Adverse possession of a common part by a stranger to the DMC: BMO s.34I does not defeat the adverse possession claim

In Wong King Lim v Peony House (IO) ([2013] HKEC 828, CA) W had been in adverse possession of a lane behind Peony House since 1987. The lane was a common part of Peony House. W was not an owner of Peony House and so not subject to the terms of the DMC. W brought an adverse possession claim in respect of the lane. The incorporated owners argued that any title thus acquired was subject to the covenant implied by section 34I of the Buildings Management Ordinance (a covenant not to convert common parts to private use). The argument was that this restrictive covenant had priority over W’s possessory title (relying on Re Nisbet and Pott’s Contract).

This argument failed. One reason given by the Court of Appeal looked at the purpose of the covenant:

‘The owners of the Building had covenanted only with one another to possess the Lane in common and not exclusively.’ ([34] Yuen JA)

Once the title of all the owners to the lane had been extinguished then there was (so to speak) no covenantee with an interest in land who could enforce the covenant. ([34]) (see also [43] Lam JA). It seems to make no difference that the owners still had title to the rest of the Building and, in that capacity, still had an interest in the enforcement of the implied covenant.

A second reason is given for the proposition that W was not subject to the implied covenant. This is that the right to enforce the covenant had also been defeated by the Limitation Ordinance:

‘[I]n contrast with the position of the covenantee in that case, the Defendant IO’s right under the DMC (and the deemed obligation under the DMC created by Section 34I) has been infringed from the very beginning of the dispossession by the Plaintiff over the portion of the land in question. Thus, the basis of the judgment of Collins MR in that case (viz time should not start to run until the right of the covenantee is affected) has no application to our case. The extinguishment of the title to the land under section 17 of the Limitation Ordinance Cap 347 encompasses the title to enforce the DMC in respect of that portion of the land.’ ([44] Lam JA)

Michael Lower

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