LEUNG CHI CHEONG (the person appointed to represent the estate of LEUNG FAI, deceased) v. LIU CHE WUN AND ANOTHER

HCA 1128/2007

[2025] HKCFI 367

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1128 OF 2007

________________________

________________________

________________________

DECISION ON COSTS

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A.  INTRODUCTION

1.  In this Decision on Costs, unless otherwise stated, I shall adopt the abbreviations used in the Judgment of this court dated 2 September 2024 (“Re-hearing Judgment”).

2.  By the Judgment dated 20 August 2021, ie [2021] HKCFI 2435 (“Judgment”), this court found in favour of the 1^st defendant’s primary case on adverse possession and dismissed the plaintiff’s claim against the 1^st defendant.  No determinations were made on the other causes of action advanced by the 1^st defendant.

3.  On appeal by the plaintiff as the personal representative of the Estate of his father, the Deceased, and by a Judgment dated 6 September 2022 (“Appeal Judgment”), the Court of Appeal allowed the appeal, set aside the orders made in the Judgment, and ordered that the remaining outstanding issues of (a)  constructive trust and/or proprietary estoppel; and (b)  the 1^st defendant’s entitlement under the IPFDO be remitted to this court for determination.

4.  On costs, the Court of Appeal ordered that:

“71. There will be an order nisi that the plaintiff’s costs of the appeal be borne by the 1^st defendant to be taxed if not agreed. The costs below be reserved to the Judge upon the determination of the outstanding issues.”

5.  Following a re-hearing on 9 January 2024 and by the Re-hearing Judgment, this court found in favour of the 1^st defendant on all the remaining outstanding issues.  At §72 of the Re-hearing Judgment, this court made the costs order as follows (the “Costs Order Nisi”):

“72. I order that the costs relating to the determination of the issues set out at paragraph 3 above (including all costs reserved, if any)  be paid by the plaintiff to the 1^st defendant, such costs are to be taxed if not agreed. The plaintiff’s and the 1^st defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations.”

6.  The parties agree that the Costs Order Nisi deals with both costs of the re-hearing on 9 January 2024 as well as costs of the action reserved by the Court of Appeal, ie all costs incurred before this court.

7.  By Summons dated 20 September 2024 (the “Summons”), the plaintiff seeks, inter alia, to vary the Costs Order Nisi as follows:

(1)  The costs of the hearing on 9 January 2024 relating to the determination of the issues in paragraph 3 of the Re-hearing Judgment be paid by the plaintiff to the 1^st defendant, to be taxed if not agreed;

(2)  Save as provided in paragraph (1)  above, the plaintiff do pay the 1^st defendant 40% of her costs of this action, including the trial from 11 to 13, on 16 November 2020, from 7 to 8 December 2020 and on 10 February 2021 (including all costs reserved, if any), to be taxed if not agreed;

(3)  Save as provided in paragraph (1)  above, the 1^st defendant do pay the plaintiff 60% of his costs of this action, including the trial from 11 to 13, on 16 November 2020, from 7 to 8 December 2020 and on 10 February 2021 (including all costs reserved, if any), to be taxed if not agreed;

(4)  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations; and

(5)  The 1^st defendant’s own costs be taxed in accordance with the Legal Aid Regulations.

8.  By Consent Summons dated 16 October 2024, the parties agreed that the application under the Summons be disposed of on paper.

B.  BACKGROUND

9.  The material facts of this case have been set out at §§1 to 16 of the Judgment and at §§4 to 20 of the Re-hearing Judgment.

10.  For present purposes, the following procedural background of these proceedings is most relevant:

(1)  On 10 September 1992, in HCA 6145/1992, Birkenhead commenced proceedings against the Deceased for, inter alia, possession of a large piece of land including the Land.  The Deceased counterclaimed for possessory title thereto on the ground of adverse possession;[1]

(2)  In 2001, the 1^st defendant applied to be joined as a party in the 1992 Action on the ground that she also had interest in the Land, but in 2009 withdrew her application thinking that the Deceased’s said claim would protect her interest and status relating to the Land;[2]

(3)  On 2 February 2011, after the Deceased’s passing, the Deceased’s counterclaim in the 1992 Action partially succeeded when the court held that he had acquired good possessory title of the Land through adverse possession against Birkenhead;[3]

(4)  Separately, in the current action, the 1^st defendant’s initial pleaded case referred to joint ownership of the Land by the 1^st defendant and the Deceased through adverse possession as joint tenants, with the 1^st defendant later becoming the only person entitled to a good possessory title after the Deceased’s passing via the right of survivorship;

(5)  On 8 December 2020, after the parties had lodged their respective Closing Submissions, the 1^st defendant lodged a note stating that she was not pursuing the right of survivorship argument in its joint adverse possessors claim;

(6)  On 9 December 2020, the 1^st defendant filed and served her Re-Re-Amended Defence and Counterclaim with deletions making clear that her adverse possession claim is based on the 1^st defendant and the Deceased being tenants in common; and

(7)  On 3 February 2021, the 1^st defendant filed and served her Supplemental Closing Submissions on her amended case.

11.  In gist, the plaintiff’s application to vary the Costs Order Nisi is based on three grounds:

(1)  The 1^st defendant abandoned its argument on adverse possession as joint tenants at a very late stage of the action, wasting time and costs;

(2)  The 1^st defendant’s claim that she had possessory title of the Land being an adverse possessor with the Deceased as tenants in common was ultimately rejected on appeal; and

(3)  The 1^st defendant’s withdrawal of its joinder application to the 1992 Action necessitated the plaintiff to come before the court to twice prove how the Land was occupied since 1980, when the subject in dispute could have been dealt with in one go during the 1992 Action.

12.  On the other hand, the 1^st defendant contends that the Costs Order Nisi should be made absolute for the following reasons:

(1)  Although the 1^st defendant’s claim of adverse possession as tenants in common was defeated on appeal, the 1^st defendant nevertheless remains the overall winning party following the Re-hearing Judgment which dismissed all of the plaintiff’s claims, costs should therefore follow the event;

(2)  The evidence prepared and adduced at trial are relevant and necessary to all causes of action, such that one cannot single out any part relating only to the 1^st defendant’s withdrawn or rejected claims, such costs are, in any event, minimal;

(3)  Further, the 1^st defendant’s rejected claim is only an alternative cause of action for the same relief, and not an issue so distinct and separate in itself that the decision thereof constitutes an “event” of its own; and

(4)  The 1^st defendant’s withdrawal of her joinder application to the 1992 Action is irrelevant as it had been dealt with by the Judgment and no adverse comments had been made by this court.

C.  RELEVANT LEGAL PRINCIPLES

13.  It is trite that the court has a wide discretion in matters relating to costs; it may order costs to follow the event or make some other order if the circumstances so justify: Order 62, rule 3(2), Rules of the High Court, Cap 4A (“RHC”).  In the exercise of its discretion, the court may take into account such factors under Order 62, rule 5, RHC:

“(1)  The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account—

(aa)  the underlying objectives set out in Order 1A, rule 1;

...

(e)  the conduct of all the parties;

(f)  whether a party has succeeded on part of his case, even if he has not been wholly successful;

...

(2)  For the purpose of paragraph (1)(e), the conduct of the parties includes—

(a)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b)  the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c)  whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and

(d)  conduct before, as well as during, the proceedings.”

14.  Further, it is an established principle that where a party who is overall successful in the outcome has raised issues or made allegations on which he fails that has caused a significant increase in the length or costs of the proceedings, he may be deprived of the whole or part of his costs.  See Re Elgindata Ltd (No.2) [1992] 1 WLR 1207 at p.1214:

“The principles are these. (i)  Costs are in the discretion of the court, (ii)  They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (iii)  The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs. (iv)  Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party's costs.” (Emphasis added)

15.  What amounts to an “issue or allegation” in the context of principle (iii)  of Elgindata, ibid, and Order 62 rule 5, RHC is to be widely construed.  The test set out in Seepersad v Persad [2004] UKPC 19, ie that an issue should be something so distinct and separate in itself that the decision of it constitutes an event, has been criticised for being too narrow after the Civil Justice Reform: Chan Shun Kei t/a Chan Shun Kei Construction Works v Hong Kong Construction (Hong Kong)  Ltd, CACV 192/2014 (unrep, 07/03/2016)  at §25.

16.  Moreover, as can be seen from the above, an order to deprive the successful party wholly or partly of his costs under principle (iii)  of Elgindata, supra is distinguished from an order for that party to pay the whole or a part of the unsuccessful party’s costs under principle (iv).  The latter requires that the overall successful party is shown to have raised issues or made allegations unreasonably or improperly: Chan Shun Kei, supra, at §§36-37; Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd [2005] 4 HKC 162 at §§10-11.

17.  Ultimately, the court will take an overall view of the justice of the case to arrive at a suitable order.  The court will not generally go into a minute examination of whether each issue, sub-issue or arguments therein have been argued successfully by the parties: Cathay Pacific Airways Ltd v Kwan Siu Wa Becky & Ors, FACV 5/2012, (unrep, 26/07/2013)  at §4.

D.  DISCUSSION

D1.  The 1^st defendant’s abandoned and/or rejected claims

18.  Applying the above principles, I see fit to deprive the 1^st defendant of a part of her costs pursuant to principle (iii)  of Elgindata, supra, for abandoning and/or failing on her claims based on adverse possession (ie her abandoned claim of adverse possession as joint tenants and her failed claim of adverse possession as tenants in common).

19.  First, for the purpose of applying principle (iii), I am satisfied that the 1^st defendant’s claims on adverse possession amount to independent issues.  I agree with the plaintiff that these claims, being fundamentally different in substance, are clearly discrete from the 1^st defendant’s other causes of action on constructive trust and/or proprietary estoppel, and the IPFDO.  Alternatively, they are so distinct and separate by themselves that a decision thereof constitutes an “event” of its own.

20.  Second, as the 1^st defendant’s failed claim on adverse possession as tenants in common was put forward as her primary case, it constituted a significant issue at trial.  On this basis, it must have warranted considerable attention and preparation from the parties.  I thus agree with the plaintiff that the costs of argument should be reflected in the costs order by a partial deprivation of the 1^st defendant’s costs despite her overall success in the outcome of the action.

21.  Having said that, when looking at the action as a whole, I find that the proportion of time and/or costs taken up by the 1^st defendant’s claims on adverse possession is not as significant as the plaintiff has put it.

22.  Indeed, the bulk of the 7-day trial was used to establish matters of general relevance.  Evidence was adduced on the relationship between the Deceased and the 1^st defendant as husband and wife, the circumstances surrounding the couple’s divorce, and the Deceased’s personality etc., all of which equally go to the 1^st defendant’s other causes of action.

23.  Importantly, the factual findings from the first trial were undisturbed by the Court of Appeal.[4] At §5 of the Re-hearing Judgment, I also noted that:

“5. In general, this court found in the Judgment that the 1^st defendant’s case was consistent from start to finish; her evidence is corroborated by an independent witness; and ultimately, her evidence regarding her joint management of the business carried out on the Land was accepted in its totality. On the other hand, the court rejected the plaintiff’s evidence in different sections on various issues in the Judgment for reasons stated therein.”[5]

24.  It is for this reason that I adopted the factual findings from the first trial in determining the remaining outstanding issues, and no further oral evidence was heard at the re-hearing.

25.  Therefore, while I take the plaintiff’s point that the 1^st defendant had, quite undesirably, abandoned her claim at a late stage of the action, I am not of the view that this case calls for a costs deprivation of an extent as drastic as what the plaintiff has suggested in his proposed varied costs order.

26.  Further, in respect of the position under principle (iv)  of Elgindata, supra, I do not see fit to make an order for the overall successful 1^st defendant to bear the whole or part of the overall unsuccessful plaintiff’s costs.  Given that the plaintiff has not in his submissions advanced any allegations or real reasons that the 1^st defendant had been unreasonable or improper in pursuing the said claims, I do not find that there are special circumstances justifying such an exceptional costs order.

D2.  The 1^st defendant’s withdrawal of her joinder application

27.  As to the 1^st defendant’s withdrawal of her joinder application to the 1992 Action, it is difficult to see how this is in any way relevant to the present Summons.

28.  First, at §9 of the Judgment, this court already addressed with no adverse comments the 1^st defendant’s act of withdrawal and her explanation for doing so.

29.  In addition, while the 1992 Action and the current action both pertain to the issue of title over the Land, I explained at §24 of the Judgment that in fact the two actions are each concerned with entirely different aspects of the same subject matter:

“As submitted by the 1^st defendant, single and joint possession can be exercised by several persons (usually in the context of a family situation). When more than one squatter has possession simultaneously, the title acquired is held by the squatters jointly...In those circumstances, vis-a-vis the outside world including the registered owner of the land, adverse possession is by one single and joint family unit. Each one of the possessors can defend the owner’s suit to recover possession. The 1992 Action is a contest between the Deceased and [Birkenhead] in the above context. The 1992 Action did not deal with, let alone resolve, any question of relationship among the joint possessors within the family or whether licences have been granted by one of the possessors to the others.” (Emphasis supplied)

30.  In other words, there is no overlapping of the issues in the two actions, and the Deceased had not expended any effort into arguing his position vis-à-vis the 1^st defendant in the 1992 Action.  I am therefore unconvinced by the plaintiff’s submission that there is any duplication of costs in this regard.

E.  CONCLUSION

31.  By reason of the foregoing, I order that the Costs Order Nisi be varied in the following manner:

(1)  The costs of the hearing on 9 January 2024 relating to the determination of the issues in paragraph 3 of the Re-hearing Judgment be paid by the plaintiff to the 1^st defendant, to be taxed if not agreed;

(2)  Save as provided in sub-paragraph (1)  above, the plaintiff do pay the 1^st defendant 70% of her costs of this action, including the trial from 11 to 13, on 16 November 2020, from 7 to 8 December 2020 and on 10 February 2021 (including all costs reserved, if any), to be taxed if not agreed;

(3)  The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations; and

(4)  The 1^st defendant’s own costs be taxed in accordance with the Legal Aid Regulations.

32.  Bearing in mind the outcome in paragraph 31 above, and that the 1^st defendant did not concede to any variation of the Costs Order Nisi, I further order that the costs of and occasioned by the Summons be paid forthwith by the 1^st defendant to the plaintiff, with the plaintiff’s and the 1^st defendant’s own costs be taxed in accordance with the Legal Aid Regulations.

Mr Tommy Lo, instructed by Messrs W K To & Co, for the plaintiff

Mr Erik Shum, instructed by Messrs Simon Cheng & Co, for the 1^st defendant

HCA 1128/2007

[2024] HKCFI 2181

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1128 OF 2007

________________________

________________________

________________________

J U D G M E N T

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A. INTRODUCTION

1.  The background of the case and the evidence adduced at the first trial have been set out in the Judgment of this court dated 20 August 2021, ie [2021] HKCFI 2435 (“Judgment”).  In the Judgment, this court granted the following order:

(1)  A declaration that the 1^st defendant has acquired a good possessory title to the Land by reason of her own adverse possession thereof since 1980.

(2)  A declaration that the plaintiff holds the possessory title to the Land (as declared in the 1992 Action)  on trust for the 1^st defendant and the estate of the Deceased as joint owners thereof as tenants in common in equal shares.

(3)  An account of all rental and/or other income received by the plaintiff and/or the estate in respect of the Land for half share for the period from early October 2009 until the time when the 1^st defendant could re-enter the Land, and payment of the same forthwith to the 1^st defendant.

(4)  The plaintiff’s claim against the 1^st defendant be dismissed.

2.  On appeal by the plaintiff as the personal representative of the estate (“Estate”)  of his father, Leung Fai (the “Deceased”), the Court of Appeal allowed the appeal, set aside the orders made in the Judgment and ordered that the remaining outstanding issues of (a)  constructive trust and/or proprietary estoppel; and (b)  the 1^st defendant’s entitlement under the Inheritance (Provision for Family and Dependents)Ordinance, Cap 481 (“IPFDO”)  be remitted to this court for determination. 

3.  The parties agree that the following issues are to be determined at the present hearing:

(1)  Whether the plaintiff holds the Land of the Deceased on constructive trust for the 1^st defendant.

(2)  What relief is to be granted to the 1^st defendant if the plaintiff holds the Land on constructive trust for the 1^st defendant.

(3)  Whether the plaintiff is estopped from denying that the 1^st defendant is entitled to beneficial interest in the Land.

(4)  What relief is to be granted to the 1^st defendant if the plaintiff is estopped from denying that the 1^st defendant is entitled to beneficial interest in the Land.

(5)  If it is found that the plaintiff does not hold the Land on trust for the 1^st defendant and that the Land is not subject to estoppel, whether the 1^st defendant is liable to pay damages and/or mesne profits for the 1^st defendant’s occupation of the Land and to account for profits to the plaintiff for the 1^st defendant’s business on the Land and the quantum thereof.

(6)  Whether leave should be granted to the 1^st defendant to apply for relief under the IPFDO out of time.

(7)  If it is found that leave should be granted for such application, whether any financial provision from the net estate of the Deceased ought to be granted to the 1^st defendant pursuant to the provisions of IPFDO.

(8)  If it is found that financial provision from the net estate of the Deceased ought to be granted to the 1^st defendant pursuant to the IPFDO, what should be the amount of such provision.

(9)  What is the amount of interest (if any)  to be payable upon any monetary judgment awarded against a party in this action.

B.  ESTABLISHED FACTS IN THE JUDGMENT WHICH SHOULD STAND

4.  The following facts are either undisputed and/or found by this court in the Judgment.  Such findings of fact have not been disturbed by the Court of Appeal[1].

5.  In general, this court found in the Judgment that the 1^st defendant’s case was consistent from start to finish; her evidence is corroborated by an independent witness; and ultimately, her evidence regarding her joint management of the business carried out on the Land was accepted in its totality[2].  On the other hand, the court rejected the plaintiff’s evidence in different sections on various issues in the Judgment for reasons stated therein.

B1.  Relationship between the Deceased and the 1^st defendant as true husband and wife (the “Couple”)

6.  As noted in the Judgment, it is undisputed between the parties that[3]:

(1)  The 1^st defendant moved to live in the house on the Land in 1980 when she was young and thereafter for about 20 years she continuously and single-handedly took care of the Deceased’s living and health until his death in 2000.

(2)  The Couple gave birth to a daughter in 1981.

(3)  After a period of co-habitation, the Couple got married in 1986.

(4)  Their long relationship as married Couple was known to the Deceased’s children and people around such as neighbours and business associates, for instance Mr Au Yeung (“DW2”).

(5)  The 1^st defendant helped operating the Deceased’s business of both fish rearing and car parking, which was again well known to others including DW2. 

(6)  The 1^st defendant made decisions concerning the said businesses when the Deceased was not around.

(7)  The Deceased showed love and care for the 1^st defendant expected of a husband in an ordinary marriage relationship which was demonstrated by the plaintiff’s testimony and evidence that:

(a)  The Deceased did not want to upset the 1^st defendant and therefore was absent from the plaintiff’s wedding ceremony.

(b)  In all the letters the Deceased wrote to Leung Chi Ming (“PW2”)  (evidence produced by the plaintiff), the Deceased did not utter any complaints or note any misconduct of the 1^st defendant or that the 1^st defendant only wanted money from the Deceased.

(8)  The relationship between the Deceased and the 1^st defendant was that of an ordinary married couple and the Land was their matrimonial home for decades.

7.  The court further had no difficulty in finding against the plaintiff’s case that the Deceased had treated the 1^st defendant as a prostitute, which was held to be not true for, inter alia, the following reasons:

(1)  From the uncontradicted evidence of the 1^st defendant, when the 1^st defendant left home with the daughter for a few days, the Deceased went to the house of the 1^st defendant’s friend to beg the 1^st defendant to go back to the matrimonial house on the Land to live with him again and promised her that he would quit gambling and drugs.

(2)  The court accepted the 1^st defendant’s evidence that she would collect money earned from the fish breeding and car park businesses and such money was put in the drawer of the house on the Land for the Couple to use for family expenses (無分彼此)[4].

B2.  The family businesses

8.  The court found as a fact that the 1^st defendant jointly managed the family businesses with the Deceased with no superior rights of either one over the other.  This was corroborated by DW2 as an independent witness.  DW2 noted that both the 1^st defendant and the Deceased discussed with him the amount of his fees for transporting their fish to the market and other matters of the fish-breeding business.  After the Land was used for the car park business, DW2 again would seek permission from either the 1^st defendant or the Deceased to park his cars on the Land. 

9.  Further, as mentioned above, in the 1^st defendant’s oral evidence she said she would collect money earned from the fish breeding and car park businesses and such money was put in the drawer of the house on the Land for the Couple to use for family expenses (無分彼此)[5].  Her evidence was accepted by the court[6].  So the family businesses belong to the Couple on the evidence of the 1^st defendant.

10.  The 1^st defendant also explained in her testimony that the reason why she noted in her Letter to the Deceased [C1/588] that she would not have any rental income from the Land in future was that at the time when the letter was written (ie around 1995), they had already received a writ in relation to the Land.

11.  I pause here to note that the 1^st defendant’s saying in the letter that she would not have any rental income from the Land in future is not inconsistent with her case.  If she did move to Japan, as mentioned in the letter, as a practical reality she would not have access to the drawer in which profit from the Land (in the form of the car park business)  was kept.

B3.  The Deceased’s personality

12.  The court found that the Deceased was not a man with a one-sided personality of a stubborn, self-centered, traditional Chinese village style and autocratic person, as suggested by the plaintiff. 

13.  There were occasions where the Deceased demonstrated other aspects to his personality, that is, a caring, understanding and even tender husband and a father with a rational mind:

(1)  The Deceased letting the 1^st defendant supervise the 1992 Action;

(2)  The Deceased’s 4^th Letter to PW2, where he stated that he regretted his temper which caused separation with his children;

(3)  The Deceased did not attend the plaintiff’s wedding as he did not want to upset the 1^st defendant;

(4)  The Deceased expressed gratitude to PW2 about the money PW2 sent to the Deceased in his letters to PW2;

(5)  In the letter written by the 1^st defendant to the Deceased in 1995 [C1/588], the 1^st defendant addressed herself as “wife”, which shows that their relationship was very normal and that the Deceased cared about his daughter by providing $8,000 per month for her living in in the United States;

(6)  The plaintiff’s own case is that the Deceased agreed to remarry the 1^st defendant in 1997.

B4.  Divorce

14.  The court found that the Couple’s divorce between 1994 to 1997 was a sham to facilitate an adoption of the daughter by the 1^st defendant’s mother in the United States so that the daughter could emigrate to the United States, while the 1^st defendant continued to live on the Land during the period of the sham divorce from 1994 to 1997[7].

15.  The court found that the 1^st defendant’s Letter to the Deceased [C1/588] supported this finding as the 1^st defendant signed off her letter with “老婆字” and that the 1^st defendant’s Letter was written in 1995, which was during the purported divorce.

16.  The court further found that the 1^st defendant did not divorce the Deceased in 1994 when the Deceased’s financial situation was at its worst state and only re-marry him after his financial situation improved in 1997, as alleged by the plaintiff.  The court found that the 1^st defendant was not going after the Deceased’s money because the Deceased had never been wealthy all his life, had gambling and drug additions and yet the 1^st defendant stayed with the Deceased and took care of him throughout their long-lasting and loving relationship.

17.  It is common ground that the plaintiff and PW2 were never present and hence they could not give any direct evidence to prove that the 1^st defendant stopped living with the Deceased between 1994 to 1997.  In any event, the 1^st defendant’s evidence regarding the divorce being a sham was clearly accepted by the court. 

B5.  The 1^st defendant’s Letter to the Deceased in 1995

18.  In relation to the 1^st defendant’s Letter to the Deceased [C1/588], as mentioned above, the 1^st defendant explained the reason of her writing such Letter to the Deceased stating that she would not have any rental income from the Land in future.  Her evidence is that by the time the letter was written (ie around 1995), they had already received a writ in relation to the Land.  The 1^st defendant’s evidence regarding the joint management with the Deceased of the family businesses carried out on the Land and the sharing of the profits from the Land was accepted in the Judgment[8]. Further, there is no inconsistency with the 1^st defendant’s case: if the 1^st defendant was to leave to move to Japan, obviously she would have no access to the joint pool of income.

B6.  The 1992 Action

19.  Although the 1^st defendant applied to be joined as a party to the 1992 Action at one point, ultimately, she withdrew from the Action as she did not want to complicate the 1992 Action and she was of the view that she and the Deceased 無分彼此.  The 1^st defendant’s evidence in this respect is summarised and referred to in paragraphs 9 and 10 of the Judgment. 

B7.  Will of the Deceased

20.  The plaintiff points out at §46 his Supplemental Submissions that the Deceased made a Will in 1999 bequeathing his estate to his male offsprings, thus evidencing that the Deceased did not intend to disinherit his sons.  With respect, this misses the point.  If the 1^st defendant’s case is accepted, the Deceased held the Land on trust for the 1^st defendant or was estopped from denying her title.  Hence, if the court finds for the 1^st defendant on constructive trust and estoppel, the result is that the beneficial interest in the Land simply does not form part of the Estate of the Deceased.

C.  COMMON INTENTION CONSTRUCTIVE TRUST (ISSUES (1)  & (2))

C1.  Relevant legal principles regarding common intention constructive trust

21.  In Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9, Godfrey Lam J (as he then was)  set out at §§46 and 47 the elements that a claimant has to prove in order to establish a common intention constructive trust:

(1)  there was a common intention between the relevant parties that a party was to be a beneficial owner of the land;

(2)  The party altered her position in detrimental reliance upon such common intention;

(3)  It is unconscionable for the other party to assert ownership in reliance on his legal title to the land;

(4)  In ascertaining whether there was a common intention, it is the objective intention of each party “which was reasonably understood by the other party to be manifested by that party’s words and conduct” that one must examine.

C2.  Application of the principles regarding common intention constructive trust

C2.1  Common intention between the Couple

22.  The 1^st defendant submits that the issue of whether there is common intention between the 1^st defendant and the Deceased is a matter relating purely to the understanding of the Couple as husband and wife which is very much privy to themselves and not known to any third party. 

23.  The plaintiff and PW2 lived apart from the Couple for a long time before the Deceased passed away and were not present at all in the daily lives of the Couple for decades.  Clearly, they cannot and do not have direct knowledge on the subject matter of the mutual understanding and intentions of the Couple and thus cannot give useful evidence on the issue.

24.  From the evidence already adduced at the first trial and pursuant to the factual findings of the court in the Judgment, this court has no difficulty in finding that the relationship of the Couple and the 1^st defendant’s evidence present a classic case of common intention constructive trust, where there was a common understanding between the Couple that the 1^st defendant would have an equal share in the beneficial interest in the Land.  In particular:

(1)  During the lives of the Couple, the Land was held on a constructive trust for the Couple as joint tenants, which passed to the 1^st defendant solely upon the death of the Deceased by the right of survivorship.

(2)  The Couple’s marriage was accepted by the Court to be a genuine marriage with love and affection (see Section B1 above).

(3)  Most significantly, in relation to the family businesses, which involved use of the Land and generated profits from the Land (see Section B2 above):

(a)  The court found that Couple shared the proceeds of the family businesses in a 無分彼此 manner. 

(b)  The court found that the 1^st defendant and the Deceased jointly managed the family businesses with no superior rights over the other.

(c)  The 1^st defendant’s oral testimony, which was accepted by the court, proves that the proceeds of the fishing and car park businesses were put in a drawer at home for the Couple’s use for living expenses in a 無分彼此 manner.

(d)  The 1^st defendant’s oral testimony is consistent with her case set out in her witness statements and those of DW2.

(4)  In my view, the sharing of profits from the Land by the Deceased and the 1^st defendant throughout the years is clearly consistent with and constitutes strong evidence of the common intentions between the parties that they were to be joint beneficial owners of the Land itself.

(5)  The Deceased’s personality of a caring, understanding and even tender husband who cared about the 1^st defendant’s feelings (see Section B3 above).

(6)  The divorce was not a genuine one, the 1^st defendant did not cease living on the Land between 1994 to 1997 (see Section B4 above).

(7)  Importantly, during an argument in or about 1995, the Deceased begged and/or requested the 1^st defendant to return to the Land and promised her that he will give her everything if she agrees to return “他更對我說如果我肯跟他回到該土地，「會將所有嘢比晒」我” (§6 of the first defendant’s supplemental witness statement ).  At that time the Deceased did not have any asset other than the Land.  This is clearly consistent with the 1^st defendant’s case.

(8)  In further support of the 1^st defendant’s case, the Deceased told the 1^st defendant on multiple locations at home and in hospital that she would be left with the Land and the business carried out on the Land solely when he died, so that the 1^st defendant could support herself and her daughter’s education at university[9].

(9)  The 1^st defendant and the Deceased attended the Legal Aid Department, and the solicitors acting for the Deceased in the 1992 Action together.  The 1^st defendant also took part in giving instructions and prepared documents for the 1992 Action prior to the Deceased’s death.

(10)  The legal fees for the 1992 Action were funded by the profit from their joint car Park business.

25.  Along with the undisputed fact that the 1^st defendant had taken care of the Deceased since she moved onto the Land in 1980 until his death in 2000, the above evidence is more than sufficient to prove the intention and mutual understanding between the Couple regarding the 1^st defendant having a beneficial interest in the Land.

C2.2  The 1^st defendant’s detrimental reliance

26.  It is clear from the overall evidence that the 1^st defendant relied on the promise and common intention to conduct herself throughout the relevant years:

(1)  The 1^st defendant took care of the Deceased singlehandedly since 1980 up to his death in 2000.

(2)  The 1^st defendant’s active role in and shared the burden of managing the Land and/or the businesses carried out on the Land.

(3)  The 1^st defendant’s refrainment to assert her entitlement to the Land in the 1992 Action, as she did not want to complicate the 1992 Action and also because she was of the view that she and the Deceased 無分彼此.

(4)  The 1^st defendant continued to care for and manage the Land and/or the car park business, including applying for licences for the businesses.

27.  In the plaintiff’s Supplemental Submissions, the plaintiff makes the point that the 1^st defendant did not rely on the Deceased’s statements/conduct about the Land and that she returned to the Land only because of the promises of the Deceased to quit gambling and taking drugs.  I agree that the point made by the plaintiff is artificial and should be rejected.  The Deceased’s promise to give everything to the 1^st defendant including the Land (see paragraph 24(7)  above)  must be an added assurance to the 1^st defendant so as to persuade the 1^st defendant to return to the Deceased. 

28.  The plaintiff further alleges in §§56 to 60 of the plaintiff’s Supplemental Submissions that the 1^st defendant ought not to be granted any equitable relief because the 1^st defendant comes to court with unclean hands (ie Issue (2)).  

29.  I do not agree.  The position is explained by Lam VP (as he then was)  in Cheung Lai Mui v Cheung Wai Shing[2020] HKCA 148 in the course of discussing the difference between a claim based on a common intention constructive trust and proprietary estoppel:

“1.4 The difference between a claim based on a common intention constructive trust and proprietary estoppel was highlighted by Lord Walker in Stack v Dowden [2007] 2 WLR 831 at [37],

‘I have to say that I am now rather less enthusiastic about the notion that proprietary estoppel and ‘common [intention]’ constructive trusts can or should be completely assimilated. Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the ‘true’ owner. The claim is a ‘mere equity’. It is to be satisfied by the minimum award necessary to do justice (Crabb v Arun District Council [1976] Ch 179, 198), which may sometimes lead to no more than a monetary award. A ‘common intention’ constructive trust, by contrast, is identifying the true beneficial owner or owners, and the size of their beneficial interests.’

‘1.5 In order to acquire beneficial ownership in a property, the claimant of a common intention constructive trust must establish all the elements before the trust is constituted. …” (Emphasis supplied)

30.  Thus, once the 1^st defendant has been identified to be the true beneficial owner of the Land and the size of her beneficial interest ascertained, the court should simply give effect to the finding of such beneficial ownership.

31.  Accordingly, I grant a declaration that the plaintiff (and/or the Deceased’s Estate)  has held the Land on constructive trust for the benefit of the 1^st defendant as sole beneficial owner thereof.

 D.  PROPRIETARY ESTOPPEL (ISSUES (3)  & (4))

32.  Further or alternatively, the 1^st defendant submits that the plaintiff is estopped from denying that she has acquired beneficial interest in the Land and could stay and live on it.

D1.  Relevant legal principles regarding proprietary estoppel

33.  The elements required to prove proprietary estoppel are:

(1)  A representation or assurance made to the claimant;

(2)  Reliance on it by the claimant;

(3)  Detriment to the claimant in consequence of his/her reliance.

(See §107 of Fung Oi Ha v Fung Pui On, HCA 17/2012 (unrep, 6/06/2016))

34.  One would immediately see that the requirements of common intention constructive trust and proprietary estoppel are similar.  In fact, the requirement of proprietary estoppel is less stringent because it does not require a promise/representation concerning beneficial interest in the land, but can be established regarding different kinds of interests, for instance to stay on and use the land for life. 

D2.  Application of the principles regarding proprietary estoppel

35.  The factual findings and/or evidence referred to in paragraphs 23 to 25 above also support the finding that the Deceased did make representations and/or assurances to the 1^st defendant in relation to her interest in the Land.

36.  The evidence set out in paragraph 26 above supports detrimental reliance on the part of the 1^st defendant. 

37.  In the premises, the elements of proprietary estoppel are satisfied.

38.  Accordingly, I grant a declaration that the plaintiff (and/or the Deceased’s Estate)  is estopped from denying that the 1^st defendant is entitled to beneficial interest in the Land as the sole beneficial owner thereof. 

E.  IPFDO CLAIM (ISSUES (6), (7)  & (8))

39.  As it is common ground that the Estate of the Deceased only consists of the squatter’s possessory title in the Land, if the 1^st defendant succeeds in the causes of action based on constructive trust or proprietary estoppel, she would have been adequately provided for under the IPFDO from the net assets of the Estate.  Hence this claim under the IPFDO is truly an alternative claim.  The claim will be successful only if the court finds against the 1^st defendant on both constructive trust and estoppel.  Based on my findings on issues (1)  and (3), it is strictly not necessary to deal with the 1^st defendant’s claim under the IPFDO.  For the sake of completeness, I shall briefly deal with the 1^st defendant’s claim under the IPFDO in case I’m wrong.

40.  The 1^st defendant claims reasonable financial provision from the Estate under the IPFDO, on the basis that the 1^st defendant is entitled to reasonable financial provision by reason of the 1^st defendant’s dependency on the Deceased before his death.

E1.  Legal principles regarding financial provisions under the IPFDO

41.  The court has the power to make various orders upon the court being “satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant” (Section 4 of the IPFDO).

42.  Section 6 of the IPFDO provides that:

“An application for an order under section 4 shall not, except with the permission of the court, be made after the end of the period of 6 months from the date on which representation with respect to the estate of the deceased is first taken out.” (Emphasis added)

E2.  Leave to claim under the IPFDO out of time

43.  The grant of Letters of Administration in respect of the Estate was on 14 April 2010.  The deadline to make a claim under the IPFDO is 14 October 2010. 

44.  The 1^st defendant notified the plaintiff of her intention to apply for relief under the IPFDO on 4 October 2012.  Accordingly, there was a delay of around 2 years. The 1^st defendant’s claim under the IPFDO was made out of time. Leave would have to be obtained for the 1^st defendant to claim financial provisions under the IPFDO.

45.  In LZX v WYL [2012] 5 HKLRD 29 at §30, the court sets out the relevant factors to be considered in deciding whether leave should be granted.  The court noted the following non-exhaustive guidelines:

(1)  The discretion is unfettered.  The discretion is to be exercised in accordance with what is just and proper.

(2)  The onus lies on the applicant (the 1^st defendant in this case)  to establish sufficient grounds for taking the case out of the general rule and depriving those who are protected by it of its benefits.  The applicant must make out a substantial case for it being just and proper for the court to exercise its statutory discretion to extend the time.

(3)  How promptly and in what circumstances the applicant has sought the permission of the court after the time limit has expired.  The whole circumstances should be looked at, and not least the reasons for the delay, and also the promptitude with which, by letter before action or otherwise, the claimant gave warning to the defendants of the proposed application.

(4)  Whether or not negotiations have been commenced with the time limit; for if they have, and time has run out while they are proceeding, this is likely to encourage the court to extend the time.

(5)  Whether or not the estate has been distributed before a claim under the IPFDO has been made or notified.

(6)  Whether a refusal to extend the time would leave the claimant without redress against anybody.

46.  In addition to the above guidelines, the court in LZX v WYL held at §31, “the applicant would also need to demonstrate that he had an arguable case, a case fit to go to trial, and that in approaching that matter, the court’s approach would be rather the same as when considering whether a defendant ought to have leave to defend in proceedings for summary judgment”.

47.  I agree that, had it been necessary, leave should be granted to the 1^st defendant to make the application out of time for the following reasons:

(1)  Although the 1^st defendant had knowledge of the Will back in 2001, she had not received any legal advice on her rights under the IPFDO.

(2)  After the death of the Deceased, the 1^st defendant had little communication with the plaintiff.  She was unaware of the grant of the Letters of Administration and was first advised on her entitlement under the IPFDO in August 2012 when she sought assistance from the Legal Aid Department (§45 of the 1^st defendant’s witness statement). 

(3)  Upon the grant of the Legal Aid Certificate on 4 October 2012, she immediately and without delay notified the plaintiff through her solicitors of her intention to apply for relief under the IPFDO.

(4)  The 1^st defendant as an unsophisticated person acted as promptly as she could have done in the circumstances.

(5)  There is no prejudice to the plaintiff by reason of the delay in making the application.  There is no question of loss of evidence.  The parties are in exactly the same position as in the case of no delay and that the application was made in October 2010.

(6)  The Estate has no assets other than the Land.  Hence, there is no question of the assets of the Estate having been sold or distributed.  The Land remains intact for the carrying out of an order of maintenance under the IPFDO.

(7)  It is just and proper that the application be decided on its merits.

(8)  In particular, I give weight to the consideration that a refusal to extend the time would leave the 1^st defendant without redress against anybody.

E3.  Entitlement under the IPFDO

48.  If the court grants leave for the 1^st defendant’s application, the following matters would be considered in determining the application (Section 5(1)  of the IPFDO):

(1)  the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(2)  the financial resources and financial needs which any other applicant for an order under section 4 has or is likely to have in the foreseeable future;

(3)  the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(4)  any obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased;

(5)  the size and nature of the net estate of the deceased;

(6)  any physical or mental disability of any applicant for an order under section 4 or any beneficiary of the estate of the deceased;

(7)  any other matter, including conduct of the applicant or any other person, which the court may consider relevant.

49.  In addition, the court would consider the factors set out in section 5(2)  of the IPFDO:

(1)  the age of the applicant and the duration of the marriage;

(2)  the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.

50.  The 1^st defendant has locus standi under section 3 of the IPFDO.  The Deceased died domiciled in Hong Kong and is survived by the 1^st defendant as his spouse (section 3(1)(i)  of the IPFDO).

51.  As the Will made no financial provision for the 1^st defendant, it is evident that the Deceased’s Will does not make any reasonable financial provision for the 1^st defendant.

52.  In cases of an application by the spouse of the deceased, the court would also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce (section 5(2)  of the IPFDO).

53.  On the premise that it was the Deceased who had the squatter’s title and the 1^st defendant had no share in it, the 1^st defendant was dependent upon the Deceased financially prior to his death.  The 1^st defendant took care of the Deceased’s businesses for decades and made substantial contributions to the family.  The 1^st defendant lived on the Land as her matrimonial residence.  The 1^st defendant was wholly dependent on the Deceased for a living.  The financial provision to the 1^st defendant before the Deceased’s death was substantial.

54.  As mentioned above, the application will only be necessary when the causes of action based on constructive trust and estoppel both fail. In which case, the 1^st defendant would not be able to stay or live on the Land as she did before the Deceased died.  The 1^st defendant thus lost all her dependency after the death of the Deceased.

55.  The 1^st defendant at the time of trial earns a monthly income of $9,000 and pays monthly rent at HK$3,000, with miscellaneous expenses of $3,000 per month.  She spends around $2,000 per month to purchase tonic food.  As at the date of her witness statement dated 21 August 2013, she only had savings of $3,000.  She has no other assets.  The above matters are not challenged by the plaintiff.

56.  In these circumstances, the 1^st defendant is clearly entitled to financial provisions under the IPFDO. 

E4.  The amount of financial provision

57.  Based on the figures on the basis of agricultural land provided by the plaintiff’s expert [B1/156], the average mesne profits of the Land is $3,111.11 per month ($87,111.16/28 months). 

58.  The 1^st defendant’s dependency in terms of mesne profits for her residence on the Land prior to the death of the Deceased would thus be $3,111.11 per month.  As to dependency on living expenses, prior to the death of the Deceased, the family income was around $20,000 per month which was shared equally by the Deceased and the 1^st defendant.  The 1^st defendant’s dependency would be $10,000.

59.  The total monthly dependency of the 1^st defendant for living on the Land and living expenses would therefore be $13,111.11 per month. 

60.  I agree the reasonable financial provision to the 1^st defendant should be sufficient for her living for at least 10 years after the death of the Deceased.

61.  Accordingly, the amount of reasonable financial provision should be $1,573,333.20 (ie $13,111.11 x 12 months x 10 years).

62.  This amount would have to be set off against the plaintiff’s claim of mesne profits against the 1^st defendant for trespass on the Land (on the basis that the 1^st defendant’s claim to have a right to stay in the Land fails), which is in the amount of $635,053.66 [B1/156].

63.  The balance to be received by the 1^st defendant under the IPFDO would therefore be $1,573,333.20 – $635,053.66 = $938,279.54.

F.  THE PLAINTIFF’S CLAIM FOR ACCOUNT OF PROFITS AND INDEMNITY/REIMBURSEMENT (ISSUE (5))

F1.  Account of profits

64.  In the plaintiff’s Supplemental Submissions, the plaintiff argues that in the event the court finds that the Land is not held on constructive trust for the 1^st defendant and if the Land is not subject to estoppel, the plaintiff claims an amount of $6,480,000 as account for profits of the 1^st defendant’s use and occupation of the Land after the Deceased’s death.

65.  The 1^st defendant submits that this claim is unfounded in law.  The plaintiff is only entitled to mesne profits for wrongful use of the Land and not the profits earned from the business of car parking run by the 1^st defendant.

66.  The 1^st defendant submits that as a matter of law the relief of “account of profits” is an equitable relief which is distinct from an award of damages on user basis.  The equitable relief of account of profits arises only when a claimant is compensated on the basis of an invasion of their proprietary rights of the business wrongfully stolen from the claimant, such as infringement of intellectual property or breach of fiduciary duties (§§20-036 to 20-045, Snell’s Equity 34^th Edn).

67.  In the present case the plaintiff’s claim is for trespass by the 1^st defendant on the Land.  Therefore, the only remedy in law (nothing to do with equity)  is mesne profits for using the Land.  In the event that the court finds that the plaintiff is entitled to possession of the Land, the plaintiff’s claim of mesne profits (which arises from wrongful use of the Land at common law)  of $635,053.66 is the only monetary remedy available in law to the plaintiff; and is adequate compensation for loss of use of the Land by the plaintiff.  Equity simply has no role to play. 

68.  I agree with the 1^st defendant’s argument.  In fact, the plaintiff’s approach has been firmly disapproved of in the English Court of Appeal’s decision in Severn Trent Water Ltd v Barnes [2004] EWCA Civ 570 at §41:

“Finally, it is to be noted that the judge appears to have taken the view that some additional award was necessary on the basis that ‘to reflect the fact that the defendants were liable, as trespassers x the claimant is entitled to damages for some barely appreciable percentage of the defendant’s profits’ (see the second italicised passage from the judgment quoted at paragraph 15 above). In this respect I consider that he misunderstood the authorities. It is of course the position that in cases of trespass of this kind there is no right to a share in, or account of, profits in any conventional sense. The only relevance of the defendant’s profits is that they are likely to be a helpful reference point for the court when seeking to fix upon a fair price for a notional licence. …” (Emphasis by underlining supplied)

69.  In conclusion, I would have disallowed the plaintiff’s claim of account of profits.

F2.  Indemnity/Reimbursement

70.  At §§73 and 74 of the plaintiff’s Supplemental Submissions, the plaintiff argues that the Estate has paid $217,631.58 to Birkenhead for trespass in the 1992 Action, and that the 1^st defendant should reimburse a proportionate part thereof to the plaintiff. 

71.  As correctly submitted by the 1^st defendant, the Court of Appeal on appeal has already found that the 1^st defendant was not a squatter of the Land jointly with the Deceased and that she was a mere licensee.  That was decided in the context of the law on adverse possession.  And the Court of Appeal remitted the remaining issues to this court on the other causes of action.  In the premises, the foundation of the plaintiff’s claim for reimbursement on the basis of the 1^st defendant being a joint adverse possessor is gone.  The 1^st defendant is not liable to indemnify and/or reimburse the plaintiff for the Deceased’s trespass onto Birkenhead’s land. 

G.  COSTS

72.  I order that the costs relating to the determination of the issues set out at paragraph 3 above (including all costs reserved, if any)  be paid by the plaintiff to the 1^st defendant, such costs are to be taxed if not agreed.  The plaintiff’s and the 1^st defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

73.  The above order as to costs is nisi and shall become absolute in the absence of any application within 21 days to vary the same.

74.  Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.

Mr Tommy Lo, instructed by Messrs W K To & Co, for the plaintiff

Mr Erik Shum and Ms Christy Wong, instructed by Messrs Hobson & Ma, for the 1^st defendant

HCA 1128/2007

[2021] HKCFI 2435

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1128 OF 2007

________________________

________________________

________________________

J U D G M E N T

________________________

A.  INTRODUCTION

1.  Leung Chi Cheong, the plaintiff, is the personal representative of the estate (“Estate”)  of his father, Leung Fai (the “Deceased”). The 1^st defendant, Madam Liu Che Wun (“Madam Liu” or the “1^st defendant”), is the second wife of the Deceased and step-mother of the plaintiff.

2.  The plaintiff, as personal representative of the Estate, commenced the present action against the 1^st defendant for trespassing part of Lot 769 in Demarcation District 99 in Mai Po, Yuen Long (the “Land”)  and claims injunction restraining Madam Liu from entering or using the Land and damages and/or mesne profit for trespass.

3.  The 2^nd defendant is a nominal defendant representing every other person in occupation of the Land.

B.  BACKGROUND

4.  Madam Liu’s case is that she started co-habiting with the Deceased on the Land in 1980.  In addition to living in the structures erected on the Land, Madam Liu and the Deceased jointly carried out fish breeding activities at the fishpond on the Land (“Fishpond”).

5.  In the late 1980s, since the fish breeding business deteriorated, Madam Liu and the Deceased ceased conducting the business and the Deceased began to sell sweet soup in the Yuen Long area while Madam Liu maintained the Land including the Fishpond.

6.  Madam Liu gave birth to a daughter on 14 September 1981 (the “Daughter”)  and the couple subsequently got married on 5 July 1986.  They divorced in around the mid-1990s, and on Madam Liu’s case, upon advice of immigration consultant for the purpose of facilitating the Daughter’s emigration to the USA.  Despite the divorce, Madam Liu continued to live on the Land with the Deceased as husband and wife and they remarried on 2 September 1997.

7.  In about 1991, Madam Liu and the Deceased jointly decided to reclaim the Fishpond and converted the area into a car parking area for container trucks/lorries (“Car Park”).  Madam Liu and the Deceased jointly managed the business of the Car Park for profits.

8.  On 10 September 1992, in HCA 6145/1992, Birkenhead Properties and Investment Ltd (“Birkenhead”), registered owner of a larger piece of land including the Land (“Birkenhead Land”), commenced proceedings against the Deceased for, inter alia, possession of the Birkenhead Land.  The Deceased counterclaimed for possessory title thereto on the ground of adverse possession (the “1992 Action”).

9.  At one stage in 2001, Madam Liu applied to be joined as a party in the 1992 Action on the ground that she also had interest in the Birkenhead Land; but withdrew her application in 2009 thinking that the Deceased’s said claim would protect her interest and status relating to the subject land in dispute.

10.  It is Madam Liu’s case that she had all along been in joint possession of the Land with the Deceased as joint squatters.

11.  Before the conclusion of the 1992 Action, the Deceased died on 28 December 2000.  The Deceased left a Will dated 19 January 1999, devising all his estate to his sons, including the plaintiff.

12.  After and despite the Deceased’s death on 28 December 2000, Madam Liu continued to manage the business of the Car Park until about 2004.

13.  Madam Liu also continued to reside on and was in possession of the Land until early 2006.

14.  On 30 May 2007, prior to the conclusion of the 1992 Action, the plaintiff commenced the present action against Madam Liu.

15.  According to Madam Liu, having been misled by the plaintiff’s misrepresentation as to the legal consequences of the Will and in the absence of legal advice, in or about early October 2009, Madam Liu delivered the keys of her house situated on the Land and the keys to the gates of the Car Park to the plaintiff’s solicitors and vacated from the Land.  The plaintiff has since been in physical possession of the Land. 

16.  On 2 February 2011, the Deceased’s counterclaim in the 1992 Action against the registered owner partially succeeded when the court held that he had acquired good possessory title of part of the Birkenhead Land ie the Land in dispute in the present action.

C.  THE PLAINTIFF’S CASE

17.  The plaintiff’s case is that Madam Liu trespassed onto the Land after the death of the Deceased and the plaintiff claims injunction restraining Madam Liu from entering or using the Land and damages and/or mesne profit for trespass.

D.  THE 1^ST DEFENDANT’S CASE

18.  Madam Liu’s defence/counterclaim is that she is entitled to possess the Land as she had been in possession of the Land from the 1980s to 2009, when she was deceived into delivering up possession to the plaintiff:

(1)  For the period prior to the Deceased’s death from the 1980s to 28 December 2000, she jointly possessed the Land with the Deceased as joint squatters with equal rights and interests.

(2)  For the period after the Deceased’s death from 2000 to 2009, Madam Liu continued to possess the Land as squatter.  The 1^st defendant therefore had accrued squatter’s possessory title which runs parallel to the Deceased’s squatter’s right.

19.  Therefore, at the time of commencement of this action on 30 May 2007, Madam Liu had good possessory title of the Land and was entitled to continue with her possession as squatter.  Hence, since the 1^st defendant was cheated by misrepresentation to vacate the Land and deliver physical possession to the plaintiff, the 1^st defendant is entitled to resume possession of the Land.

20.  Further or alternatively, the 1^st defendant was entitled to stay on and use the Land by reason of common intention constructive trust/proprietary estoppel on the strength of the Deceased’s representations and conduct supported by their relationship.

21.  Further, the 1^st defendant is entitled to reasonable provision under the Inheritance (Provision for Family and Dependents)  Ordinance, Cap 481 (“IPFDO”), as the Deceased had not made any provisions for the 1^st defendant in his will when the 1^st defendant was provided by the Deceased before his death.

E.  ISSUES AT TRIAL

22.  The 1^st defendant’s submissions can be summarised as follows:

(1)  The 1^st defendant jointly possessed the Land from 1980 to 2000 with the Deceased as joint squatters and thereafter as sole squatter until 2009.  In the absence of any direct evidence of licence, the plaintiff’s attempt to rely on the alleged autocratic character of the Deceased to support an inference that the Deceased licensed his wife, the 1^st defendant, to occupy and live on the Land must fail.  The 1^st defendant’s primary case of having a squatter’s title in her own right as a tenant in common with equal share with the Estate should be upheld.

(2)  Alternatively, Madam Liu is entitled to continue to possess the Land as she holds beneficial interest in the Land by the operation of common intention constructive trust/proprietary estoppel by reason of representations/promises of the Deceased to the 1^st defendant.

(3)  Alternative to the above causes of action relating to the Land, if the court finds that the 1^st defendant does not possess any interest in the Land, the 1^st defendant, being a dependent of the Deceased prior to his death in terms of provision of (a)  residence for the 1^st defendant to live in for decades and (b)  household and daily living, and was not reasonably provided in the Deceased’s will, should be entitled to reasonable financial provision from the estate of the Deceased which owns squatter’s possessory title to the Land and earned profits therefrom under the IPFDO.

F.  THE 1^ST DEFENDANT’S ADVERSE POSSESSORY TITLE ON HER OWN RIGHT

F1.  The 1^st defendant was a joint squatter with the Deceased as Husband and Wife

F1(a).  Overview on the main issue

23.  The main plank of the 1^st defendant’s argument regarding the cause of action of joint squatters of equal right is this: the squatter’s possessory title of the 1^st defendant co-existed with that of the Deceased when they both had physical possession of the Land, without one being a licensee of the other.

24.  As submitted by the 1^st defendant, single and joint possession can be exercised by several persons (usually in the context of a family situation).  When more than one squatter has possession simultaneously, the title acquired is held by the squatters jointly (Powell v McFarlane (1979)  38 P & CR 452, at p 470 and U Po Chu v Tsang Pui Ling DCMP 467/2013 (unrep, 30 June 2016), at §§ 43-45).  In those circumstances, vis-a-vis the outside world including the registered owner of the land, adverse possession is by one single and joint family unit.  Each one of the possessors can defend the owner’s suit to recover possession.  The 1992 Action is a contest between the Deceased and the owner in the above context.  The 1992 Action did not deal with, let alone resolve, any question of relationship among the joint possessors within the family or whether licences have been granted by one of the possessors to the others.

25.  However, when it comes to the internal relationship between adverse possessors within the family, that is a completely different context with which the present case is concerned.  Unless otherwise proven, prima facie each possessor of the land should have his/her own squatter’s right.

26.  As submitted by the 1^st defendant, the only exception to the above situation in law is when one squatter grants licences to the other occupants to stay, live or work on the land.  In that event, the squatter’s right belongs to the licensor while his licensees stay under the permission of the licensor and do not have any squatter’s right.

27.  To put the above exception into the context of the present case, the question is whether it is proved that the Deceased granted a licence to his wife, the 1^st defendant for her to stay, live and operate businesses on the Land with him.  If no such licence is proved, the prima facie position of each squatter/possessor having his/her own right, such that the 1^st defendant has squatter’s right of her own, prevails.  In other words, the Deceased would have no right to evict the 1^st defendant from the Land during the Deceased’s lifetime and hence the plaintiff being the executor of the estate of the Deceased would have no right to evict the 1^st defendant either.

28.  With the evidence adduced by the 1^st defendant, the 1^st defendant submits that there was no licence at all because she and the Deceased were husband and wife and nobody talked about matters like “licence” to stay.  Such evidence is logical and natural in any normal marital relationship.  This is especially so when in this case the Land was not legally purchased by or owned in the name of the Deceased, but was in the course of accrual of adverse possession and was the matrimonial home of the Deceased and the 1^st defendant as a couple (the “Couple”).

29.  In the plaintiff’s case at trial, no direct evidence has been adduced to support the bare assertion of licence having been granted by the Deceased to the 1^st defendant.  During the long period after all the children of the Deceased had left the Land in around 1991 and prior to the death of the Deceased, the only persons living on and occupying the Land were the Deceased and the 1^st defendant.  Hence, only the Deceased and the 1^st defendant could depose to their marital relationship, daily married life and intimate conversations.  It is therefore understandable and to be expected that the plaintiff has no direct evidence to prove any licence.  The plaintiff thus resorted to painting a picture of the Deceased’s character as a controlling and autocratic person and that he presented himself to outsiders as the main operator of the family businesses and used his name on utilities registration; so as to invite the court to draw the inference that the Deceased had granted a licence to the 1^st defendant during his lifetime, as oppose to sharing joint possession of the Land with the 1^st defendant.

30.  The nature of the relationship between the joint occupants is important, since common sense would suggest the prima facie answer as to whether a licence exists.  The present case of joint occupation does not involve the following relationships which would usually impute a licence:

(1)  parents vis-a-vis children;

(2)  employers vis-a-vis staff; or

(3)  a squatter allowing friends of relatives to stay with him temporarily or even for lengthy period.

The relationship in the present case is a married couple using the Land as their matrimonial home and operating the family businesses on the Land next to the matrimonial house to support the living of their family.  The prima facie and logical effect and deduction is that the married couple have an established marriage tie unique to themselves and they share their matrimonial home and lived together without distinction or superior right of one over the other.  This is especially so when during the limitation period none of them had established title to the Land, as they were both in the process of jointly acquiring a squatter’s title.  In the circumstances there is all the more reason for the Couple not to have discussed about who “owned” the Land or had superior rights relating to the Land, as the 1^st defendant reasonably testified.

31.  Factually, there are 3 possible scenarios:

(1)  The Deceased licensed Madam Liu to stay on the Land;

(2)  Madam Liu licensed the Deceased to stay on the Land (which is not the 1^st defendant’s case and hence can be ignored);

(3)  Neither the Deceased nor Madam Liu licensed the other to stay (ie joint possession of the Land when each has his/her own squatter’s right).

32.  The court has to determine which of the first or third scenarios is the state of affairs in the present case.  The plaintiff’s case is scenario (1)  whereas the 1^st defendant’s case is scenario (3).  Since there is no documentary evidence to prove any licence, the intentions of the Deceased and Madam Liu and their relationship as married couple would be the most relevant factors.

33.  The 1^st defendant submits that the overall evidence clearly supports scenario (3), ie the Deceased and Madam Liu jointly possessed the Land as joint squatters and no licence by the Deceased to the 1^st defendant existed.

F1(b).  Analysis of evidence in relation to joint squatters

34.  Before analysing the relevant evidence, the court notes the following important and undisputed matters/facts,

(1)  The 1^st defendant moved into and lived in the house on the Land in 1980 and thereafter singlehandedly and continuously took care of the Deceased’s daily living and health until his death in 2000, for about 20 years.

(2)  The Couple gave birth to a daughter in 1981.

(3)  After a period of co-habitation, they got married in 1986.

(4)  Their long relationship as married couple was made known to the Deceased’s children and people around such as neighbours and business associates, for instance Mr Au Yeung (“DW2”).

(5)  The 1^st defendant helped out in the Deceased’s business of both fish rearing and sale and car parking, and this was well known to others including DW2, and that decisions could be made by the 1^st defendant concerning the businesses when the Deceased was not around.

(6)  The Deceased did show love and care for the 1^st defendant to be expected of a husband in an ordinary marriage relationship which was demonstrated by the plaintiff’s own testimony relating to the reason for the Deceased’s absence from the plaintiff’s marriage ceremony, ie the Deceased did not want to upset the 1^st defendant.  The true marital relationship is also demonstrated by the fact that in all the letters the Deceased wrote to Leung Chi Ming produced by the plaintiff, no single word was said by the Deceased complaining or pointing at any misconduct of the 1^st defendant or that the 1^st defendant only wanted money from the Deceased.

(7)  There is no evidence, whether documentary or oral testimony, pointing out or even hinting that in respect of the use of the Land the Deceased treated the 1^st defendant as a mere licensee.  As a matter of fact and to the contrary, it is clear from the uncontradicted evidence of the 1^st defendant concerning the incident of the 1^st defendant leaving home with the Daughter for a few days, it was the Deceased who begged/requested the 1^st defendant to go back to the house on the Land to live with him again.

35.  Given the clear and uncontroversial fact that the Deceased and the 1^st defendant had lived as an ordinary married couple for decades treating the Land as their matrimonial home, a prima facie case of joint adverse possession is made out.  The burden is thus on the plaintiff to prove the existence of a licence contrary to the above ordinary relationship and prima facie case.

F1(c).  The plaintiff’s attempt to rely on indirect evidence to prove an alleged licence

36.  Whether there existed a licence is a matter privy only to the Deceased and the 1^st defendant.  In the absence of any direct evidence, the plaintiff resorted to adducing indirect evidence so as to invite the court to infer the existence of a licence.  Such indirect evidence includes:

(1)  painting a picture of the Deceased’s dominant personality; and

(2)  belittling the Deceased’s relationship with the 1^st defendant to the absurd extent that the Deceased treated the 1^st defendant as a prostitute.

37.  For the reasons set out below, the 1^st defendant submits that the indirect evidence adduced by the plaintiff does not support an inference that the Deceased granted a licence to Madam Liu to stay on the Land.

F1(d).  The plaintiff and PW2 do not know and could not present a complete picture of the relationship between the Couple who were living on the Land by themselves for decades 

38.  The plaintiff himself admitted that after he left the Land in around 1990, there was no contact with the Deceased at least from 1990 to 1995 (絕少聯絡).  From 1995 onwards, he only went back to the Land for 3 to 4 times a year and he never went into the house where Madam Liu resided.  He agreed that from the 1990s to the Deceased’s death, he never saw and had no knowledge as to how the Deceased and Madam Liu interacted with each other.

39.  The plaintiff’s elder brother, Leung Chi Ming (“PW2”)  left the Land even earlier to study in Taiwan in 1978.  Although he returned to the Land within 6 months, he emigrated to the Netherlands in 1981 and have lived there ever since.  He visited the Land from March to November 1983, then for the subsequent 10 years (from 1983 to 1993), he did not visit the Land at all.  Since 1993, he came back 1 to 2 times per year.  He agreed that he had knowledge of most family events through hearsay from his siblings and the Deceased.

40.  By the very fact that both the plaintiff and PW2 ceased living on the Land since they were young, thus not spending any substantial time with the Couple, their evidence on matters such as the relationship between the Couple must be mere general impression and speculations based on distorted impressions of their own.  I agree that they cannot be relied upon to present a complete picture of the relationship of the Deceased and Madam Liu and their activities on the Land.

F1(e).  The Deceased’s personality

41.  The plaintiff tried very hard to paint a false picture of the Deceased’s personality, so as to make the point that it was unlikely for the Deceased to have treated Madam Liu as an equal, rather than a mere licensee.

42.  The plaintiff described the Deceased as a stubborn (“倔強”, “獨行獨斷”)  person, self-centered (“自我中心”), very traditional Chinese village style, and autocratic (“專制, 獨裁”, “大男人” and “一家之主”).  The plaintiff also alleged that the Deceased handled the 1992 Action alone all by himself to demonstrate the above character.

43.  As observed by the court during the trial, a person may have different and even inconsistent aspects of character, to be displayed at different times in life and on different occasions.  It is thus very artificial to assert that the Deceased had only the one-sided personality as suggested by the plaintiff.  I agree that from the overall evidence, the Deceased is far from having the generalized personality painted by the plaintiff as being always dominating in every aspects of life.  This is simply untrue.

44.  For example, in his witness statement, the plaintiff gave evidence that Madam Liu attended the solicitors firm to supervise (監督)  the progress of the 1992 Action.  In this regard, the plaintiff accepted during cross-examination to the effect that if the Deceased indeed had such an authoritarian personality, no one would dare to supervise his discussions with his solicitors.  He further retracted his evidence and accepted that it was incorrect to say that the Deceased handled the 1992 Action alone.

45.  One of the most striking evidence to contradict the plaintiff’s portray of the Deceased is the Deceased’s letters to PW2.  They show vividly that the Deceased was capable of self-reflection and had a very rational side within his personality.  For instance, in the Deceased’s letter to PW2 dated 6 May 1995 (“Deceased’s 4^th Letter”), the Deceased said he regretted having a temper and caused separation with his children (很久很久很想約在港兒女聚首䓵茶，只怪自己一時火氣鑄成了分離之錯，所以我沒勇氣約他們，希望他們原諒我).

46.  From the other significant life events and contemporaneous letters, the court finds that the Deceased had other aspects to his character: a caring, understanding and even tender husband and father with a rational mind, which negates the picture the plaintiff wishes to paint about the Deceased:

(1)  The Deceased chose not to attend the plaintiff’s wedding because he did not want to upset Madam Liu.

(2)  The Deceased showed his remorse of having driven the plaintiff and his siblings away from the house on the Land in 1991 in the Deceased’s 4^th Letter to PW2.

(3)  That the Deceased wanted to contact his children in Hong Kong to gather with them.

(4)  That the Deceased repeatedly expressed gratitude to PW2 about the money PW2 had sent to the Deceased in all his letters to PW2.

(5)  From the contents of the letter written by the 1^st defendant to the Deceased in 1995, the 1^st defendant addressed herself as “wife”, which shows that their relationship was very normal and the Deceased cared about his daughter by providing $8,000 per month for her living in the US.

(6)  On the plaintiff’s own case that the Deceased agreed to remarry the 1^st defendant in 1997.

47.  There is simply nothing about the character of the Deceased based on which an inference can be drawn that he merely granted a licence for the 1^st defendant to stay on the Land.

F1(f).  The relationship between the Deceased and Madam Liu

48.  One of the main aspects of the plaintiff’s case is that the Deceased and Madam Liu’s relationship is not one of love and affection.  The following is what the plaintiff wants the court to find:

(1)  Madam Liu was only going after the Deceased’s money from the start so that the Deceased would provide her with financial stability.  In support of this theory, the plaintiff speculated that when the Deceased’s financial situation deteriorated and was at the lowest point of his life in 1994, Madam Liu divorced him, and in 1997 when the Deceased’s financial situation improved, Madam Liu came back to remarry him.

(2)  The Deceased did not genuinely love Madam Liu and he treated her as a prostitute only.

The plaintiff suggests that by reason of such relationship it could be inferred that the 1^st defendant was only granted a licence to stay on the Land by the Deceased.

49.  One of the matters to be decided by the court in relation to the above allegations of the plaintiff is whether the 1^st defendant actually left the Land and did not live with the Deceased from the time of divorce in 1994 to remarriage in 1997.

50.  The 1^st defendant’s evidence in this respect is clear, uncontradicted, inherently probable and supported by the contemporaneous letter written by the 1^st defendant to the Deceased in 1995 (“D1’s Letter”):

(1)  The daughter had left Hong Kong for studies in the US in 1992 and the Deceased supported her living by providing $8,000 per month.

(2)  The divorce was only a sham so as to facilitate an adoption by the 1^st defendant’s mother of the Daughter in the US so that the Daughter can apply for emigration to the US.

(3)  Despite the divorce, the 1^st defendant never left the house on the Land and the 1^st defendant continued to live together with the Deceased.

(4)  It was when the 1^st defendant’s mother reminded the 1^st defendant of the need to protect herself and her status as wife that the 1^st defendant suggested to the Deceased to get remarried, which the Deceased agreed and they registered marriage again in 1997.

51.  I agree that D1’s Letter lends strong support to the 1^st defendant’s case for the following additional reasons:

(1)  From the opening paragraph of the D1’s Letter, it is clear that she was living with the Deceased on the Land at the time when the letter was written.

(2)  The 1^st defendant signed off D1’s Letter with “老婆字”, which shows that the Couple treated and addressed each other as married couple.  If D1’s Letter was written during the period between 1994 to 1997, that would clearly support the 1^st defendant’s case that the divorce was a sham.

(3)  D1’s Letter was on the balance of probabilities written in 1995 or thereabout.  On the plaintiff’s own case, PW2’s evidence is that D1’s Letter was given to him by the Deceased in 1995.  This is corroborated by the 1^st defendant’s evidence that it was written around 1995 and when the Daughter was back from the US for holidays.  The other telling feature is that D1’s Letter was written on a writing paper pad with the figure “1995.9” printed at the bottom.  The inference is that the paper was part of a writing pad issued in 1995.  All the above supports the fact that the D1’s Letter was written in about 1995.

52.  The plaintiff’s general allegation that the 1^st defendant was only going after the Deceased’s money is really speculative without any concrete supporting evidence and worst still it is against common sense and is inherently improbable:

(1)  The 1^st defendant came to know the Deceased when she was about 20 years old and cohabited with him and later got married with him and had been living with him since 1980 for the whole of the rest of his life.

(2)  From the general picture which was not disputed by the plaintiff, the Deceased had the bad habit of gambling and drug taking, which the 1^st defendant came to know after co-habiting with the Deceased.  It is common ground that the Deceased suffered from bad health with asthma.

(3)  It is also common ground that the Deceased could not be wealthy at all with no landed properties under his name and had to occupy land of others.  He at the end of his life did not manage to save any money and his estate consists only of the interest in the subject Land.  It is true to say that the Deceased had never been well off and was penniless when he died.

(4)  Despite all the above and even after discovering all the circumstances of the Deceased, the 1^st defendant chose to give birth to a daughter of the Deceased and had taken care of the Deceased as his wife until his death.

(5)  Throughout the marriage with the Deceased there is no evidence produced and it must be a fact that the 1^st defendant did not get anything of value out of the marriage and relationship with the Deceased.

(6)  Not only that the 1^st defendant had not left the Deceased and spent all her youthful and prime time of her life with the Deceased, the 1^st defendant took good care of the Deceased without any assistance from the children of the Deceased until he died.

53.  Contrary to the plaintiff’s allegation, the 1^st defendant stayed with the Deceased despite the family’s harsh financial situation and despite the Deceased’s long and continuous gambling and drug addiction.  In fact, the 1^st defendant was the only person who took care of the Deceased after the plaintiff and his siblings left the Land in early 1990s, this was accepted by the plaintiff during his cross examination.  The fact that the 1^st defendant had stayed with the Deceased for all his life through thick and thin shows that their relationship is a genuine husband and wife relationship based on love and affection.

54.  The plaintiff also went so far as to suggest that the Deceased did not treat Madam Liu as a true wife and to belittle their relationship to the extent that the plaintiff alleges that the Deceased treats Madam Liu as a prostitute (當叫雞), the Deceased gave $8,000 to Madam Liu as “salary” for “serving” (“服侍”)  him and that the Deceased did not wish Madam Liu to have a share of the Estate.

55.  However, I agree that the objective evidence adduced at trial shows that the above hurtful assertions cannot be true:

(1)  On the documentary evidence adduced by the plaintiff, the Deceased did not make any negative comments about Madam Liu.

(2)  On the evidence of the plaintiff, the Deceased chose not to attend the plaintiff’s wedding as he did not want to upset Madam Liu.  If the Deceased had such a traditional and authoritarian personality as portrayed by the plaintiff, and if he treated Madam Liu as simply a prostitute, he would no doubt have gone to the plaintiff’s wedding (a traditionally important event)  without caring about Madam Liu’s feelings.

(3)  The Deceased went to the place of Madam Liu’s friend to ask Madam Liu to return to the Land with him and promised Madam Liu that he would quit gambling and taking drugs.

(4)  Madam Liu said she would collect the money earned from the fish breeding business if she was on the Land; further the money earned from the fish breeding and car park business was put in the drawer in the family home on the Land for both Madam Liu and the Deceased to use for family expenses (無分彼此).

56.  The evidence before the court plainly shows that the relationship of the Deceased and Madam Liu was a normal relationship of husband and wife based on love and affection.

F1(g).  Conclusion on whether the 1^st defendant was a joint squatter or a mere licensee of the Land

57.  I agree that the 1^st defendant’s case had been consistent from start to finish.  The 1^st defendant’s joint management of the business with the Deceased is supported by the evidence of DW2, a truly independent witness with no interest at all in the Land and in this litigation.  DW2’s evidence in court is consistent with his account in his witness statement and unshaken in cross-examination.  He said both the 1^st defendant and the Deceased would discuss with him the amount of his fees for helping them transport their fish to the market and other matters relating to the fish breeding business on the Land.  After the Fishpond was reclaimed, DW2 would put his trucks and fish feeds on the Car Park after seeking permission from either the Deceased or Madam Liu.  This truly independent evidence corroborates the 1^st defendant’s evidence and demonstrates that the Couple were actually jointly responsible for and did conduct their family business as husband and wife with no superior rights one over the other.

58.  In conclusion, the plaintiff has failed to prove that Madam Liu was a mere licensee of the Land.  I find that Madam Liu was a joint squatter of equal right on the Land, the Deceased and Madam Liu both had physical possession of the Land, without one being a licensee of the other.

59.  Madam Liu jointly possessed the Land with the Deceased from 1980 to 2000 and thereafter solely and adversely possessed the Land until 2009.  Applying U Po Chu v Tsang Pui Ling, supra, the squatters title to the Land was held by both Madam Liu and the Deceased jointly with equal rights.  The Estate and Madam Liu are therefore jointly entitled to occupy the Land.

60.  After the death of the Deceased, from 2000 to 2006, the 1^st defendant continued to occupy and live on the Land solely.  Since about 2006, Madam Liu ceased to reside on the Land, but she continued to keep the keys to the Land and the house therefore continued to be in constructive possession thereof.  Madam Liu mistakenly handed over the Land to the plaintiff in 2009.  However, by reason of the accrued squatter’s right of the Madam Liu of her own, she is entitled to continue to possess the Land jointly with the Estate.  At the time of commencement of this action in 2007 the plaintiff did not have a valid cause of action to evict the 1^st defendant and the position would not have been changed by the event in 2009.  The plaintiff has wrongfully ousted Madam Liu from the Land since early October 2009.

F2.  Birkenhead’s title already extinguished in 1982 so that Madam  Liu could not adversely possess the Land?

61.  In further response to the 1^st defendant’s case based on adverse possession on her own right, the plaintiff points out that the 4 unities of time, title, interest and possession for joint tenancy are missing.  In particular, as regard unity of title, each joint tenant must take title to the land under the same act or document.  This requirement is satisfied if all the tenants acquired their rights by the same conveyance or if they simultaneously took possession of land and acquired title to it by adverse possession.

62.  The plaintiff further submits that the Deceased was already in adverse possession of the Land in 1962.  Counting from 1962 for purpose of the present discussion, he would have, by his continuous adverse possession of over 20 years from 1962 to 1982, extinguished the title of Birkenhead in 1982.

63.  The plaintiff goes on to submit that even assuming that the 1^st defendant started her adverse possession as from 1980 against Birkenhead, Birkenhead’s title was already extinguished by the Deceased in 1982.  As from 1982, Birkenhead had no title for the 1^st defendant’s “adverse possession” to “defeat”.  The 1^st defendant could not have been a “squatter” vis-a-vis Birkenhead for adverse possession purposes.

64.  In dealing with this argument, first of all, it should be pointed out that there is no finding in the Judgment in the 1992 Action that the Land had been possessed by the Deceased in 1962.  The only holding was that possession had begun “since before 10 September 1972” (see: Birkenhead Properties and Investments Ltd v Leung Chi Cheong, HCA 6145/1992 (unrep, 2 February 2011), §§119&123).

65.  Further, in my view, even if the title of Birkenhead had been extinguished vis-a-vis the Deceased before the 1^st defendant came into possession as tenant-in-common, it would not prevent the 1^st defendant from acquiring her own possessory title by adverse possession.

66.  In this regard, the 1^st defendant cited the case of Fairweather v St Marylebone Property Co Ltd [1963] AC 510 for the proposition that the effect of the “extinguishment” sections of the limitation statute, was, that when a squatter dispossessed a lessee for the statutory period, it was the lessee’s right and title as against the squatter that was finally destroyed, and not his right or title as against persons who were not and did not take through the adverse possessor.  The lessee’s estate as between himself and the lessor was not destroyed.  That, therefore, the lessee was in a position to surrender to the lessor the encumbrance on the fee simple in possession which was represented by the term of years.

67.  Accordingly, in my view, the 1^st defendant correctly submitted that:

(1)  Birkenhead’s right and title was only extinguished as against the Deceased, but not as against the whole world, in particular, persons who did not take through the Deceased.

(2)  The 1^st defendant’s position is that she acquired her possessory title through adverse possession vis-a-vis Birkenhead and not through the Deceased.

68.  As to the plaintiff’s point that the 1^st defendant could not have held the Land as a joint tenant as she did not take possession of the Land with the Deceased simultaneously, the 1^st defendant correctly submitted that in the context of adverse possessors’ rights, joint adverse possessors have joint rights as either “joint tenants” or “tenants in common” as in the case of any other interests in land (see §12-007 and 12-012 of Megarry & Wade The Law of Real Property, 9^th Edn).  The plaintiff has not disputed that proposition in law.  When more than one squatter have possession jointly and simultaneously, the title acquired is held by the squatters jointly (Powell v McFarlane, at p 470).  In those circumstances, vis-a-vis the whole world including the owner, adverse possession is by one single and joint unit.  Each of the possessors can defend the owner’s suit to recover possession.

69.  Based on the findings made at section F1 above, I find that for the period from 1980 to 2000, the 1^st defendant jointly and adversely possessed the Land together with the Deceased as “tenants in common” in equal shares.  The 1^st defendant’s squatter title co-existed with that of the Deceased.  Neither of them was a licensee to the other.

70.  After the Deceased’s death and in 2000 to 2009, there is no dispute that the 1^st defendant was the only person in physical possession of the whole Land and hence continued with her adverse possession in her own right.

G.  CONCLUSION AND DISPOSITION

71.  For the reasons set out above, I find in favour of the 1^st defendant’s primary case that she has a squatter’s title in her own right as a tenant in common with equal share with the Estate.

72.  At trial, counsel for the 1^st defendant made clear that her claim based on common intention constructive trust/proprietary estoppel would only arise if the court rejects the 1^st defendant’s case based on joint adverse possession, so too is the claim based on the IPFDO.  They are true alternatives to the 1^st defendant’s primary case.

73.  Accordingly, I make no finding on the 1^st defendant’s case based on common intention constructive trust/proprietary estoppel and/or the IPFDO.

74.  I grant the following order:

(1)  A declaration that the 1^st defendant has acquired a good possessory title to the Land by reason of her own adverse possession thereof since 1980.

(2)  A declaration that the plaintiff holds the possessory title to the Land (as declared in the 1992 Action)  on trust for the 1^st defendant and the Estate as joint owners thereof as tenants in common in equal shares.

(3)  An account of all rental and/or other income received by the plaintiff and/or the Estate in respect of the Land for half share for the period from early October 2009 until the time when the 1^st defendant could re-enter the Land, and payment of the same forthwith to the 1^st defendant.

(4)  The plaintiff’s claim against the 1^st defendant be dismissed.

75.  I further order that the costs of these proceedings (including all costs reserved, if any)  be paid by the plaintiff to the 1^st defendant, such costs are to be taxed if not agreed.  The 1^st defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

76.  The above order as to costs is nisi and shall become absolute in the absence of any application within 21 days to vary the same.

77.  Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.

Mr Tommy Lo, instructed by Messrs W K To & Co, for the plaintiff

Mr Erik Shum, and Ms Christy Wong, instructed by Messrs Hobson & Ma, assigned by the Director of Legal Aid, for the 1^st defendant