Lam Sai Wan v Minloy Ltd

HCA 31/2014

[2018] HKCFI 1710

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 31 OF 2014

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JUDGMENT

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The plaintiff and the land

1. The plaintiff, Mr Lam, who is 90 years old, brings these proceedings asserting that he has, by way of adverse possession, extinguished the paper title to 46 lots in DD 331 at Cheung Sha, Lantau Island. Mr Lam says he has been occupying the 46 lots as his own since about 1959. In his statement of claim, Mr Lam identified the 46 lots by attaching a plan showing the specific lots over which he claimed to have extinguished the title by adverse possession.

2. The land in question is at the eastern end of Upper Cheung Sha Beach, and runs in a generally northerly direction from the beach to South Lantau Road. At its south-eastern corner is an outcrop of forested rock which separates Upper Cheung Sha Beach from Lower Cheung Sha Beach. The outcrop is generally known as Kam Dun Hill.

Identification of the 46 lots

3. One of the lots contained in the plan attached to the statement of claim is Lot 160 DD 331. The title documents to 45 of the 46 lots were in evidence. The title documents to Lot 160 were not in evidence, however it is clear from a Sale & Purchase Agreement (“SPA”) dated 19 December 1991, between Minloy, as purchaser by way of a mortgagee sale from Barclays Bank plc, that Lot 160 was included in the sale.

4. A separate plan identifying the 46 lots was prepared by the surveyor for Mr Lam. The lots are shown in the plan attached to this judgment [1]. All 46 lots are contained within an area of land which was known in the trial as the “Occupied Area”. It should be noted that the existence of the boundaries of the Occupied Area are disputed. The area within the Occupied Area, other than the defined 46 lots, and 4 lots referred to in §§7, 8 and 9, below are, I understand, unregistered Government land.

5. The location of the 46 lots within the Occupied Area, and the structures on those lots are not in dispute. For convenience of reference I have used the central area of the Occupied Area, and Lot 130, as a demarcation line between the area to the north of Lot 130, which I have called “the upper area” and the area to the south of, and including Lot 130, which I have called “the lower area”. Lot 130 and the lots to the south and south east of that lot constitute the lower area. The lots to the north and north west of Lot 30, (not including Lot 130), constitute the upper area.

6. The upper area contains 28 lots. All 28 are owned by Minloy.

7. The lower area contains 24 identifiable lots. They are Lots 127, 128, 130, 131, 134, 135, 137 – 142, 144 – 145, 154, 159, 160 – 163, 165 and 166.

8. Lot 132 was purchased by Mr Lam in May 1964 and on which he built a house.

9. Lots 128 and 131 are contained within the area shaded on the attached plan, and marked Yue Nam Villa, (嶼南小築). They are in a separate ownership and do not form part of this litigation.

10. Also within the lower area, on its western side (although not delineated on the attached plan, but on other plans in the evidence) are lots numbered 127, 134, and 135.

11. There was no evidence as to who held the paper title to lots 127 and 134, but they are within the Occupied Area. Those two lots are contained within the area Mr Lam claims to have farmed. As the paper title holders to those two lots were not before the court, I am not able to make any declaration in Mr Lam’s favour, or against him.

12. Of the remainder, Minloy now owns 18 lots including Lot 135.

13. In 1993, Minloy specifically asserted its title against Mr Lam over17 of the lots in the lower area. They comprise lots 130, 137 – 142, 144 – 145, 154, 159 – 163, 165 and 166. The lots over which Minloy asserted its title in 1993 did not include Lot 135 and the 28 lots in the upper area.

14. There is no evidence or explanation as to why Minloy did not assert paper title to the 28 lots in the upper area, or in respect of Lot 135, against Mr Lam, in 1993. The 28 lots in the upper area and Lot 135 are all included within the lots to which Mr Lam asserts extinguishment of title by adverse possession.

The history of the paper titles

15. An examination of the evidence of the titles to the 45 lots now with paper title in Minloy (the paper title to Lot 160 was not in evidence) reveals the following facts:

(1) Title to 28 of the lots [2] were acquired by Mr Shen Pei Min (“Mr Shen”) in February 1957, from a number of different owners.

(2) Title to 17 of the lots [3] were acquired by a person named Zung Sui Shen (“Mr Zung”) in either 1955 or 1956 from a person named Fung Shu Lan.

(3) All 45 lots were sold by Shen and Zung in either September or October 1978 to Hsu Huang Chung Ying (“Hsu”) (as to 70/100) and Yien Pao Ming (“Yien”) (as to 30/100).

(4) Virtually immediately, on 18 October 1978, the 46 lots were soldby Hsu and Yien, variously to 8 people Leung Lai Chun, Lee Lan, Lee Kam Hin, Shin Cham Sun, Shin Wing, Lam Mei Lin, Lam Yuk Chun, and Lam Lai Ha.

(5) On 20 October 1978, each of those owners, by separate conveyances in respect of the lots individually owned, but registered on the same day, transferred all 46 lots to Golden Day Investment Limited (“Golden Day”).

(6) On 7 August 1979, Golden Day transferred all 45 lots to Caborca Investments Limited (“Caborca”) who gave a mortgage to Barclays Bank plc.

(7) It may reasonably be inferred that Lot 160 passed through a similar chain as described above, ultimately falling into the ownership of Caborca, subject to a mortgage to Barclays Bank plc.

(8) On 19 December 1992, all 46 lots owned by Caborca were sold, by way of a mortgagee sale, by Barclays Bank plc to Minloy.

16. On 5 May 1964, Mr Lam acquired, from Lo Chun Wing and Fung Shu Lan, Lot 132 DD 331, a lot within the Occupied Area. Mr Lam built a house on that lot in which he lived with his family.

17. It will be noted that Fung Shu Lan was the vendor of 17 of the lots to Mr Zung, (see §15(2) above). Lo Chun Wing was not otherwise named in any of the titles to the 46 lots, either as a vendor to Mr Lam or Mr Zung, or as a purchaser from Hsu or Yien.

18. Neither Lo Chun Wing nor Fung Shu Lan gave evidence.

19. There was no evidence from either Mr Shen or Mr Zung, nor was there evidence from any of those to whom either Mr Shen or Mr Zung sold the 46 lots in 1978 (see §15(3) above).

20. There was no evidence from any representative of Golden Day.

21. It was not suggested to Mr Lam that any of the registered owners of the titles within the Occupied Area made any contact with Mr Lam nor in any way challenged Mr Lam’s adverse possession of the titles prior to August 1979, when the land was purchased by Caborca. I will deal with Caborca’s position in respect of asserting its paper title against Mr Lam separately.

22. In the course of the trial while Mr Lam was being cross-examined I selected at random several of the names referred to in §15(3) and (4) above, and asked Mr Lam if he knew any of those persons. He said that he did not.

The basis of Mr Lam’s claim

23. It must be noted that as Mr Lam claims adverse possession since 1959, the relevant period required to extinguish the paper title is 20 years. Consequently, he must establish adverse possession up until 1979/1980. It was not until 1991 that the required period was reduced to 12 years. In fact, on the evidence, Mr Lam asserts adverse possession for a period of 34 years, until June 1993.

24. In circumstances that will become apparent, an argument was made that Minloy asserted its rights against Mr Lam in respect of part of the land in June 1993. Notwithstanding that assertion of title against him, Mr Lam remained on the land and continues to farm it right up until the present time.

The basic principles

25. The relevant statutory provisions are contained in the Limitation Ordinance, Cap 347 (“LO”), sections 7, 13 and 17 as follows:

“ 7. (2) No action shall be brought by any other person to recover any land after the expiration of [20] years from the date on which the right of action accrued to him ….”

13. (1) No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) ….

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

26. The principles to be applied when determining whether adverse possession has been established in Hong Kong are found in Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd (2007) 10 HKCFAR 588, where, at 592–3 the Court of Final Appeal had this to say:

“ The principles for the application of ss.7(2), 17 and the associated provisions of the Limitation Ordinance are well settled. They were formulated and set out by Slade J in Powell v McFarlane (1979) 38 P & CR 452, approved by the House of Lords in JA Pye (Oxford)Ltd v Graham [2003] 1 AC 419, and adopted by this Court in Wong Tak Yue v Kung Kwok Wai(1997–98) 1 HKCFAR 55. … Of particular relevance to dispossession are the following passages from Slade J’s judgment in Powell v McFarlane:

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(2) If the law is to attribute possession of land to a person who canestablish no paper title to possession, he must...