Weekly review: 1 – 5 August

Adverse possession and human rights

Where the Limitation Ordinance bars an action for possession, it also extinguishes the title of the formal title owner. In practical terms, the squatter becomes the owner. There are good reasons for having a limitation rule in relation to land: it prevents ‘stale’ claims being brought, can tidy up boundaries and encourages owners to make use of their land. These advantages come at a price: the Limitation Ordinance can present squatters with a windfall (sometimes a very valuable one). It can be argued that the limitation of actions has no place in registered land or that, at most, it should be seen as a way of establishing uncertain boundaries. There is also a strong argument that the law of adverse possession is incompatible with the right to respect for private property enshrined in, for example, article 6 of Hong Kong’s Basic Law and in the European Convention of Human Rights. The Grand Chamber decided in Pye that the English law of adverse possession is compatible with Article 1 of Protocol No 1 of the European Convention on Human Rights. The Court of First Instance has tentatively affirmed the compatibility of the law of adverse possession with the Basic Law in Harvest Good Development. The English Court of Appeal considered the human rights issue in Beaulane Properties Ltd v Palmer when the outcome of Pye was still unknown. The court concluded that the law of adverse possession was incompatible with the law of adverse possession and sought to re-read the Limitation Act in a rights-compliant way. It is no longer good law having been overtaken by Pye. It is nonetheless an illustration of the concerns felt about the operation of the Limitation Ordinance when it comes to land.


Adverse possession: implied licence

It sometimes happens that, during the course of negotiations, a landowner allows someone to have occupation of the land pending completion of the negotiations. If these negotiations drag on for a long time, could the law of adverse possession bar the landowner from recovering possession when negotiations break down. This could only happen in extreme cases where negotiations drag on for many years. In such a situation, landowners can protect themselves by giving the other party an express permission to remain on the land while negotiations are continuing. And Colin Dawson Windows Ltd v Borough Council of King’s Lynn shows that the court will be very ready to imply a licence in these circumstances.


Common parts: are plaster finishes to walls and ceilings stuctural?

Whether an element of a building is structural or not can be an important question in a variety of contexts. In the context of land in multiple ownership (such as an apartment complex) structural elements might be designated as common parts or there might be a prohibition on alterations to structural elements even if they are not common parts. It may well be that the question as to whether a particular element is structural varies from context to context: contracts are to be read so as to give effect to the parties’ intentions. In the context of a lease, Grand v Gill shows that the English courts take the view that plaster finishes to walls and ceilings are structural.


Compensation for loss of ‘marine rights’

Penny’s Bay Investment Co Ltd v Director of Lands is a Court of Final Appeal decision on the calculation of compensation for loss of marine rights (such as access to the sea) under the Foreshore and Sea-bed (Reclamations Ordinance) (Cap. 127). Compensation is calculated by comparing the Open Market Value of the relevant land with the marine rights with the Open Market Value of such land without such rights. The value is the value as at the date when the Government publishes notice of intention to resume ownership and on the assumption that ownership of  the land will actually be resumed by the Government.



The Court of First Instance recently issued a reminder in Ashley 121 Ltd v Appeal Tribunal (Buildings) that you can only submit a planning application in respect of land if you either own it or have a reasonable prospect of owning it. Otherwise the Government might be flooded with purely imaginary or hypothetical planning applications.

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