that the family cats did not consider themselves obliged to remain within the fenceline – a feline verity.)

Doctrine of Encroachments by Tenants

96.  In the excellent monograph by Stephen Jourdan, ‘Adverse Possession' at p471 this doctrine, which has been described as arcane is clearly introduced.

“Sometimes the tenant under a lease takes possession of land belonging to the landlord, but not included in the demise, by virtue of his possession of the demised premises.  If the tenant does this that land is presumed to be an addition to the land demised to the tenant, so that it becomes subject to the terms of the lease and must therefore be given up to the landlord when it ends unless the tenant's conduct shows that he occupied the land for his own benefit, and not as part of the demised premises.  If the tenant holds possession of land belonging to a third party for the limitation period, the position is not entirely clear.”

At p 484 the author also stated:

“There have been very few cases where the rights of the landlord and tenant vis-à-vis a third party have been considered and the law is not entirely clear.”

The third party situation is this case.  Neither of the 2 lessors of the rented land occupied by the Defendants since 1974, have ever owned the other land encroached upon and enclosed within the fence built by Mr Li.  The issue is whether the Defendants as tenants or the current owners of the rented land, have become, by adverse possession, the owners of the encroached upon disputed land.  Because the Defendants challenge both the validity and applicability of the encroachment doctrine, it is necessary to decide whether it represents the common law in Hong Kong.  If it does, the next question is whether the presumption at common law has been rebutted so that the encroached lands have been held by adverse possession for the tenants, as opposed to their landlord.  

97.  In Whitmore v Humphries (1871) LR 7 CP 1, 4-5 Willes J said

“By the rule of law applicable to this subject the landlord is entitled at the determination of the tenancy to recover from the tenant, not only the land originally demised, but also any land which the tenant may have added to it by encroachment from the waste, such encroachment being deemed to be made by him as tenant as an addition to his holding, and consequently for the benefit of his landlord, unless it is made under circumstances which shew an intention to hold it for his own benefit alone, and not as part of his holding under the landlord…it is not confined to cases where the encroachment is upon land to which the landlord is entitled, it applies to cases where the land encroached upon does not belong to the landlord.” 

Genesis of the Presumption of Encroachment

98.  The encroachment presumption that any encroachment by a tenant is for the benefit of the landlord “appears to be of considerable antiquity”: Earl of Lisburne v Davies (1866) LR 1 CP 259, 266 per Willes J; yet in 1795, both Lord Kenyon in Doe d Colclough v Mulliner (1795) 1 Esp 460 and Thomson B in Doe d Challiner v Davies (1795) 1 Est 461, 462 did not accept that the presumption existed.  However, 13 years later, the existence of the presumption (at least where a tenant had encroached on other land, also owned by the landlord) was confidently stated by Graham B in Bryan d Child v Winwood (1808) 1 Taunt 208, 209.

99.  Serjeant John Adams in his 1830 ‘Treatise on the principles and practice of the action of ejectment: and the resulting action for mesne profits' stated that the existence and operation of the presumption was very unsettled – a passage noted in the early Canadian decision Doe d Smyth v Leavens (1846) 3 UCQB 411, 415.  (In City of Toronto v Ward (1909) 18 OLR 214 (Ontario Court of Appeal), Stackhouse v Wade (1950) 26 MPR 312 (New Brunswick Supreme Court) and Piercey v Connors (1983) 43 Nfld & PEIR 352 (Newfoundland Court of Appeal) the presumption was held to exist in Canadian law.  Those judgments though did not deal with the third party scenario.)  

100.  Despite the textbook view of 1830, Parke B in Doe d Lewis vRees (1834) 6 C&P 610 said

“It is clearly settled that encroachments made by a tenant are for the benefit of his landlord, unless it appears clearly by some act done at the time of making the encroachment that the tenant intended the encroachment for his own benefit, and not to hold them as he held the farm to which the encroachments were adjacent.”

101.  Two years later, Coleridge J in Doe d Earl of Dunraven vWilliams (1836) 7 C&P 332, 333 summing up to a jury in proceedings for ejectment by the lessor to recover a piece of waste land enclosed by his tenant, stated that “Prima facie, the law presumes that every inclosure made by a tenant adjoining the demised premises was made by him for the benefit of his landlord…”.  Then in 1846, in Doe d Lloyd v Jones (1846) 15 M&W 580, 584 Alderson B, arguendo stated “…that the presumption may be rebutted by the repudiation of the landlord, as well as by the acts of the tenant.”

102.  The complexities of the doctrine became over-extended in Doe d Buck v Moyes (1849) 13 LTOS 325.  There a tenant, who held 2 different properties from 2 different landlords, encroached beyond their properties.  How did the presumption operate?  Parke B held that the encroachment was “…for the benefit of the adjoining close…” to the encroachment, and if the presumption was rebutted in relation to that landlord, then the encroachment would be successively presumed to be held for the benefit of the second landlord, whose land was more separated from the encroachment.

103.  In Doe d Baddeley v Massey (1851) 17 QB 373, the Court of Queen's Bench (Lord Campbell CJ, Patteson, Coleridge and Erle JJ), held that the presumption had been rebutted.  The owner leased a piece of land to the Defendant, Massey.  The tenant then asked the landlord to also lease to him another piece of land, which was adjacent to the first piece, in order that he could build a house over both pieces of land.  The landlord refused to let the other piece of land as he had already granted a right of way over it.  The landlord told Massey, that “…if he built there, he must do it on his own responsibility”: at p375.  Lord Campbell CJ, delivering the judgment of the Court found that “the conduct of both parties”, (p381), showed that the presumption was rebutted.

Encroachment Over Land of a Third Party 

104.  In Andrews v Hailes (1853) 2 E&B 349 a decision of the Court of Queen's Bench (Lord Campbell CJ, Coleridge, Erle and Crompton JJ), a tenant had encroached on waste land, not belonging to his landlord and separated from the holding by a road.  At the termination of the tenancy, the tenant gave up the holding but sought to maintain possession of the encroachment.  The Court held that the mere fact of the intervention of the road between the holding and the encroachment did not rebut the presumption. 

105.  At p353 Coleridge J, arguendo, referred to several earlier cases where the Courts had had to consider the position where, there had been an encroachment on land not owned by the landlord, but added “…I do not know that they have been discussed in banc, or got into the books of reports.”  The Court then took the opportunity to analyse the doctrine. Lord Campbell CJ at 353, concluded that the rationale for the presumption was an estoppel, where the tenant is unable by evidence to rebut the appearance that he has held the encroachment on behalf of the landlord.

106.  Coleridge J at 354, said that “the presumption is one depending on the inference to be drawn from the facts.”  Erle J at 355, took the quite separate view that the tenant ought not to be able to retain the encroachment as the tenant was “a wrong-doer…it is morally a theft; and it ought not to enure to the benefit of the thief.”  Crompton J at 356, held that the presumption was rebuttable “by some act done at the time of the making of the encroachments.”

107.  Lord Campbell CJ, in a supplementary judgment at 356 added

“…in the opinion of this Court, where the encroachment is on soil not the property of the landlord, the presumption should be stated to be that the encroachment is part of the holding: not that the tenant encroached for the landlord.”

The approach of Lord Campbell CJ in Andrews v Hailes was cited with approval by the High Court of Australia in the joint judgment of Mason CJ, Brennan, Dawson, Gaudron and McHugh JJ in Amatek Ltd v GoogoorewonPty Ltd (1993) 176 CLR 471, 475-476 (HCA).

108.  In Doe d Croft v Tidbury (1854) 14 CB 304, 324-325 Jervis CJ in the Court of Common Pleas (also delivering the judgment of Maule, Williams and Talfourd JJ) stated that Andrews v Hailes was a clear decision showing that the encroachment presumption operated so that “the tenant takes it for the aggrandizement of the estate of which he is tenant, and not for an estate of his own; in otherwords, for the benefit of his landlord, and not for himself.”

Kingsmill v Millard : An Exposition of the Encroachment Presumption

109.  In 1855, the Court of Exchequer (Parke, Alderson and Platt BB), decided Kingsmill v Millard (1855) 11 Exch 313 a case, which together with Whitmore v Humphries (1871) LR 7 CP 1 are generally accepted as the leading authorities.   Parke B (later Lord Wensleydale) at 318 stated

“It is laid down in all the cases – whether the inclosed land is part of the waste, or belongs to the landlord or a third person – that the presumption is, that the tenant has inclosed it for the benefit of his landlord, unless he has done some act disclaiming the landlord's title…It is not necessary that the land inclosed should be adjacent to the demised premises; the same rule prevails when the encroachment is at a distance.”

Baron Parke added at 319

“But if the landlord is allowed to remain under the belief that the encroachment is part of the farm, the tenant is estopped from denying it, and must render it up at the end of the term as a portion of the holding.”

Covenant to Repair in Lease Extends to Encroachment

110.  In White v Wakley (No 1) (1858) 26 Beav 17, 22 Sir John Romilly MR held that the effect of the presumption includes that the obligations under the lease as to repair and the use of the demised property, apply equally to the land encroached upon.  “…I also consider it to be subject to all the same obligations, and clothed with all the same advantages as were to be found in the original indenture of demise.”

111.  The English Court of Appeal confirmed this approach in Perrott (JF) & Co Ltd v Cohen [1951] 1 KB 705 where a tenant's encroachment involved the use of lavatories on non-demised land, owned by the landlord.  At the determination of the tenancy, the landlord successfully claimed for repairs to the lavatories as being regulated too by the tenant's covenants for repairs contained in the lease.  Denning LJ at 710 stated that estoppel was the basis for the encroachment presumption.

“The principle underlying the cases on encroachment is not perhaps strictly an estoppel, but it is akin to it.  If a tenant takes possession of adjoining property and by his conduct represents that he is holding it under the demise, then, if the landlord acts on that representation by allowing the tenant to remain in possession, the tenant cannot afterwards assent that he is holding it on any other footing.”

Presumption Not Restricted to Adjoining or Contiguous Land

112.  In Earl of Lisburne v Davies (1866) LR 1 CP 259 the Court of Common Pleas (Erle CJ, Willes, Keating and Montague Smith JJ) concluded that while the presumption was a prima facie presumption of fact, the encroachment did not have to be to land either adjacent or contiguous to the leased land to be still within the presumption.

113.  Willes J at 266 stated

“[The presumption] would apply or not according as it might appear that the land was so near to the holding that by reason of the proximity the tenant gained the opportunity of annexing it, and the fact that the circumstances of the enjoyment might induce the landlord to wink at the incroachment.”

At p288

“It is enough if it is so near that by reason of its nearness the tenant gained the opportunity of making it, and the landlord might have tacitly acquiesced in it.”

114.  Montague Smith J at p268 added

“In many cases the question does not depend upon the relative distance, but upon the whole of the circumstances under which the incroachment is made.  In that way only can the element of distance form a material ingredient.”

No Presumption Where Squatter in Possession of Land Before Grant of Tenancy to Squatter of Adjoining Land

115.  The presumption does not apply where a squatter takes adverse possession of land and that landowner later grants the squatter a tenancy of other land adjacent that upon which the squtter is already in possession: Dixon v Baty (1866) LR 1 Exch 259, 261 per Pollock CB, Martin, Bramwell and Pigott BB.

Whitmore v Humphries : The Rationale(s) of the Presumption

116.  In Whitmore v Humphries (1871) LR 7 CP 1, 5 Willes J introduced his judgment by acknowledging that encroachment involved “considerations of some nicety”, then restated the rationale(s) of the rule

“… is based upon the obligation of the tenant to protect his landlord's rights, and to deliver up the subject of his tenancy in the same condition, fair wear and tear excepted, as that in which he enjoyed it.  There is often great temptation and opportunity afforded to the tenant to take in adjoining land which may or may not be his landlord's, and it is considered more convenient and more in accordance with the rights of property that the tenant who has availed himself of the opportunity afforded him by his tenancy to make encroachments, should be presumed to have intended to make them for the benefit of the reversioner, except under circumstances pointing to an intention to take the land for his own benefit exclusively.  The result is to avoid questions which would otherwise frequently arise as to the property in land, and to exclude persons who have come in as tenants, are who are likely to encroach, from raising such questions.”

117.  The explicated rationale for the rule was that tenants often could not resist the temptation to encroach, because of an opportunity provided to them by the landlord.  Therefore, it was “considered more convenient and more in accordance with the rights of property” that the presumption operated.  The presumption in favour of the landlord led to greater certainty in the law as to ownership of real property.  The rule was not based on any notion that the encroacher was a wrong-doer (c.f. the censorious remarks of Erle J in Andrews v Hailes (1853) 2 E&B 349, 355) nor was the assent or dissent of the landlord to the encroachment, part of the rationale for the rule.

First English Court of Appeal Consideration

118.  The English Court of Appeal first considered the rule in Attorney General v Tomline (1880) 15 ChD 150 (CA), in a case involving the excavation of coprolites.  At p156, arguendo, Cotton LJ after asking

“Is there any case where, if a lessee has encroached and then taken a new lease not including the encroachment, the landlord has been held entitled to the encroachment?”

was informed that Counsel knew of no such case and James LJ at p158, Cotton LJ at p159-160, Thesiger LJ at 161-162 all held that in those circumstances the presumption was rebutted. Cotton LJ added

“…it is liable to be rebutted not only by the circumstances under which the encroachment or accretion was acquired, but by any dealings between the landlord and tenant is determining their rights.  If we fund that there are subsequent grants by the lord to the copyhold tenant, or by the landlord to his leasehold tenant, of the original tenement by a description which clearly does not include the encroachment, then in my opinion the presumption that it was made as an accretion to the original holding cannot apply.” 

119.  Thesiger LJ at p161-162 stated that the doctrine “involves a presumption of fact which is capable of being rebutted…a landlord and tenant may so conduct themselves in the cause of transactions either by deed or otherwise as to shew that the landlord treated the encroachments as not enuring to his benefit.”

Two Judgments at First Instance

120.  In Tabor v Godfrey (1895) 64 LJQB 245, 247 Charles J held that the tenant is entitled to possession of the encroachment during the term of the lease.  Channell J in East Stonehouse Urban District Council vWilloughby Brothers Limited [1902] 2 KB 318, 336, adopted the test of Thesiger LJ in Attorney General v Tomline (1880) 15 ChD 150, 161.

Three Cases in the English Court of Appeal: Encroachment Doctrine

121.  For almost the next 50 years, this doctrine was not litigated before the English Courts.  Then in 1950, the English Court of Appeal considered it twice in the space of 8 months.  In King v Smith [1950] 1 All ER 553 (CA) (Cohen and Asquith LJJ, Roxburgh J) the Court at 555H adopted the approach in Attorney General v Tomline.  Cohen LJ at 557D in a short, separate judgment, also accepted that the presumption also applied in relation to land belonging “to an outside party.”  In the second case, Perrott (JF) & Co Ltd v Cohen [1951] 1 KB 705, (Somervell, Cohen and Denning LJJ), the doctrine was confirmed as an exemplar of estoppel; see para [111] earlier.

122.  Pennycuick V-C in Smirk v Lyndale Developments Ltd [1975] 1 Ch 317, 323 G considered that the law on encroachment had “got into something of a tangle.”  After a review of the leading cases, the principle in Kingsmill v Millard was adopted at 332G.  On appeal, at [1975] 1 Ch 335 (CA), his judgment was reversed (on another point).  In an oral decision, the Court of Appeal (Cairns and Lawton LJJ, Walton J) the Court held at 337H that Pennycuick V-C's statement of the law as to encroachment, was correct.

123.  The decision of the Court of Appeal in Smirk itself made no reference itself to any of the authorities considered by Pennycuick V-C, preferring to deal with its approbation of the analysis below, on a global basis.

Rent Review Provision in Lease Extends to Encroachment

124.  In Kensington Pension Developments Ltd v Royal GardenHotel (Oddenino's) Ltd [1990] 2 EGLR 117, 119D-E Harman J held, after considering Kingsmill v Millard, Whitmore v Humpries and Smirk, that where a tenant had encroached on land, the rent review provisions in the lease also apply to the land encroached upon.  See also Halsbury's Laws of England 4 ed, Landlord and Tenant, Vol 27(1) para 164 fn2.

Presumption Applies to All Land

125.  In Long v Tower Hamlets London Borough Council [1998] Ch 197, 203 it was held that the presumption applied not only as to waste, but to all land.  The rebuttable presumption operates

“in a manner akin to an estoppel, is not dependent upon proof…of any active representation to the landlord by the tenant.  On the contrary, the presumption is treated as applying unless the tenant, during the term, communicates with the landlord in such a way as to show that he is asserting his own title as against the landlord…”.

Critcism of Presumption Re Third Parties

126.  In Trustees of the Michael Batt Charitable Trust v Adams (2001) 82 P&CR 406 Laddie J reluctantly accepted that the presumption applied to land not owned by the landlord; noting that the references in Kingsmill v Millard (and the cases following it) had been obiter in relation to third parties.  Laddie J in para [38] considered that the presumption “may appear feudal when it applies to land belonging to third parties” while the presumption appears “sensible and fair to the extent that it covers a tenant's encroachment on his own landlord's land.”

127.  He concluded that in English law the presumption in relation to third parties was too well-established there, even if it has grown beyond its logical origin to be uprooted in a court of first instance.

128.  In Tower Hamlets LBC v Barrett [2006] 1 P&CR 132 (CA), in a judgment not referred to by Counsel, the English Court of Appeal (Thorpe, Wall and Neuberger LJJ) reviewed the encroachment doctrine that a tenant acquires possessory title for his landlord.

129.  In para [28] Neuberger LJ for the Court stated

“It is difficult to discern the precise basis upon which the courts have decided that a tenant, who squats on a third party's land and thereby acquires title to that land, does so for the benefit of his landlord.”

130.  He added at para [31], after stating that the Court of Appeal was bound by its decision in Smirk, to conclude that the doctrine applied to encroachment upon the land of a third party.

“However, I would be skeptical about the application of the doctrine (especially in relation to land owned by a third party), unless the land to which possessory title is acquired is very close to the demised land and occupied by the tenant together with that demised land.” 

Is the Encroachment Presumption Part of Hong Kong Law?

131.  The presumption is rational, fair and sensible in relation to an encroachment on other land, also owned by the same landlord.  The estoppel basis in those circumstances is compelling and a prima facie presumption in favour of the landlord is a proportionate complement to the landlord's rights of ownership and the grant of the tenancy, which have together provided the lawful opportunity for the tenant to be present on that land so as to be able to encroach on the other unrented land. The presumption in that scenario is a just solution.

132.  In terms of risk-analysis, the presumption in relation to third parties, which operates in favour of the landlord, appears to give the landlord a windfall for little or no effort or anxiety.  The tenant exposes himself to the tort of trespass and mesne profits.  The landlord has no liability for the encroachment, even if he has assented to or acquiesced in the trespass by his tenant onto the third party's land.  Throughout the entire period of trespass (12, 20 or 60 years depending on the date of the trespass and whether it is over Government land: ss 7(1) and 38A Limitation Ord) the tenant is presumptively annexing the encroached land for the landlord.  At the effluxion of the necessary number of years of continuous adverse possession by the tenant, it is the landlord who is the beneficiary of the consummated trespass, and who by operation of law extinguishes the former ownership and becomes by dint of very little the new title owner.  The landlord obtains all the benefit and has taken none of the risk: the tenant obtains no benefit and has taken all of the risk. This scenario is conceptually and pragmatically distinguishable from an encroachment onto other land owned by the landlord. In the former situation the landlord has evinced no conduct to unsettle his own lawful right of property so it is presumptively maintained; in the second, the landlord is as much a stranger to the lawful rights of the real owner as is the tenant. No issue of the possible displacement of the landlord's pre-existing property rights exists.

133.  If I were realistically free to depart from the path-lighting of the settled English law, I would have held that the presumption did not apply in relation to the land of a third party and could only operate between the landlord and tenant and could not itself derogate from or impact upon the proprietary rights of the third party owner of land encroached upon. The rebuttable presumption of encroachment is on analysis the dynamic product of the passive estoppel arising out of the special contractual relationship between landlord and tenant.  It is confined in its effect to the imputed or ascribed result which arises upon the reversion of the landlord's own land at the determination of the tenancy. Notions of convenience and orderliness have in my judgment nothing to do with its diameter or rationale; it is all about a displaceable proprietary estoppel created by implied representation between landlord and tenant in relation to the landlord's owned land.

134.  In Hong Kong there is no binding authority on the issue.  Indeed, there has not been any previous consideration of the Kingsmill v Millard common law line of authority at all; although in Tam Mo Yin v Attorney General [1996] 1 HKC 379, Smirk was without contrary argument accepted as correct, in an orthodox case where interestingly the Government was landlord.

135.  In the present case, Counsel for the Defendants, has contended, but without any close argumentation, that Kingsmill v Millard should not be adopted, as here, in relation to third parties' land.  In ‘Limitation Periods' 1998, 3 ed, the author Andrew McGee at p216 refers to the encroachment presumption doctrine as “a somewhat difficult line of authority.”

136.  Any principled objection to the presumption though faces the formidable fact that in relation to third party land, as a concept it has a 150 year pedigree.  English common law has always been widely followed in Hong Kong as providing a developed corpus of landlord and tenant and real property law as there is a real premium in predictability and certainty in those intertwined areas of the common law.  In my judgment, the encroachment doctrine and the rebuttable presumption is a general principle of Hong Kong law, applying to the land of third parties as much as to that of other land of any landlord.

The Presumption is Rebutted

137.  I am well persuaded that the Defendants have rebutted the prima facie presumption by clear evidence, see paras [66], [79], [80], [83] and [84].  The most important evidence (which by itself is sufficient) relates to the Defendants' confrontation in August 1974 with the then landlord as to the 1^st tenancy agreement (at which his son, who subsequently entered the 2^nd and 3^rd tenancy agreements as landlord, was also present). 

138.  The substance and effect of that meeting, which was after 2 or 3 earlier meetings about the same subject, was that Mr Lam Cheung Sing wholly disclaimed any interest, right or entitlement to the encroachments.  He positively washed his hands of the whole issue.  Although his motive may well have been based on a reluctance to become embroiled in downstream messy issues relating to the encroachments, he did assuredly inform the Defendants that “they were on their own” in all respects pertaining to the encroachments.  He did not claim the encroachments, he expressly disclaimed them : he disassociated himself from any interest in the encroachment.  He had no wish or intention to annex the encroachments to his land; nothing could have been further from his mind.  He certainly did not countenance the Defendants' actions which he plainly saw as being problematic and troublesome.  By conduct and by words he unequivocally let the Defendants deal with the encroachments as a matter for their own exclusive benefit and risk.  This case is much stronger than the facts in Doe d Baddeley v Massey (1851) 17 QB 373, where the presumption was held to be rebutted.

139.  In Stackhouse v Wade (1950) 26 MPR 312, 317-319 Richards CJ of the New Brunswick Supreme Court concluded that the presumption may be rebutted where a lease is renewed and the landlord does not include the encroachment in the new lease.  That is in accordance with Attorney General v Tomline (1880) 15 ChD 150 (CA) where the same issue arose.  That is also what happened in the present case.  In the 3 agreements to lease the same piece of land was let from 1974-2004; the encroachments were not included in the 2^nd and third agreements to lease.  This is separately other evidence that also rebutted the presumption that the landlord was annexing the trespassed land to his own title.  See also ‘Foa's General Law of Landlord and Tenant', 8^th ed, p712-3.

Specificity in a Prayer: Pleading a Declaration

140.  O18 r18(a) RHC provides that a counterclaim shall be considered as a statement of claim under O18 r 15(1).  An issue was properly raised by Counsel for the Plaintiffs, as to whether, by the modified Declaration now advanced by the Defendants, the Defendants' case meant that the Court could only grant “specifically the relief or remedy…claimed” and therefore precluded any Declaration as to a lesser amount of land, if the findings of fact would support such a conclusion.  He relied upon 2 decisions of the English Court of Appeal decided within 6 weeks of each other: Harrison-Broadley v Smith [1964] 1 WLR 465 (Harman, Pearson and Davies LJJ) and Biss v Smallburgh Rural DistrictCouncil [1965] 1 Ch 335 (Harman, Davies and Russell LJJ).

141.  In Harrison-Broadley the Court concluded that a Declaration could be granted although such relief had not been asked for in the statement of claim.  That was a case where injunctions only were sought, which the Court of Appeal would not grant.  But the Court held it was not hamstrung by the omission and Harman LJ said at 466 that the approach in Hulton vHulton [1916] 2 KB 642, 656 to the equivalent of O18 r 15 (1) RHC entitled the Court “to grant declaratory relief if that be the right thing to do”; see also Davies LJ at 471.  However Pearson LJ at 469 was slightly more circumspect, considering it unnecessary to decide what “the strictly correct practice should be, because it is perfectly plain that this court ought to make some declaratory order”, even though none had been pleaded.

142.  In Biss, which was a claim for a Declaration that 35 acres of land was an “existing site” under the Caravans Sites and Control of Development Act 1960 [UK], the trial Judge decided that a small area only had been established.  By a cross-appeal, the Plaintiffs sought to contend that a larger area of the site should be the subject of a Declaration in their favour.  Harman LJ did not accept that the Plaintiffs could, without an amendment of the pleadings, seek a Declaration in terms different to that sought at trial.  At p361, he emphasised that relief had to be specifically claimed and stated “a Plaintiff ought not to be allowed to ask the Court to make a Declaration covering whatever area the Court shall after an inquiry conclude ought to be counted…”.  He deprecated the Plaintiff's approach on appeal which he said “was conducted after the manner of a Dutch auction where the auctioneer starts at the top price and comes gradually down till he finds a bidder.  So here various lines of demarcation were suggested, coming down at last to about three acres round the house, and we were treated to a minute review of the evidence…”. 

143.  By contrast, Davies LJ at 369G more sympathetically and realistically stated

“Had the evidence proved that the Plaintiffs were entitled to something less than their full claim, it would, I think, have been unfortunate if their failure to make, either originally or by amendment, the appropriate alternative claim should have deprived them of their right to a Declaration.  But this question does not in the event arise.” 

144.  It is apparent that the astringent comments of Harman LJ were obiter as the Court found no relief in terms of the proposed Declaration was available.  Further, the observations were made in circumstances where no amendment of the pleadings had been made c.f. the present case, where 5 alternative prayers as to the terms of the Declaration sought exist.

145.  The starting point for consideration is s16(2) High Court Ord Cap 4 which provides that the High Court “…shall so exercise its jurisdiction in every cause or matter before it as to secure that, as far as possible, all matters in dispute between the parties are completely and finally determined…”.  The fact that a Declaration is not specifically sought in the prayer for relief does not prevent one being granted: O15 r16 and O18 r15(1), Hulton v Hulton [1916] 2 KB 642, affirmed [1917] 1 KB 813 (CA), Loudon v Ryder (No 2) [1953] Ch 423, 429 (itself curiously a decision of Harman J) and Harrison-Broadley v Smith [1964] 1 WLR 456 (CA).  It cannot be overlooked that, in an adverse possession case, the pleaded factual issues may permit of several possible variations and permutations as to the edges or boundaries of the disputed land at the material time.  It would be unnecessarily demanding to require the party to plead in the prayer every precise possible variation of the underlying factual dispute that could be ultimately found to be proved.  It would be like pleading all the results of the peeling of an onion - in which every single layer generates a slightly different and smaller variation of the one before it.  The real test is whether there is genuine prejudice caused by this ambulatory approach.  Here there was none.  It will always be a matter of degree; but the Court should not indulge pedantry as being the same thing as prejudice.

146.  It was objected that without absolute precision in the prayer the Plaintiffs did not know what they were facing and it was further contended that the Court would in effect be involved in an action to ascertain boundaries as in Spike v Harding (1878) 7 Ch 871.  I cannot agree with this submission.  The pleadings set out material facts and legal consequences which are sought to be drawn from those facts.  A party is not precluded at the trial from asking the Court to draw different legal consequences from the pleaded facts.  We are no longer “back in the bad old days” when pleadings had to state the precise legal result: In re Vandervell's Trusts (No 2), White vVandervell Trustees Ltd [1974] 1 Ch 269, 321G per Lord Denning MR.

147.  In Zamir & Woolf, ‘The Declaratory Judgment', 3^rd ed p284, the authors conclude that the obiter remarks of Harman LJ in Biss should not now be regarded as of general application.  I agree as the emphasis in Biss was too austere.  Biss is also incompatible with the catechism in 16(2) High Court Ord.  Both O15 r16 and O18 r15(1) should now be viewed against that imperative.  The authors also state

“In practice it frequently happens that it is only after the court has determined the facts that it will be possible to decide in what terms a declaration should be granted.  As long as the parties are given an opportunity to address the court on any proposed declaration it is highly desirable that it should retain as wide a discretion as possible as to the precise terms in which a declaration is granted.”

148.  These pragmatic considerations correctly represent the proper approach in Hong Kong.  The position under Australian law, P W Young, ‘Declaratory Orders', 2^nd ed p54, p188; Canadian law, Lazar Sarna, ‘The Law of Declaratory Judgments', 2^nd ed p84 and New Zealand law, is to the same effect: Manga vAttorney-General [2000] 2 NZLR 65, 84.

Gratitude of Court

149.  I am sure Mr Lam will not begrudge the Court extending its considerable thanks to Mr Andrew Mak for the careful, thorough and well-researched arguments he skilfully presented and also for the wealth of comparative caselaw he placed before the Court in relation to the novel issues that have fallen for decision.

Disposition

150.  The 4^th and 5^th Plaintiffs case for trespass succeeds only in relation to the whole of Lot 136 SB ss1 (the rented land).  No aggravated or exemplary damages are established.  All questions of injunctive and other relief, including mesne profits are adjourned pending a further hearing.  The 1^st, 2^nd and 3^rd Plaintiffs fail in all respects.

151.  The Defendants' counterclaim to the disputed land succeeds in relation to the whole of Lot 137 SA RP (which is D-E-F-G-H-I-Z-Q-D), and those portions of Lot 137 SA ss3, ss4 and ss5 that are within A-B-C-Q-D-E-F-G-H-I-A: the co-ordinates being those found in the Plan at para [6] herein.

152.  The Plaintiffs' counterclaim to the Defendants' counterclaim (above), see para [15] herein, is adjourned to an early date to be fixed, before this Court.  An amicus curiae will be appointed by the Registrar in the trial of the counterclaim to counterclaim.  The parties are to inform the Secretary for Justice of these proceedings with a view to inviting the Secretary for Justice to appear as an Intervener in the counterclaim to counterclaim.  The costs of the trial of the counterclaim to the counterclaim to be in the cause. 

153.  No costs order nisi of the trial to date is made.  The parties are to fix a date to appear to argue what Orders should be made to give effect to this judgment and as to the issue of costs and any necessary directions.  Directions will be given requiring the parties to provide detailed skeleton arguments on all such issues well in advance of the hearing date for these matters; that hearing estimated to take 2 hours.

HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

____________

____________

Before: Mr Recorder McCoy, SC, in Court

____________________________

FOURTH   RULING

____________________________

1.  This is yet another ruling in this contested case of adverse possession.  The Defendants applied on the 5^th day of trial to re-re-amend their defence and counterclaim.  Essentially what is sought is to take a more flexible position as to the area claimed, than that previously adopted.

2.  At the start of the trial, the Defendants narrowed themselves down to one fixed area, that was then amended by an application for an alternative area.  Now there is an application to vary the original area by overtaking the document known as Plan V, and substituting it with a new Plan V(a), and adding an alternative prayer that the court give judgment essentially for such portion of adversarily possessed title, as it may find to be established on all the evidence.  This is opposed by the Plaintiffs on the grounds, inter-alia, that is too late, that the preparation of their case had followed the contours of the original pleading and that they will be prejudiced.

3.  Mr Lam for the Defendants is correct in identifying that the disputes in this trial are as to (a) the period of which the Defendants have occupied certain portions of land and; (b) the area of that land.  In short, the issues are time and size.  To that extent, that has always been at the forefront of the Defendants’ case and must have been staring at the Plaintiffs since this action was filed in 2003.

4.  But Mr Mak is right to complain that this is yet another almost tiresome change in the Defendants’ case.  However, whether wearisome or not, the test is whether it is prejudicial and is uncompensatable.  Mr Mak, in addition, observes that the new Plan V(a) put forward is by a surveyor other than the Plaintiffs’ one, because, hitherto, the defence had adopted the Plaintiffs’ own configuration and coordinates as being the configuration and coordinates which would be used by both sides.

5.  The introduction of a new surveyor’s map by the Defendants raises the spectre that the coordinates which have not been in dispute hitherto may now fall back into dispute.

6.  Mr Mak also takes umbrage at what is called note II to Plan V(a), which states that the surveyor had been informed by the 2^nd Defendant on 25 August 2006 of the various coordinates which have now been asserted in Plan V(a).  Mr Mak says, that this is an attempt to adduce evidence or material by the backdoor which had not come in by the frontdoor at the appropriate time of the trial.  Note II is not, in itself, to be regarded as evidence.

7.  It is, of course, a truism that unless the Defendants had engaged the surveyor in the 70’s, 80’s or 90’s, they would never have been any accurate measurements of the area of the disputed land.  The task that faces me now, includes to identify exactly by some coordinates what that land may be, if it is proven that the Defendants have a viable claim to some of it.

8.  Almost with greater reluctance than before, I am going to allow the amendment.  It might in itself generate other issues, and I am now going to seek confirmation from Mr Lam as to whether, in fact, it is agreed that the coordinates A, B, C, etc set out in Plan V(a) under the hand of Andrew Lau & Associates Ltd are formally agreed as being identical to those set out by the Plaintiffs’ solicitors, Henry Chan Surveyors Ltd.  If they prove not to be, then on the face of it, the Plaintiffs will have good grounds for an application, for an adjournment.

9.  I am going to allow the amendment, I squeeze again all question of costs back to the end of the trial, but those piling up on one side must by now be significant I would have thought.

HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

____________

____________

Before: Mr Recorder McCoy, SC, in Court

______________________

THIRD   RULING

______________________

1.  This is the second ruling on the 5^th day of this civil trial in relation to adverse possession.  For the context I refer to the two earlier rulings I have given.

2.  The Plaintiffs wish to recall an expert, Mr Henry Chan, a registered surveyor, to give evidence in relation to certain plans which had become prominent in the course of this trial.  There are three plans ultimately in issue.

3.  The first by date is 30 March 1998 and is found at E5 in the bundle; that is within the Defendant’s bundle.  It is a signed plan approved by Leung Sau Tsang, authorized Land Surveyor at the scale of 1 to 400.  The person who commissioned the plan is the 4^th Plaintiff in the case, and he has given oral evidence that there are shortcomings or errors in the plan but this was neither cross-examined or examined about to elicit what those shortcomings may or may not have been.

4.  The second plan in point of time is dated 12 April 2002.  This is found amongst the trial documents in bundle C143, a plan prepared by Andrew Lau and Associates (China) Limited for the Defendants and this showed the relevant area at the scale of 1 to 150.

5.  The third plan is dated 25 March 2003 and that is in bundle A8 prepared by Henry Chan, the expert whose further evidence is being objected to.  Mr Chan in the course of his oral evidence compared A8 with C143 and reached the conclusion that the fence line zones were in a different place.

6.  Subsequent to that on the application of Mr Simon Lam for the Defendant, I did allow the 2^nd Defendant, Mr Li Wai Kin, to be recalled to give further evidence to explain his position in relation to the fence.  He said that after the original fence had been knocked down by other persons (and that incident is the subject of a separate proceeding) there was a need to restore the fence, but he could not do so because the land was badly cut up.  He therefore erected a temporary two or three-wire casual fence structure, one metre approximately in from the previous boundary.  His evidence was that the earlier boundary where the fence had been knocked down was delineated by the line A to B on plan A8.

7.  Mr Andrew Lau when he surveyed in terms of plan C143, drew the boundary line delineated by the fence, and photographic evidence which has been adduced suggests at that time the temporary fence structure was in place.

8.  Mr Andrew Mak for the Plaintiffs now wishes to recall Mr Henry Chan only in relation to the temporary fence and he wishes the expert surveyor to give comparative evidence to show or give assistance to the Court as to whether the line delineated in A8, C143 and E5 are the same and if not, why not.

9.  In my view, this evidence is relevant and is admissible and arises out of the evidence of Mr Li.  Mr Lam may cross-examined in relation to it.  There has been in this case an evidential sprawl.  This is evidence being called almost at the stage when we were trying to enter the phase of closing submission.

10.  In my view, it properly arises out of the matter for which the Defendants were earlier given leave to call the 2^nd Defendant.  It is a narrow and confined point; I will allow it.  There has to be some closure in this case to the evidence but I am going to allow it as a matter that is admissible; the weight to be decided.  I bear in mind that the Plaintiffs own witness, the 4^th Plaintiff, specifically said in evidence that the map E5 is defective.  As I said earlier at this stage of the evidence just why that may be exactly the type of matter that Mr Lam would cross-examine Mr Chan on, because Mr Lam in his submission, which was well-structured, said Mr Chan will be asked to compare something that is not valid namely E5, with something that is a surely valid, namely C143.  In all the circumstances, I am applying a generous approach in the interest of justice to both parties.  I am going to allow this evidence to be called.

HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

____________

____________

Before: Mr Recorder McCoy, SC, in Court

______________________

SECOND   RULING

______________________

1.  This is the fifth day of a civil action involving a claim for adverse possession.  Counsel over the weekend have prepared detailed written closing submissions which were about to be delivered when counsel for the Defendants indicated that he now wishes to recall a factual witness namely the 2^nd Defendant, who is partly in possession of the land subject of the trial dispute.

2.  I refer to my earlier ruling which set out some of the background to this matter.  It involves a complicated claim to a reasonably small area of land intersected by about 6 different lots (including Government land) and some 5 or 6 different ownerships.  The issue that has now arisen, follows from the fact that a witness for the Plaintiffs, an expert surveyor, has produced a very detailed and timely survey report which indicates that the survey area he investigated is materially different to the extent of 1 metre in width, from that depicted by the Defendants’ surveyor, in C143 of the court papers.

3.  The Plaintiffs’ surveyor in his earlier oral evidence added that it would appear that the boundary had spread by 1 metre between the scheme depicted in C143 and the scheme depicted by the Plaintiff’s surveyor at page 8 of bundle A.  Mr Lam wishes to recall the 2^nd Defendant, not to challenge the fact that the boundary is different, but to explain why it is different.  I have read the proposed witness statement of the 2^nd Defendant whose evidence in short is that the original fence had been pulled down and destroyed (by others) and the rest of his evidence is to the effect that there was a need therefore to reinstate a new fence along the same line where the original fence had been installed.  Before he could do that, he had put up a temporary fence because along the original fence line the soil had become too loose for poles to support the fence, so he inserted the poles temporarily in a nearby position inside the original fence line, which would support them.

4.  The evidence goes on to show that the surveyor who prepared plan C143 took colour photographs showing the temporary wire fence in some stages of erection with some length of wire being evident on it.  Most unfortunately these photographs had not hitherto being discovered to the Plaintiff.  Mr Mak for the Plaintiffs objects, making the point that it is extremely late in the place.  He indicates that he may have to have his surveyor who prepared plan A8 present to hear what the 2^nd Defendant is going to say.  He criticises that the photographs had not being produced and discovered earlier, but he realistically accepts that the issue raised is relevant to the generality of the case, observing that the position of the fence on the Defendants’ case has always been fluid, as the Plaintiffs’ case has been that the Defendants had actually been involved in moving or creeping the fence out, over time.

5.  Mr Mak argues that he may have to call evidence about soil profile and whether the land had been disturbed and possibly even some formal metallurgical evidence to look for contact between soil and metal posts.  I do really wonder whether that will be necessary or even useful as the case involves such a small piece of land and this limited issue involves a short period of time in April 2002.  However, he has a further and sustained objection, he says that the way this case has developed (and I do again refer to my earlier ruling) is not really just an ordinary application for adverse possession but has become in terms of former Chancery practice, an action to settle a boundary, without any of the proper procedures having been observed.

6.  Mr Mak made observations on the belated introduction of plan 4 which was superseded by a plan 4A on the first day of the trial and the new plan 5 which only came into existence on the 4^th day of the trial.

7.  Mr Mak argues that the Defendants have already been given some more time and that the trial is now only between those two plans, 4A and 5.  He continued that this is no prayer by the Defendants for the court to award any area of land as the evidence might ultimately demonstrate that has been adversely possessed.  I certainly am not going to rule now on the correctness or otherwise of that issue which would involve close analysis of law as to the nature and width of the Defendants’ prayer, which is proving to be as fluid as the fence line in this case. 

8.  Mr Lam says that he was taken by surprise.  This is not the first surprise in this case.  He says he has no expectation that there would be an argument based on the 2002 temporary fence structure, albeit I have to say that to anybody at a visual approach the plan ABC etc in page A8 has fence lines there that appear to be different from those in C143.  At the end of the day, the point that finally persuades me reluctantly to allow this evidence to be called is because the Defendant is ultimately not challenging the Plaintiffs’ evidence, but is seeking to give further factual evidence to explain it.  I must at this stage say this has increasingly become a theme of this case.  I have been concerned on a number of occasions and had observed that the Defendants may not have cross examined in terms of the well known rule in Browne v.  Dunne in relation to certain factual matters.  Here Mr Lam says this matter has arisen ex improviso and was not a matter where any fault can lie on the Defendants’ side.

9.  Without deciding that issue right now I simply conclude by saying I am willing to allow this evidence to go forward.  I will have to deal with the Plaintiffs’ position in reply if it is still finally to be maintained that evidence may have to be called by the Plaintiffs.  I do doubt whether the Plaintiffs can realistically call any evidence to contradict this as it seems to me to be a matter limited by its own context.  To this extent, the central issue is whether the Defendants had already had 20 years of settled possession in respect of some of the ground.  Subject to the Plaintiffs’ argument in law and fact, the issue in which the supplemental witness statement has sought to address relates to only 2002 whereas the Defendants’ case is from 1974 at the earliest or 1977 at the latest adverse possession had continuously existed for 20 years.

10.  Nevertheless, I am prepared to allow the new evidence as an indulgence.  It may prove to have costs implications.  But I should simply put that costs issue back to the end of the trial.  I will have to decide any application by the Plaintiffs to adjourn or call other evidence.

11.  Any consequence of either of these scenarios may further delay the case and it may cause the case to be fractionated and reduce the possibility of it being concluded within the remaining day and a part that we still have.  I shall have to deal with any of those issues at an appropriate time.  So Mr Lam you are being permitted to call this evidence and I reserve any issues of costs, I would deal with costs at the end of the trial.

HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

____________

____________

                 HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

_____________________

Before : Hon Sakhrani J in Chambers

_____________________

JUDGMENT

_____________________

1. This is the adjourned pre-trial review of this action.  The plaintiffs apply by summons to strike out the defence and counterclaim of the defendants and ask for judgment. 

2. The plaintiffs are the registered owners of what have been described as “the Trespassed Land” in the statement of claim namely, the following lots of land all in Demarcation District 185, Shatin, New Territories :

(a) Lot No. 137 section A, sub-section 3;

(b) Lot No. 137 section A, sub-section 4;

(c) Lot No. 137 section A, sub-section 5;

(d) Lot No. 137 section B, sub-section 1; and

(e) Lot No. 137 Remaining Portion of section A.

3. The plaintiffs’ case is that the defendants have been trespassing on the Trespassed Land since in or about 1990.  It is pleaded in para. 16 of the statement of claim that in or about 1990 without the consent or approval of the plaintiffs, the defendants began to grow plants and trees in the portion of land coloured pink and depicted as ABCDEFGHI on the plan annexed to the statement of claim.

4. The defendants admit that they have been trespassers but their case is that their trespass took place from 1974.  They plead in para. 11 of the defence and counterclaim that without the prior consent or approval and intentionally to the exclusion of any person including the plaintiffs, they in 1974 began to grow plants and trees in the area coloured pink in the Plan III annexed to the defence and counterclaim which was extended in or about 1997 to the areas as depicted as ABCKJ on the plan referred to in the statement of claim.  The defendants also aver that in 1974 they built certain wire fence and gate around the area coloured pink in the Plan III annexed to the defence and counterclaim which in 1977 was extended to the area as depicted as ABCKJ in the plan referred to in the statement of claim. 

5. There is no dispute that the only defence relied on by the defendants is that the plaintiffs’ claim is statute-barred by reason of adverse possession on the part of the defendants and the counterclaim for the declaratory relief is on the same basis.

6. In view of the decision of the Court of Appeal in Chan Tin Shi v. Li Tin Sung & Ors [2005] 1 HKC 1, the defence and counterclaim is unsustainable and bound to fail.  It was decided by the Court of Appeal that the effect of the New Territories Leases (Extension) Ordinance, Cap. 150 was to create a new estate.  That being so, the fact that a squatter’s right may have been acquired would not affect the new lease which took effect either on the coming into operation of the New Territories Leases (Extension) Ordinance or upon expiry of the old lease in June 1997.  That decision is really determinative of this action.  Even assuming that the facts as asserted by the defendants are established, the defendants have no sustainable defence and counterclaim on the law as presently determined by the Court of Appeal in Chan Tin Shi. 

7. However, Chan Tin Shi is a decision that will be determined by the Court of Final Appeal.  I am told that the matter has been set down for hearing in November this year.  The question to be determined by the Court of Final Appeal is one of great general and public importance.  The question formulated by the Court of Appeal in their judgment dated 27 January 2005 in Chan Tin Shi is as follows :

“Whether the effect of Section 6 of the New Territories Leases (Extension) Ordinance Cap. 150 was to create a new estate in respect of government leases (save those excepted or excluded under that Ordinance), so that any person in adverse possession of the land cannot rely under the Limitation Ordinance Cap. 347 on possession prior to :
	(a)	25 April 1988; or
	(b)	30 June 1997,
	those being alternate dates which might possibly be argued as being relevant.”

8. Mr. Ngai submitted that the court should adjourn the plaintiffs’ summons to strike out the defence and counterclaim pending the outcome of the Court of Final Appeal’s decision in Chan Tin Shi. 

9. Mr. Ngai also relied on the decision in Derby & Co Ltd v. Weldon (No. 3) [1989] 3 All ER 118 for the proposition that the court in exercising its discretion whether to strike out the claim is not bound to apply the law as so stated by the Court of Appeal and is entitled to take into account the possibility that the decision may be reversed.  That case, however, provides, in my view, no assistance to the defendants and is clearly distinguishable.  It is clear from the judgment of Vinelott J at page 127 that amendments would be made to the statement of claim by adding additional and overlapping claims to the claim for the tort of conspiracy.  The striking out and deletion of the conspiracy claim would not significantly alter the course of the trial as the same or substantially the same facts would have to be investigated in relation to the other heads of claims.  In those circumstances, it is not surprising that Vinelott J decided not to strike out the claim for conspiracy.  That is of no assistance to the defendants.

10. I accept that I have discretion in the matter as to whether to adjourn the plaintiffs’ application or to deal with it now.  As I mentioned at the start, this is the adjourned pre-trial review.  The trial has been set down for hearing in July.  The appeal to the Court of Final Appeal will not be heard until November.  There is a possibility that the Court of Final Appeal will reverse the decision of the Court of Appeal.  There is also a possibility that the Court of Final Appeal will uphold the decision of the Court of Appeal.  In that event, if the matter is adjourned it seems to me that the plaintiffs would be unduly prejudiced.  Not only will they have to await the outcome of the decision in Chan Tin Shi but if the Court of Final Appeal did uphold the decision of the Court of Appeal, they may have to wait many months thereafter to obtain a hearing of their application.  That delay, in my view, would be unduly prejudicial to the plaintiffs.  They are entitled, in my view, to have the matter determined on the law as it presently stands.

11. In Hong Kong Ferry (Holdings) Co Ltd v. Chan Kwan Fat & Ors [1995] 1 HKC 542, the Court of Appeal was dealing with the situation where there was a pending appeal to the Privy Council on the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap. 152.  The court there held that since there was a pending application for leave to the Privy Council, the correct course was to dismiss the appeal that they were dealing with but to stay execution of the order made below until after the determination of the application for leave to appeal to the Privy Council and further staying such execution, if that application was successful, until after the determination of the appeal to the Privy Council in that case.

12. That course was also adopted by Le Pichon J (as she then was) in Kung Wong Sau Hin & Anor v. Sze To Chun Keung & Ors [1996] 2 HKC 616 where she was also dealing with the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap. 152.  She was dealing with an application to strike out the defence which she struck out as the defence was bound to fail on the law then in force.  However, she also ordered that the execution of the order for possession should be stayed until after the determination of the appeal in the Privy Council case.

13. More recently in Hong Kong Kam Lan Koon Limited v. Realray Investment Limited, HCA 15824 of 1999, by his ruling dated 30 March 2005 Lam J also refused an adjournment pending appeal to the Court of Final Appeal in Chan Tin Shi and dealt with the O.14A application before him and ordered a stay of execution. 

14. As I have said, there is a possibility that the Court of Final Appeal may reverse the decision of the Court of Appeal.  I am satisfied that I should not make an order at this stage which may prejudice the position of the defendants should that event occur.  Nevertheless, it seems to me that I ought to deal with the application to strike out and not adjourn the summons because the plaintiffs are entitled to have the matter determined on the law as it presently stands.  It seems to me that the prejudice to the plaintiffs far outweighs the prejudice to the defendants if the matter were adjourned.  It seems to me that in the interests of justice the matter ought to be dealt with by my dealing with the application to strike out.  There really is no answer to the summons to strike out, so I will strike out the defence and counterclaim and give judgment to the plaintiffs but it seems to me to be right to grant a stay of execution to the defendants so that their position is not prejudiced in the event the Court of Final Appeal reverses the decision of the Court of Appeal.  That is the order I make and I will hear the parties on the formal order that I should make.