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HCA 1454/2003
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 1454 OF 2003
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BETWEEN
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LAU WING HONG
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1st Plaintiff
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LAU KOON HAY
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2nd Plaintiff
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LAU KOON LOI
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3rd Plaintiff
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NAM CHI CHEUNG, RAYMOND
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4th Plaintiff
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LAM KWOK CHUEN
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5th Plaintiff
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and
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WONG WOR HUNG
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1st Defendant
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LI WAI KIN
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2nd Defendant
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Before: Mr Recorder McCoy, SC in Court
Dates of Hearing: 22, 23, 24, 25, 28 & 29 August 2006
Date of Judgment: 20 September 2006
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J U D G M E N T
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1. About 800 metres east of the venerated Ten Thousand Buddhas Monastery ( 萬 佛 寺 ), as the crow flies, lies what used to be the rustic village of Sheung Wo Che ( 上 和 輋 ). It is now separated from Shatin by Tai Po Road ( 大 埔 道 ) and lies just immediately west of the KCRC East Rail line. A footbridge from Lek Yuen Estate ( 瀝 源 邨 ), just north-east of Shatin New Town Plaza ( 沙 田 新 城 市 廣 場 ), spans Tai Po Road and connects the village, allowing easy access to it and to the famous Lung Wah ( 龍 華 ) pigeon restaurant located a few hundred metres nearby.
2. For many generations the village was unaffected by modernity. Now all that has changed. What used to be a picturesque, arboreal setting for a few village-style houses has now become a patchwork of scorched earth, thrusting modern villas and one little crooked tin hut fully enclosed by a vegetation-laden fence. In that hut still lives Mr. Li Wai Kin (“Mr. Li”) and his wife. In an even smaller similar structure within the fence lives Madam Wong Wor Hung (“Madam Wong”). Madam Wong aged almost 80 is the 1st Defendant in this proceeding and her son Mr. Li is the 2nd Defendant.
3. On the other side of this case are the 5 plaintiffs, who are indigenous New Territories villagers. The family of the 4th plaintiff Mr. Nam Chi Cheung, Raymond (“Mr. Nam”), have lived in the village for at least 10 generations. The plaintiffs are the various registered owners of 5 small Lots of land and claim that the Defendants have, by remaining in possession behind the fence, erecting the 2 structures and growing a few fruit trees, have trespassed and continue to trespass over their respective Lots.
4. The entire area of land within that fence and in the current possession of the Defendants is about 160m² in size and is irregularly rectangular in shape. The land within the fence straddles: Lot 137 SA ss3, Lot 137 SA ss 4, Lot 137 SA ss 5, and Lot 137 SA RP. (“the disputed land”). Each piece of land has a different owner. Government land is also within the fence.
5. The Defendants have, however, also been, in general terms, on the other material piece of land in this case within the fence, Lot 136 SB ss1, since 10 February 1974, when the first of 3 successive 10-year agreements to lease it was made. That Lot is a small and very narrow, triangular sliver of land about 22m² (“the rented property”).
6.
The area A-B-C-Q-M-J-Z-I-A is 138.3m².
The area A-B-C-Q-D-E-F-G-H-I-A is 91.7m².
Lot 137 SA RP being D-E-F-G-H-I-Z-Q-D is about 25m².
Lot 136 SB ss1 (the rented land) being Q-M-J-Z-Q is only about 22m².
The area of the disputed land is A-B-C-Q-Z-I-A. The Defendants claim all of it and, alternatively, several lesser versions of it. The larger temporary structure is the 2nd Defendant's hut and the smaller one is occupied by the 1st Defendant.
Lot 137
7. The 1st Plaintiff is the registered owner of Section A sub-section 3 of Lot 137 (“Lot 137 SA ss3”). The 2nd Plaintiff and 3rd Plaintiffs respectively own Lot 137 SA ss4 and Lot 137 SA ss5. Since 5 June 1998 the 4th and 5th Plaintiffs have been the registered owners of the Remaining Portion of Section A in Lot 137 (“Lot 137 ssA RP”), having purchased it from the Church Body of the Chinese Anglican Church in Hong Kong (“the Church”): see s4 Chinese Anglican Church Body Incorporation Ord. Cap 1012 (repealed), now s4 Church Body of the Hong Kong Sheng Kung Hui Ord Cap 1158. On the same day, 5 June 1998, the Church had also sold Lot 137 SA ss3, 4 and 5 to the 4th and 5th Plaintiffs; they had in turn respectively on-sold on 22 September 1998, ss3, 4 and 5 to the 1st, 2nd and 3rd Plaintiffs. The Church had been the registered owner of: ss3, 4, 5 and RP for years, well before 10 February 1974, the day when Madam Wong entered the tenancy agreement with Mr. Lam Cheung Sing in relation to Lot 136 SB ss1.
Lot 136
8. Mr. Lam Cheung Sing on 10 February 1974 rented a part of this Lot (“the rented property”) to Madam Wong for 10 years at $300 a year. It is common ground that the leased land did not include 136 SB RP. In 1983 Mr. Lam Ping Hing inherited this land from Mr. Lam Cheung Sing. On 10 February 1984 (“the second tenancy agreement”) Mr. Lam Ping Hing (the uncle of the 4th and 5th Plaintiffs) rented the land to Mr. Li, the 2nd Defendant. All terms, descriptions and conditions were otherwise identical to the first tenancy agreement, save that the annual rental was now $500.
9. The third tenancy agreement was identical to the second, except that the period commenced on 10 February 1994 and the annual rental was now $1,175 and the tenancy would expire on 9 February 2004. The Defendants, however, still remain in occupation, despite the determination of that tenancy. The 4th and 5th Plaintiffs became the registered owners of the land under the third tenancy agreement on 10 June 2002.
10. The Plaintiffs' solicitors first sent a letter addressed to the Defendants, demanding redress for trespass, on 17 January 2002. That letter was itself a response to a letter 5 days earlier from the Defendants' solicitors, claiming the land by adverse possession. The Plaintiffs issued the writ in this action on 25 April 2003.
11. The Defendants deny they are trespassing and by defence and counterclaim seek a Declaration that by adverse possession they are now the rightful owners of the disputed land. The original pleaded counterclaim even sought title to Lot 136 SB ss1 (the rented land) as well as to the Government land. Both these scenarios were absurd – the former, because by actually paying rent the Defendants necessarily negatived any intention to themselves possess it adverse to the landlord; the second because it specially requires 60 years of adverse possession against Government land and the Defendants had only entered upon the land in 1974. By successive amendments during the trial, the Defendants have eventually reduced their claim to the area A-B-C-Q-Z-I-A, as well as lesser included alternatives to that area.
12. The Plaintiffs' case accepts that the Defendants did build in 1974 the tin hut in which Mr Li and his wife still live, just after the first agreement to lease had been entered. Mr Li said in evidence it took him about 2 months to build the hut. The case for the Plaintiffs is that the hut is presently larger than it was after it was initially constructed. Mr. Li accepted that he had over the last 30 years modified and extended it from its original specifications.
13. The case for the Plaintiffs continues that the tin hut was not just built on the rented portion in Lot 136 sB ss1 but right from 1974 it had extended into the land then owned by the Church; that the erection of the structure on the Church land was without any consent or approval from the Church; that the Defendants had therefore trespassed into that land; and that as Mr. Lam Cheung Sing was the landlord of the Defendants in relation to the contiguous rented land (from which the Defendants had trespassed forth), by 1995 the Defendants' 20 years of encroachment into the Church land amounted to adverse possession of it, not for them – the Defendants – but by them, for and on behalf of the then owners of the rented land, and now for the benefit of the present successors-in-title, the 4th and 5th Plaintiffs. For the Plaintiffs' reliance was particularly placed on the doctrine of encroachment and its presumption that any encroachment (even over the land of a third party) which occurs during the term of a lease is presumptively held for the landlord and not the tenant. This doctrine was articulated in Kingsmill v Millard (1855) 11 Exch 313, 318-9 per Parke B and Whitmore v Humphries (1871) LR 7 CP 1, 4 per Willes J. The Defendants submit that this doctrine does not represent Hong Kong law and that in any event the conduct and communications between landlord and tenant successfully rebutted the presumption so that the encroached lands were held for the tenants and not the landlord.
14. The Plaintiffs' case is that it was not until about 1990 that the Defendants first enclosed the lands with a fence currently occupied by them and planted trees and plants within it. That case, at first blush appears internally inconsistent with the Plaintiffs' claim to adverse possession via the encroachment presumption, which is explicitly based on adverse possession by the tenants having occurred by 1995.
The Plaintiffs' Counterclaim to the Defendants' Counterclaim
15. The Plaintiffs have also pleaded a counterclaim to the Defendants' counterclaim, stating that if, which is denied, that the Defendants are found to be in adverse possession of the Plaintiffs' registered land, then basing themselves on the jurisprudence of the recent majority judgment of the European Court of Human Rights in J A Pye(Oxford) Ltd. v United Kingdom application 44302/02, 15 November 2005, they claim compensation from the Defendants for the value of the land. In JA Pye (Oxford) Ltd. v United Kingdom by a majority of 4:3 the Court concluded that where the registered owner of freehold land was successfully dispossessed by a trespasser's adverse possession...
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