Encroachment by Government lessee: time did not start to run again in July 1997

In Lee Bing Cheung v Secretary for Justice ([2013] HKEC 255, CFI) L rented property in 1949 and bought the property in 1952. The land that he rented and then bought was partly land held under a lease from the Government and partly on unleased land. In January 2010, the Government evicted L from the unleased land. L sought a declaration that he was entitled to possession (either as a result of the doctrine of encroachment or of proprietary estoppel). L also sought mesne profits from the Government.

L succeeded on the basis of the doctrine of encroachment. He had been in possession of the land from 1949 to 2010. L was entitled to possession until the Government lease ended (it was a lease for 999 years). The Government’s argument that time started to run again with the resumption of sovereignty in 1997 failed ([181]).

At a time when the Government already knew of L’s occupation of the disputed land it stood by and allowed him to spend a considerable amount of money on works partly on the buildings on the unleased land. Even though the Government could not be said to have known of L’s mistaken belief that he occupied the land under the terms of the Government lease, the Government would have been estopped from taking back possession. This wanot the basis for the outcome (which rested on encroachment).

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