CACV 18/2022, [2023] HKCA 1322
On Appeal From [2021] HKDC 482
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 18 OF 2022
(ON APPEAL FROM DCCJ NO. 3791 OF 2016)
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BETWEEN |
| | TSANG WOON MING（曾煥明） | Plaintiff |
| | and | |
| | TSAN HING TAT HEIDI（曾慶達） | 1st Defendant |
| | TSANG HING KWONG THOMAS（曾慶光） | 2nd Defendant |
| | YAP HENRY FAT SUAN（葉發旋） | 3rd Defendant |
| | YAP HENRIETTA CHUN WAH（葉俊華） | 4th Defendant |
| | YAP JASON CHUN YING（葉俊英） | 5th Defendant |
| | YAP CHUN HUNG ALEXANDER (葉俊雄) | 6th Defendant |
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| Before : | Hon Chu VP, Cheung and G Lam JJA in Court |
| Date of Hearing : | 14 November 2023 |
| Date of Judgment : | 4 December 2023 |
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J U D G M E N T
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Hon Chu VP :
1. This is the plaintiff’s appeal against the judgment of His Honour Judge Simon Leung given on 27 April 2021. The Judge dismissed the plaintiff’s adverse possession claim and entered judgment for the defendants on their counterclaim for an order for possession of the Lot (as defined in [4] below) against the plaintiff. The Judge’s holdings that are directly relevant to this appeal are that: 1) the plaintiff’s possession which commenced in 1984 was jointly with his mother, and he had failed to establish his possession, with the requisite intention to possess, was in his own name and on his own behalf to the exclusion of the world at large; and 2) the occupation of the Lot by the plaintiff’s family was with the implied consent or licence of the owners.
2. The appeal was brought pursuant to leave granted in the first place by Yuen JA on 31 December 2021 (which covers Grounds 1 to 5 in the Amended Notice of Appeal), and subsequently by G Lam and Chow JJA on 24 March 2023 (which covers Grounds 6 to 9 in the Amended Notice of Appeal). At the hearing before us, Mr. Chain for the plaintiff confirmed that Grounds 2, 3 and 4(1) and (6) in the Amended Notice of Appeal would not be pursued. The focus of his challenge was on the Judge’s holdings stated in [1] above.
3. The pivotal issue in the determination of this appeal relates to the Judge’s conclusion that the occupation of the Lot by the plaintiff and his family was with the implied consent or licence of the owner(s). I have the benefit of reading in draft the judgments of Cheung and G Lam JJA. I agree that the plaintiff’s challenge to the implied consent or licence issue cannot stand. On the evidence and facts as found by the Judge, an inference can properly be drawn that the initial occupation of the Lot by the plaintiff’s family was with the permission and consent of Tsan Yung, and that when Madam Luk became the registered owner of the Lot in 1981, she had given an implied licence to the plaintiff and his mother to occupy the land. I also agree that the appeal should be dismissed with the orders proposed by Cheung JA.
I. The appeal
4. The defendants are the registered owners of the property known as No. 141 in Demarcation District 313 in Tai O, Lantau Island, New Territories (‘the Lot’). The Lot consists of two houses, namely, House 158 and House 160 situated in Tai Ping Street, Tai O.
5. The plaintiff claimed that he has been in adverse possession of the Lot since 1984. The defendants denied that the plaintiff was in adverse possession and claimed that the plaintiff’s occupation of the Lot was by way of an implied licence. The case was heard by H H Judge Leung and the plaintiff’s claim was dismissed. Pursuant to leave granted by this Court, the plaintiff now appeals.
II. Background
6. The plaintiff gave evidence. His mother who is still alive had prepared a witness statement but did not give evidence because of her old age and ill health. Her witness statement was admitted as evidence. The defendants also gave evidence.
7. The plaintiff and the defendants are related. Their common ancestor is Tsan Hei. Tsan Hei had a number of children. For the purpose of this appeal it is sufficient to refer to two of the sons that are featured in this case. They are Tsan Yung and Tsang Tung. Tsan Yung was the eldest son. The defendants belong to Tsan Yung’s branch of the family while the plaintiff belongs to Tsang Tung’s branch of the family. The plaintiff is the son of Tsang Tung and Tsan Yung was his uncle. Both Tsan Yung and Tsang Tung had passed away. According to the land registration records, Tsan Yung acquired title to the Lot by way of a transfer of mortgage in 1916. In January 1969, Tsan Yung transferred the Lot to Yung Hing Investment Company Limited (‘Yung Hing’). Tsan Yung passed away in 1970. His son, Tsan Wah (or Tsang To Wah) died later, leaving his wife Madam Luk Yuk Lin (‘Madam Luk’). In September 1981, Yung Hing assigned the Lot, together with various other lots of land in Tai O, to Madam Luk, who simultaneously declared a trust to hold these properties for her three children (i.e. the wife of the 3rd defendant, the 1st defendant and the 2nd defendant).
8. In June 2014, Madam Luk passed away. By an assignment made in September 2015, the 1st, the 2nd and the 3rd defendants became co‑owners of the Lot. By an assent in December 2015, the 3rd defendant’s share in the Lot was formally assigned to himself and their children, the 4th to the 6th defendants. After the defendants became owners of the Lot in 2014, they discovered persons were occupying the Lot and their lawyers issued demand letter to the plaintiff to vacate the Lot in 2015, thereafter the plaintiff commenced the present proceedings.
9. Going back to the events in 1916, after Tsan Yung acquired the Lot, he caused the building structures to be erected on the Lot, which then housed Madam Tsan Wu, his mother i.e. the plaintiff’s grandmother (‘the Grandmother’), the plaintiff’s father and another brother of Tsan Yung. At that time, Tsan Yung apparently lived in the same street in Tai O. That other brother is said to have moved out and emigrated to Malaysia subsequently in the 1940s.
10. The plaintiff’s parents were married in 1943 and the plaintiff’s mother moved into the household at the Lot. The plaintiff’s father then worked in Kowloon. The plaintiff's mother looked after the Grandmother at home. There was one more member of the household, Madam Cheung Sui Fan (‘Cheung’), who was adopted by the Grandmother. However, the plaintiff regarded Cheung as his adopted elder sister and the plaintiff’s parents and Cheung continued to live at the Lot. The plaintiff and his four siblings were born there. The plaintiff is the third child and was born in 1949. The children were all raised at the Lot.
11. The Grandmother passed away in 1945. The plaintiff’s father died in 1955 when the plaintiff was six years old. The plaintiff’s mother and children then moved out of Tai O to Kowloon in 1957 in order to work and to attend school. In the meantime, Cheung continued to live at the Lot. The plaintiff’s family would return to Tai O during holidays and festive occasions when they would also stay at the Lot overnight. In 1966, the plaintiff’s mother decided to move back to Tai O and rejoined Cheung at the Lot. The plaintiff was then a civil servant working in Hong Kong. In 1984, Cheung passed away. The plaintiff decided to move back to Tai O to take care of his 60‑year‑old mother and he transferred his job to Lantau.
12. According to the plaintiff, House 158 is now used for storage, the structure behind it had collapsed and the debris was cleared by him when he returned there. House 160 contains the sitting room and its cockloft houses the bedrooms of his and his mother. The tile‑roof structure behind House 160 houses the kitchen and bathroom.
13. The plaintiff claimed that he had maintained and improved the building structures over the years. He produced invoices and receipts of the work on the Lot. He also produced utility bills including government rent and rate demand notes, electricity bills and telephone bills as evidence of his occupation of the Lot. His name, however, was not on these bills.
14. It is the plaintiff’s case that his mother told him that the Grandmother was very fond of her and had said that the plaintiff’s family could continue to live at the Lot without any consideration. This would be made during the few years before the Grandmother passed away soon after the war ended in 1945. When the plaintiff and his siblings were growing up, the plaintiff’s mother was also said to have mentioned to them the Grandmother’s express intention every now and then. The plaintiff further asserted in Court that his understanding was that the Grandmother actually gave the Lot to his mother.
III. The Judge’s finding
15. The Judge rejected the plaintiff’s claim that he has been in adverse possession of the Lot since 1984. He made the following findings :
1) The plaintiff has been in occupation of the Lot since 1984 but such occupation is jointly with his mother.
2) The Judge rejected the plaintiff’s contention that the Grandmother gave the Lot to the plaintiff’s mother who in turn gave it to him.
3) The Judge rejected the plaintiff’s contention that he, his mother and Cheung have the necessary intention to possess the Lot. Their occupation was pursuant to an implied licence granted by Tsan Yung which continued throughout the years.
4) The Judge also rejected the plaintiff’s alternative case of proprietary estoppel which is not an issue in this appeal.
IV. Grounds of Appeal
16. The focus of the plaintiff’s appeal is on the Judge’s finding that his occupation is pursuant to an implied licence. The first ground of appeal is that the Judge erred in finding that the plaintiff and his family members knew that Tsan Yung had acquired the title to the Lot in mid‑1910 in that 1) the finding was not supported by evidence. There is no evidence that the plaintiff or his family members, before commencing the present action, knew that Tsan Yung had been the owner of the Lot; 2) the Judge misunderstood [10] of the plaintiff’s witness statement dated 25 January 2019 in which he said his mother told him that the Grandmother with the assistance of Tsan Yung redeemed the Lot in 1916 (...祖母曾胡氏（已故）在伯父曾榕的協助下於1916 年贖回該地並在該地上建屋...); and 3) the evidence is that the plaintiff learned from his mother that the Grandmother was the owner of the Lot.
17. Mr. Chain for the plaintiff argued that based on these wrong findings, the Judge erred in finding that the plaintiff’s occupation at the Lot is referrable to an implied licence in his analysis. In particular,
1) the Judge should not have found in [89] of the Judgment that ‘the plaintiff’s father must realize that they came to reside at the Lot which was a family property (re)acquired by or through Tsan Yung after the mid‑1910s’;
2) there is no factual basis for implying a licence as the plaintiff and his family members did not know at all material times the true title owner of the Lot; and
3) there is further no legal basis for implying a licence as there must be overt acts on the part of the defendants to give rise to an implication by conduct which is absent from the present case; and the defendants did not even know they have interests in the Lot until the demise of Madam Luk.
18. Mr. Chain further argued that there are three sub‑issues arising from this issue which I have rearranged in this order :
1) Who carries the burden of proof on implied licence?
2) Whether the licensor needs to communicate the implied licence to the licensee?
3) The identity of the licensor.
19. There were other grounds of appeal for which leave to appeal was granted but Mr. Chain stated he would not rely upon them.
V. Principles
1) Adverse possession
20. There is no issue that the law on adverse possession is that as laid down by Slade J in Powell v McFarlane (1977) 38 P&CR 452 : to establish adverse possession of land the squatter must be shown to have both factual possession and the requisite intention to possess (‘animus possidendi’). Powell has been applied in Hong Kong by numerous decisions on adverse possession including the Court of Final Appeal’s judgment in Wong Tak Yue v. Kung Kwok Wai and Another (No. 2) (1997‑98) 1 HKCFAR 55. Powell was subsequently approved by the House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 where Lord Browne‑Wilkinson elaborated on the issue of adverse possession. At [35] he held that adverse possession in the relevant limitation legislation is defined as meaning the case where land is in the possession of a person in whose favour time can run. ‘It is directed not to the nature of the possession but to the capacity of the squatter’. At [36] he emphasised that the question is simply whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner. He further held :
‘ 37. It is clearly established that the taking or continuation of possession by a squatter with the actual consent of the paper title owner does not constitute dispossession or possession by the squatter for the purposes of the Act. Beyond that, as Slade J said, the words possess and dispossess are to be given their ordinary meaning.
38. It is sometimes said that ouster by the squatter is necessary to constitute dispossession: see for example Rains v Buxton (1880) 14 Ch D 537, 539 per Fry J. The word “ouster” is derived from the old law of adverse possession and has overtones of confrontational, knowing removal of the true owner from possession. Such an approach is quite incorrect. There will be a “dispossession” of the paper owner in any case where (there being no discontinuance of possession by the paper owner) a squatter assumes possession in the ordinary sense of the word.’
21. There is a difference in approach between Wong Tak Yue and Pye on the discrete issue of the squatter’s willingness, if asked, to pay the paper‑title owner while being in possession. However, this issue does not arise in this appeal.
2) Implied licence
22. A person in possession with the permission by way of implied licence of the paper title is not in adverse possession. Megarry & Wade, The Law of Real Property (9th Ed) summarised the position as follows :
‘ 7-029 ...... If a person is in possession of land with the permission of its owner, his possession cannot be adverse. That permission may be expressly given or it may be implied. The circumstances in which it will be implied have not yet been finally determined. There is a line of authority in which it has been held that:
(i) For there to be such an implication, there had to be some overt act by the landowner or some demonstrable circumstance from which it can be inferred that permission was given.
(ii) It was immaterial whether the squatter was aware of these matters but they must be probative of and not merely consistent with the giving of permission.
(iii) They had also to be such that a reasonable person would have appreciated that the user was with the permission of the landowner.
However, these cases rested upon a dictum in a decision on a prescriptive claim which had equated passive acquiescence with permission, and was subsequently discredited on appeal to the House of Lords. Accordingly, it has been contended (but not decided) that permission in the context of adverse possession requires a communication to the licensee, whether by writing, spoken words or conduct, that was intended to be and was understood as permission to do what would otherwise be trespass. Nevertheless, the propositions set out above in relation to the possibility of implied consent have been accepted as a correct statement of the law. The Privy Council [Smith v. Molyneaux [2016] UKPC 35] has held that permission can be implied, but need not be acknowledged by S; it is doubtful whether it has to be shown that S understood the relevant words or conduct to amount to permission.
Possession with permission, which can never be adverse, is quite different from possession in which the landowner acquiesces, which may be adverse. Whether or not permission once given has been revoked is a factual question. If a licence is given for a fixed period or until the occurrence of an event, possession may become adverse after that period has passed or the event has occurred. If permission is given indefinitely, but subject to conditions, possession remains permissive while those conditions continue to be met. Where the terms of the licence have to be implied, it may be an implied term that the licence continues until one party gives notice of its termination.’
23. More recently in Clarke v Swaby [2007] 2 P&CR 2, Lord Walker, sitting in the Privy Council on an appeal from Jamaica held at [11] :
‘ ......a person who is in occupation of land as a licensee cannot begin to obtain a title by adverse possession so long as his licence has not been revoked. Unless and until it is revoked, his occupation of the land is to be ascribed to his licence, and not to an adverse claim: see the opinion of the Board in Wills v Wills [2003] UKPC 84, citing the Board’s earlier opinion (delivered by Lord Millett) in Ramnarace v Lutchman [2001] 1 W.L.R. 1651, 1654:
“Generally speaking, adverse possession is possession which is inconsistent with and in denial of the title of the true owner. Possession is not normally adverse if it is enjoyed by a lawful title or with the consent of the true owner.” ’
VI. My view
24. Before I deal with the substantial ground that the Judge erred in his finding on implied licence, I will first address the three sub‑issues relied upon by the plaintiff.
1) Burden of proof
25. The parties accept that the plaintiff carries the legal burden that he is in possession of the Lot without the consent or permission of the paper‑title owner and the defendants carry the evidential burden of showing that his occupation of the Lot is by way of an implied licence. This concession accords with the law on adverse possession that the squatter has to show that he is dealing with the land as of right without the consent or permission of the paper‑title owner. This clearly puts the legal burden on the squatter that he is in factual possession with the intention to possess and the paper‑title owner carries the evidential burden that the occupation is with his permission and consent. This also accords with the concession made in Alston & Sons Ltd. at [58] :
‘ [58] It is agreed that although the burden of proving sufficient factual possession and intention to possess in on Alstons, the burden of proving an implied permission would be on Pauls.’
2) Communication of permission to the squatter
26. Mr. Chain submitted that the point referred to in Megarry & Wade which has ‘not (been) finally determined’ seems to be whether an implied licence requires a communication (to the licensee). Jourdan and Radley‑Gardner on Adverse Possession (2nd Edition) stated that there are currently two views on the issue of communication in determining whether a licence is to be implied.
‘ 35-20 ...There are two candidates :
1 In order to establish a licence, there must be a communication, in writing, by spoken words or by overt and unequivocal conduct, that was intended to be understood, and was understood, as a permission to do something that would otherwise be an act of trespass.
2 In order to establish a licence, two matters must be established. First, there must have been some overt act by the land owner or some demonstrable circumstances from which the inference can be drawn that permission was in fact given. It is, however, irrelevant whether the users were aware of those matters. Second, it must be established that a reasonable person would have appreciated that the user was with the permission of the land owner.
35-21 The first test is derived from the speech of Lord Walker in R (on the application of Beresford) v Sunderland City Council [2004] 1 AC 889. The second test is derived from the decision of Smith J at first instance in that case ([2001] 1 WLR 1327). Even though her decision was reversed by the House of Lords, the test she formulated for deciding if a licence should be implied was applied in a series of adverse possession cases, discussed below, although in none of them was the Court informed that her decision had been overruled. For the reasons explained below, it is considered that the first test is the one that ought to be applied.’
27. Mr. Chain, who did not appear below, submitted that there is no evidence that there was any communication of permission by the defendants/owners. He accepted that the plaintiff had not raised the issue of communication before the Judge but argued that the requirement of communication is a matter of law and he is entitled to raise this issue on appeal. I disagree. The appeal is from the District Court pursuant to leave granted by this Court. It is clear that this specific issue had never been identified in any of the proposed grounds of appeal. Furthermore, if the issue was raised below, then clearly there would have been evidence adduced in response to the allegation that there was no communication of permission. I am not prepared to allow the plaintiff to raise this topic on appeal. Even if, without deciding, communication is required, I am of the view, as discussed below at [34], that the requirement is satisfied as apparent from the Judge’s finding.
3) Identity of the licensor/No evidence of implied licence
28. I will deal with the identity issue together with the plaintiff’s challenge that there was no evidence to support the finding of implied licence.
(1) The plaintiff’s submission
29. Mr. Chain submitted that given the lapse of time, the evidence is scarce: the defendants knew virtually nothing and the plaintiff fairly limited. The defendants relied on the family background and relationship of the parties. The chain of title is documented. Tsan Yung became legal owner in 1937 by a vesting order, but there is no evidence on what led to that. There is also no evidence on i) what happened between the transfer of mortgage and the vesting order, ii) who was in occupation in 1916, iii) who built the house, iv) the circumstances leading to Tsan Yung assigning to Yung Hing (a company which Tsan Yung was not even a majority shareholder), and v) what the shareholders/directors of Yung Hing, and later Madam Luk knew and what, if anything, Tsan Yung told these shareholders/directors. No record from Yung Hing was put in evidence and Madam Luk apparently told no one, certainly none of the defendants, about the Lot. In 1969 Tsan Yung assigned the Lot to Yung Hing in unknown circumstances. There is no evidence Yung Hing ever ‘dealt with’ the Lot, which was one of many assigned by Tsan Yung to Yung Hing, and it is doubtful whether apart from Tsan Yung, Yung Hing and Madam Luk even knew they owned the Lot. Assuming, without conceding that the Grandmother knew that her original occupation was pursuant to a licence granted by her son, Tsan Yung, that licence came to an end when Tsan Yung assigned the Lot to Yung Hing in 1969: Terunnanse v Terunnanse [1968] AC 1086 at page 1095. Thereafter there is no evidence of any further licence being granted, certainly no evidence that it was communicated to the plaintiff’s mother or the plaintiff. The Judge made no specific finding. What he did was to recite the evidence of the plaintiff. The Court only acts on evidence and not speculation and the above circumstances may at best be consistent with an implied licence but not probative of it. What happened after the 1969 assignment to Yung Hing is mere passive acquiescence, and that in law does not stop time from running. On the plaintiff’s (and his mother’s) part, there is no evidence that they even knew Tsan Yung was the owner. The same has not even been put to the plaintiff in cross‑examination. Mr. Chain further submitted that whatever consent Tsan Yung had given to the Grandmother to occupy the Lot this came to an end on her death.
(2) Overt act/demonstrable circumstance to infer implied licence
30. The Judge was aware of the requirement of an overt act for the purpose of establishing an implied licence granted by the paper‑title owner. I will refer to the part of the judgment where he found the presence of the implied licence :
‘ 89. As mentioned, the Grandmother (and later Cheung as well) and the plaintiff’s father must realize that they came to reside at the Lot, which was a family property (re)acquired by or through Tsan Yung after the mid‑1910s. Tsan Yung must therefore have knowledge and consent about the occupation of the Lot by his mother’s household. He must also know the entry of the plaintiff’s mother, by virtue of her marriage with the plaintiff’s father, into the household on the Lot in 1943. There is no reason for believing that that was anything but an extension of the pre‑existing basis on which plaintiff’s father managed to reside there. This is reinforced by what happened after the passing of the plaintiff’s father in mid‑1950s.
90. Therefore, that the occupation of the Lot by the members of this household had never been interfered with was only consistent in the circumstances from the outset. That the occupation of the Lot by the plaintiff’s family (and Cheung) after the passing of the plaintiff’s father in the 1950s never came about as a topic during the interactions between the plaintiff’s mother and Tsan Yung’s family, as it was confirmed by the evidence in court, was also consistent in the circumstances.
91. Insofar as the property right to the Lot is concerned, Madam Luk entered into the picture as a shareholder of the family company of Yung Hing upon the assignment in 1969. Such assignment did not alter the nature of the Lot as a family property. Tsan Yung himself remained a shareholder. Madam Luk remained a shareholder of Yung Hing until the latter assigned the Lot, together with other properties in Tai O, to Madam Luk in 1981 to hold on trust for her children. All those happened when the Lot was still occupied by Cheung and, since 1966, the plaintiff’s mother as well.
92. According to both the plaintiff and the defendants, Madam Luk had not been seen visiting the Lot or even Tai O. According to the defendants, Madam Luk did not even mention to them the family wealth including the lots of land in Tai O. However, the circumstances suggest that she should be aware of the Lot and its occupation by the plaintiff and his mother.
93. Madam Luk was the daughter-in-law of Tsan Yung. As a member of Tsan Yung’s family, she had social interactions with the plaintiff’s mother throughout the years. As the plaintiff’s mother claimed (in her statement), she would mention to Madam Luk her joy of witnessing the plaintiff becoming a civil servant in the 1960s. Madam Luk maintained telephone contact whereby the plaintiff’s mother would inform Madam Luk of the life of the plaintiff’s family in the Lot and Tai O. The plaintiff also clearly recalled one episode in 1986‑1987 when Madam Luk telephoned him at Tai O, and asked for his assistance to address the request by the Tai O rural committee to remove a problem tree at a lot that she held at Shatin Village, Tai O. The plaintiff reckoned that she thought that he could be of assistance, being both a resident at Tai O and a civil servant at the Agricultural and Fisheries Department there. Indeed, the plaintiff deployed his connection and arranged workers to remove the tree, and thus satisfactorily resolved the matter for Madam Luk then. All those interactions sufficed to bring the plaintiff’s mother to say in her witness statement that her family was closely related to the family of Tsan Yung, who acquiesced her family’s occupation of the Lot.
94． That said, the plaintiff in the same statement of his somehow suggested the (alternative) understanding that Madam Luk had abandoned the Lot. There is really no place for the contention of abandonment. From the perspective of Madam Luk, abandonment of right to any of the lots transferred to her in 1981 for the benefit of her children under the trust would be a non‑starter as a matter of fact. From the perspective of the plaintiff and his mother, it is also unlikely that either of them would have obtained the impression that the Lot was abandoned when the plaintiff’s mother and Madam Luk, who knew of their occupation of the Lot, had maintained all those telephone contacts throughout the years. Insofar as what might appear to be inaction on the part of Madam Luk is concerned, it is trite that an owner of land is not required to do anything to assert her property right: see Wong Tak Yue (above).
95. In line with the principles, as suggestion of understanding contrary to an intention of adverse possession, such statement of the plaintiff and his mother should be given due weight. That would suffice for the purpose of the defendants. Insofar as this is necessary, the circumstances, in my judgment, also afford the basis for implying a licence from the title owner of the Lot, starting from Tsan Yung, for the occupation of the Lot by the members of the family household known to them. Such consent or licence has since continued, notwithstanding the subsequent transfers of the Lot that never left the defendants’ branch of the Tsan family.
96. To assert adverse possession of the Lot against the above background, it would be up to the plaintiff to assert and to establish what he or his mother has done that unequivocally manifested to the world, including the paper title owner, an[a] unilateral change in the understanding on their part from before ie occupation with consent or licence: see Hong Kong Kam Lan Kook Limited (above); Cheung Chung Yan (above) at [22]; Cheung Leung Tak v Cheung Chi Hung & Anor [2018] 5 HKLRD 579 at [74].
97. The fact, as mentioned, was that the plaintiff’s mother (since 1966) and the plaintiff (since 1984) simply continued to occupy the Lot as before. They continued to pay the incidental utility expenses as before. The works that the plaintiff has caused to be done to the building structures, as mentioned, did not appear to exceed what would have been basic upkeep and maintenance necessitated by the passage of time to enable reasonable habitation by him and his mother. In the circumstances, the plaintiff fails to discharge such burden of proof.’
31. It is plain from the above that the Judge’s finding of an implied licence is based on findings of primary facts and inference drawn from the primary facts. There is no dispute that an appellant must overcome an extremely high threshold of showing that the finding of primary facts by the trial judge is plainly wrong before an appellate court will intervene. Similar restraints must be exercised regarding the challenge of inferences drawn by the trial judge. Kwan VP in the recent judgment of Redland Precast Concrete Products (China) Ltd v. Permasteelisa Hong Kong Ltd [2023] HKCA 1278 (10 November 2023) explained :
‘ 20. The appeal court exercises similar restraint in respect of findings of secondary fact drawn from findings of primary fact. Where a judge draws inferences from findings of primary fact which have been dependent on his assessment of the credibility or reliability of witnesses, who have given oral evidence, and of the weight to be attached to their evidence, an appeal court may have to be similarly cautious in its approach to his findings of such secondary fact and his evaluation of the evidence as a whole. The “plainly wrong” test is applicable unless the finding of fact is based purely on inferences, or otherwise has nothing to do with the witnesses’ demeanour or the trial judge’s having received the evidence at first hand. “Plainly wrong” in the context of an appeal against a finding of fact directs the appeal court to consider whether it was permissible for the trial judge to make the findings of fact which he did in the face of the evidence as a whole, and the appellant is required to identify a mistake in the judge’s evaluation of the evidence that is sufficiently material to undermine his conclusions.
21. Where the inference of the trial judge was made not on primary fact (as discussed above) but was based on an evaluation of facts which involved the assessment of a number of factors weighed against each other, this is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and appeal courts would approach them in a similar way and would not interfere unless satisfied that the judge’s conclusion lay outside the bounds within which reasonable disagreement is possible.’
32. I will deal first with the plaintiff’s contention that there was no evidence that the plaintiff and his family knew Tsan Yung had acquired the title to the Lot and the Judge had misunderstood the witness statement of the plaintiff and his mother. The oral evidence of the plaintiff certainly shows that he accepted that the two houses on the Lot were built by Tsan Yung. In my view, the Judge was entitled to come to this view on knowledge by reference to the circumstances of the case. The Judge held :
‘ 71. The defendants’ contention in respect of consent by their branch of the Tsan family is not without basis. Whilst the plaintiff claims no actual knowledge about the title to the Lot and its devolution, one thing that the plaintiff’s parents, and he, have learned about in this respect was factually accurate. That was the fact that Tsan Yung acquired the title to the Lot in mid‑1910 (or 1916 to be precise). That was precisely when and how the Grandmother (ie mother of Tsan Yung), the plaintiff’s father and the plaintiff’s another uncle came to be able to occupy the Lot by residing in the building structures erected there. Such arrangement for the occupation of the Lot by the Grandmother’s household must be known and approved by Tsan Yung, her son. Further, with the then address of Tsan Yung was also in the same street, it will be unrealistic to suggest otherwise.’
33. Tsan Yung clearly played a prominent role in the affairs of Tsan (Tsang) family and was its patriarch. He was the eldest son of the clan. After the houses were built, his mother (i.e. the Grandmother), Cheung, his mother’s adopted daughter and his younger brothers (which included the plaintiff’s father) moved into these houses. Whilst details of how Tsan Yung acquired the title was not clear, there can be no dispute that he acquired an interest in the Lot in 1916. The official records showed that on 4 February 1915 the Lot was mortgaged by one Chung Kau as mortgagor to Lau Sin Pui as mortgagee for $500 which was repayable on 5 February 1916. The mortgage was then transferred to Tsan Yung on 14 August 1916 from Lau Sin Pui and he was paid $500. By this time, the repayable date of the $500 by Chung Kau had lapsed. The Land Registration records further showed that the Lot became vested in Tsan Yung by vesting order under Action No. 191/1937. The registration of this action in the Land Registry was on 11 December 1937. In a remote area like Tai O and in the context of the Tsan family, it would be most surprising that the plaintiff’s family would not have known that Tsan Yung was the owner of the Lot and their occupation in the houses was with the permission of Tsan Yung who was instrumental in regaining the family asset and the eldest of the male line. The overt act and demonstrable circumstance to infer an implied licence started with the historical background of Tsan Yung acquiring the Lot, building the houses and letting the plaintiff’s father move into the houses in 1916 together with the Grandmother and others. The proper inference which the Judge found is that it was Tsan Yung who gave the permission not only to the Grandmother but also to the other family members living there. This permission continued with the later events of the plaintiff’s mother moving into houses after marrying the plaintiff’s father, the birth of the plaintiff and his growing up there. The plaintiff’s father died early and the plaintiff’s family had fallen on hard times. It was Tsan Yung who helped them by providing them with money to live and study. The inference is that the occupation of the plaintiff’s family was not merely by an acquiescence on Tsan Yung’s part but rather a permission by him who was looking after his own elderly mother and his younger siblings. The permission continued with the plaintiff’s occupation of the houses after moving back there in 1984 despite the change of ownership.
34. Regarding the argument that a revocable licence may be terminated by law on the conveyancing of the land or death of the licensor, in my view, the whole of the circumstances must be looked at. I do not regard the change in 1969 when Tsan Yung sold the Lot together with other properties in Lantau to Yung Hing would in any way affect the permission granted to the plaintiff’s family. Tsan Yung was a director and a shareholder of Yung Hing. The other two directors were his sons Tsan To Wah and Tsan To Piu. The other shareholders consisted of the children of Tsan Yung, his wife, the wife of his son (Madam Luk the wife of Tsan To Wah) and one Tsan Cheung Wing Tao who shared the same address as Tsan Yung’s other son Tsan To Piu. In other words, Yung Hing is a family company of the Tsan Yung clan. In the context of a Chinese family with a history of the eldest brother looking after his younger siblings, it would be most odd that the permission given to the plaintiff’s family would not have continued by Yung Hing. In other words, the inference is that a new licence was granted by Yung Hing to the plaintiff’s family. Likewise, in my view, the assignment by Yung Hing in 1981 of the Lot to Madam Luk would not have affected the permission given to the plaintiff’s family to stay at the Lot. One must again consider the contextual background and the interaction between Madam Luk, who became owner of the Lot in 1981, and the plaintiff’s mother and the plaintiff himself, which the Judge had analysed at [93] of his judgment. Again the inference is that Madam Luk had granted a new licence to the plaintiff’s family. I disagree with any suggestion that Madam Luk would need to tell the plaintiff’s mother and the plaintiff words to the effect that their occupation was with her permission, having considered the history of the matter and the relationship of the parties. This is not a case of a stranger occupying another person’s land. I further disagree with the suggestion that Madam Luk might not even know that she owned the Lot. In my view, she must have knowledge of the Lot bearing in mind the Lot together with other properties were transferred to her and the subsequent resumption and litigation concerning some of these properties. In my view, time did not run in favour of the plaintiff during Madam Luk’s lifetime. At most it began to run after her death in 2014 which is insufficient for the plaintiff to acquire title.
35. Although the Judge did not expressly refer to the above events to be the overt acts or demonstrable circumstances to infer the implied licence granted by Tsan Yung or Yung Hing or Madam Luk as the licensors, considering the tenor of the judgment this must be what he had intended.
36. Further, one could infer from the whole of the circumstances that the communication was by these overt acts which was intended to be understood and was indeed understood by the plaintiff and his parents that their occupation was by way of permission and not otherwise. Further, in so far as may be necessary, a reasonable person would have appreciated that the plaintiff and his family’s occupation of the Lots was with the permission of the land owner beginning with Tsan Yung.
37. Mr. Chain had submitted that Tsan Yung had only given consent to the Grandmother to occupy the Lot. In my view, the Judge was entitled to find that the permission was given to the plaintiff’s family as well. After the death of the Grandmother, the plaintiff’s family and Cheung continued to live there as before as indicated above and there is no conceivable reason why the consent should cease upon the Grandmother’s death.
38. In my view, the plaintiff has not been able to cross the threshold in challenging the Judge’s decision on implied licence.
VII. Joint possession
39. The plaintiff also challenges the Judge’s finding that he was in joint possession with his mother. The Judge held :
‘ 83. If anything, the plaintiff, in my judgment, returned to join his mother in occupation of the Lot, which the mother has been occupying together Cheung for the last 18 years since her return there in 1966. Any assertion that the plaintiff did so with the intention to possess the Lot on his own behalf to the exclusion of the others, and not jointly with his mother, would require much objective evidence of manifestation.’
40. Again, in my view, the plaintiff is not able to show that the Judge is plainly wrong in this finding.
41. The Respondents’ Notice of the defendants seeks to, inter alia, affirm the Judge’s decision on joint possession. As the plaintiff fails in his challenge on this point, all that I need to say is this. This Court in Leung Chi Cheong v Liu Che Wun [2022] 4 HKLRD 633 discussed the issue of joint possession where, unusually in that case, different parties at different times were in possession of the land. The present case is not such a situation. Where the squatter himself is the only named party but the finding is that the squatter and his family members are in adverse possession of the land jointly, this will not be fatal to the squatter’s claim. As suggested by Jourdan and Radley‑Gardner at [7‑46], the right course would have been to make a declaration to that effect i.e. the squatter and his family acquired a title by adverse possession and not to declare the paper‑title owner has title.
VIII. Conclusion
42. The plaintiff’s appeal is dismissed.
43. There will be an order nisi that the plaintiff is to pay the defendants’ costs of the appeal but confined to the engagement of one counsel. There will be no order as to costs on the Respondents’ Notice. The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.
Hon G Lam JA :
44. I agree the appeal should be dismissed and, subject to what I add below, I agree with the judgment of Cheung JA. On the issue of implied licence, I would proceed on the basis that as a matter of law, the licence given by Tsan Yung to the plaintiff’s family and Cheung terminated in 1969 when Tsan Yung assigned the Lot to the company Yung Hing, and that any licence given by Yung Hing also ended in 1981 when it in turn assigned the Lot to Madam Luk: see Terunnanse v Terunnanse [1968] AC 1086, 1095-1096; Ho Hang-wan v Ma Ting-cheung as Personal Representative of Ma Sz-tsang, deceased [1990] 1 HKLR 649.
45. The Judge said the ‘consent or licence’ continued notwithstanding the transfers of the Lot (see Judgment, at [95]) but it seems to me what he meant was that the consent or licence from Tsan Yung’s side of the family, which comprised all the shareholders and directors of Yung Hing and Madam Luk, had in fact continued. In other words, despite the automatic termination of the existing licence as a matter of law upon the assignment of the Lot by the licensor, in the Judge’s view a new licence granted by the assignee came into being as a matter of fact.
46. It is unnecessary to consider whether it was correct to hold that a further licence was given, expressly or implicitly, by Yung Hing to the occupants between 1969 and 1981, for the plaintiff did not begin the occupation that he relied on until 1984, when Madam Luk was the registered owner. The crucial question is whether Madam Luk gave any implied licence to the plaintiff’s family to occupy the Lot.
47. On this question the following uncontroversial facts or findings made by the Judge seem to me to be important. First, the Judge found that Madam Luk was aware of the Lot which she owned (Judgment, [92] and [94]). At the hearing Mr. Chain sought to suggest that Madam Luk was ignorant of her ownership of the Lot, but this was not open to him because not only was the point not raised in the grounds of appeal for which leave was given, it was also directly contrary to the plaintiff’s own case (see the plaintiff’s witness statement, at [35]). Indeed, Madam Luk had been engaged (with professional advisers) in negotiations with the Government since around 1997, and in litigation (LDMR 3/2005) since 2005, concerning compensation for land resumed in June 1997 in certain other lots in the same Demarcation District (D. D. 313) which she held by virtue of the same conveyance in 1981 as that relating to the Lot. Secondly, Madam Luk had not abandoned the Lot (Judgment, [94]). Thirdly, Madam Luk probably knew that the plaintiff’s family had been allowed in the past by her father‑in‑law, Tsan Yung, to live at the Lot (see the 1st defendant’s witness statement, at [15]). Fourthly, after she became the registered owner, Madam Luk was aware of the occupation of the Lot by the plaintiff’s mother and later the plaintiff. Specifically, she knew that in the 1980s the plaintiff moved back to the Lot to live with his mother (see the plaintiff’s witness statement, at [34]). Fifthly, Madam Luk enjoyed a good relationship with the plaintiff’s mother and also, it appears, with the plaintiff. She had maintained contact through mutual telephone calls in which the plaintiff’s mother would tell her about their life in the Lot and Tai O (Judgment, [93] and [94]). Sixthly, in around 1986 or 1987, Madam Luk herself telephoned the plaintiff at the Lot, knowing that he lived there, and sought his assistance in removing a tree on another lot in Tai O that she owned (Judgment, [93]).
48. By these contacts with the plaintiff and his mother, it seems to me Madam Luk was acknowledging their lawful presence and residence at the Lot, knowing that she owned it. In the circumstances of this case, any suggestion by Madam Luk that she could have, at any time before 2004 without first terminating her permission, brought an action against the plaintiff for mesne profits on the basis he had been trespassing on the Lot, would be quite unmeritorious. I take the view that there is evidence based on which the Judge could find an implied licence granted by Madam Luk to the plaintiff and his mother. There is insufficient basis for this Court to interfere with this finding.
(Carlye Chu)
Vice-President | (Peter Cheung)
Justice of Appeal | (Godfrey Lam)
Justice of Appeal |
Mr. Benjamin Chain, instructed by Zebra H. Y. Kwan & Partners, for the Plaintiff
Mr. Frederick H. F. Chan and Mr Dexter Leung, instructed by Keith Lam Lau & Chan, for the Defendants