Cheung Kwong Yuen v Sun Hui Fang
Court of Appeal
Civil Appeal No. 112 of 2015
Cheung, Kwan and Chu JJA
Land Law
30 November 2015

Adverse possession – occupant who mistakenly believed to be lawful tenant not precluded in law from invoking adverse possession – non-payment of government rates and payment of utility charges – whether proper inference could be drawn that requisite intention to exclude not established

In proceedings in the Lands Tribunal (the “Tribunal”), P, the registered owner of the ninth floor and rooftop of a multi-storey building (the “Property”) obtained an order for delivery up of vacant possession of a room on the roof of the Property (the “Premises”) and mesne profits against D as the tenant of the Premises (the “Judgment”). D claimed she had been in adverse possession on the basis that her brother, B, purchased the Premises in 1992. The Tribunal found that as a matter of law, the doctrine of adverse possession was not open to those claiming to be tenants or purchasers of the disputed property. The Tribunal refused D leave to appeal, finding that D and B had been paying water and electricity charges to the paper title owner all along (the “Decision”). On appeal, D argued that the Tribunal erred in such reasoning and also wrongly held that D and B had not established the requisite intention to exclude the world at large since they accepted they had never paid government rates.

Held, allowing the appeal by setting aside the judgment and remitting case for retrial to the District Court, that:

  • Insofar as the Tribunal held there was a principle of law by which a person who mistakenly claimed to be the lawful tenant or purchaser of property would be precluded from invoking adverse possession, it was wrong in law, as conceded by P. Whether a squatter could establish factual possession and the requisite intention for the purpose of adverse possession was a question of fact depending on the circumstances of the case. There was no rule of law that these elements could not be established by a person who mistakenly believed he had good title or was a lawful tenant and did not realise he was trespassing on another’s land. In the absence of such knowledge or belief, it was sufficient for the possessor simply to establish a manifest intention to exclude everyone.
  • Further, it was not apparent from the Judgment or Decision whether the Tribunal had properly investigated and evaluated D’s case on adverse possession. It would appear that the Tribunal drew an inference from the payment of utilities charges that D and B must have occupied the Premises with the consent of the paper title owner; and did not probe the circumstances and reasons for the non-payment of rates and whether this was indicative of the requisite intention to possess the Premises to the exclusion of all others including the true owner. Accordingly, it was not right to uphold these inferences.
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