Adverse possession: the slightest act of the paper owner sufficient to retain possession

Tierra Trading Ltd v Land Base Ltd ([2017] HKEC 1809) was an adverse dispute between neighbours. The disputed land comprised landings and staircases between the neighbouring buildings. The plaintiffs were the registered owners of the disputed land and they sought an order for possession against their neighbours (the defendants). The defendants claimed to have acquired title by adverse possession. They failed to establish the factual basis of their claim to have been in possession. Further, Deputy Judge Kenneth Kwok SC pointed to the statement by Slade J in Powell v McFarlane that the slightest act done by an owner in possession would negative discontinuance of possession. The plaintiffs had included the disputed land in their calculation of the Gross Floor Area of the development built on their land. This inclusion was a sufficient act to indicate their continued possession.

Michael Lower

Tierra Trading Ltd v Land Base Ltd ([2017] HKEC 1809) was an adverse possession dispute between neighbours. The disputed land comprised landings and staircases between the neighbouring buildings. The plaintiffs were the registered owners of the disputed land and they sought an order for possession against their neighbours (the defendants). The defendants claimed to have acquired title by adverse possession.

They failed to establish the factual basis of their claim to have been in possession. Further, Deputy Judge Kenneth Kwok SC pointed to the statement by Slade J in Powell v McFarlane that the slightest act done by an owner in possession would negative discontinuance of possession. The plaintiffs had included the disputed land in their calculation of the Gross Floor Area of the development built on their land. This inclusion was a sufficient act to indicate their continued possession.

Michael Lower

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Adverse possession: the significance of a failure to fence rural land

In Winpo Development Ltd v Wong Kar Fu ([2017] HKEC 1093) P sought an order for possession in respect of land occupied by D. D relied on adverse possession in his defence and counterclaim.

The claim concerned a large and remote area of land in the New Territories. D’s family had lived on and farmed the land since at least 1968.

The land was unfenced. Recorder Whitehead SC accepted that this fact tells strongly against D having had possession of the land ([64]). Here, however, the natural landscape formed clear barriers; fencing would have been superfluous and impractical ([65]).

D had shown the intention to possess. He and his family dealt with the land ‘as an occupying owner might have been expected to deal with it, and to the exclusion of the world at large, including the owner with the paper title’ ([69]).

D’s adverse possession defence succeeded.

Michael Lower

Unlawful holding over: meaning of possession and calculating mesne profits

In Fordtime Industrial Ltd v Yip Shing Lam ([2016] HKEC 812, LT) the tenant of a cockloft unlawfully held over at the end of the tenancy. After a dispute lasting several years, it wrote to its former landlord on 2 December 2014 notifying the landlord that it could re-take possession. The tenant had, however, built a wall that blocked off access to the cockloft. The landlord was finally able to demolish the wall on 7 March 2015. Had possession been given to the landlord on 2 December 2014 or 7 March 2015? Since the wall erected by the former tenant prevented the landlord from enjoying possession, possession was given on 7 March 2015 when the wall was demolished.

The tenant had removed the floor slab from the cockloft to adapt it to its purposes. The market value of the cockloft was much higher if it was let with a floor slab in place. Should mesne profits be calculated on the basis of the value with the slab or without it? The Tribunal held that the restitutionary basis should be adopted in this case: the aim was to prevent the tenant from being unjustly enriched. Actual losses suffered by the landlord would only come into the calculation if they were higher than the value of the benefit received by the tenant. This was not the case here. Mesne profits were to be calculated by reference to the use contemplated by the parties (without the floor slab).

Michael Lower

One tenant in common can bring possession proceedings

In Chan Po King v Yau Wai Yin ([2015] HKEC 1283, CA) two out of four tenants in common had granted a two year lease of land expiring on 31 December 2013.The tenant refused to leave when the term ended. One of the two tenants in common who had granted the lease brought proceedings to recover possession and seeking mesne profits in respect of the occupation after the end of the term. The tenant contended that both landlords had to be parties to the proceedings and that one tenant in common, acting alone, could not do so. This argument failed. The lease term had ended and the tenant had no further right to possession. There was no evidence to suggest that the other landlord was willing to allow the possession to continue. The applicant was entitled ‘in exercise of her right and interest to possession as a tenant-in-common’ to bring possession proceedings acting alone ([26] per Chu J-A).

Michael Lower

England: Where one beneficial joint tenant is excluded from possession

In Begum v Issa (County Court (Leeds) 5 November 2014) the parties were a married couple with two children. The family home was in joint names and the transfer to them contained an express declaration that they held as beneficial joint tenants. Mr Issa (the husband), acting alone, transferred the property to his brother (it seems that Ms Begum’s signature on the transfer was forged). The brother was registered as the proprietor at HM Land Registry. Ms Begum, unaware of what had happened, remained in occupation with her husband and children. As Ms. Begum was in actual occupation and had not been a party to the transfer to the brother, the effect was that the brother’s registered title was subject to Ms Begum’s equitable interest (Land Registration Act 2002, s. 29).

The judge (HH Judge Behrens) then had to consider the rights of Ms Begum and the brother against each other as equitable co-owners. Section 12 of the Trusts of Land and Appointment of Trustees Act 1996 meant that both Ms Begum and the brother, as beneficiaries, had a right to occupation. Sections 13(1) and 14 gave the court power to exclude one co-owner (here the brother) from occupation on terms which may include the making of payments. Where the court makes such an order it must take into account the matters set out in section 15. The judge had regard to the intention of Ms Begum to occupy the property and the welfare of the two children (one of whom was disabled and who would find any move especially disruptive). On the other hand, it had to have regard to the brother’s intention to achieve a return on his investment in the property. The balance was struck by making an order for sale postponed for twelve months. This delay would allow Ms Begum time to find another suitable home. The brother was entitled to have Ms Begum make a contribution to the mortgage installments paid by the brother. However, the brother had borrowed GBP 92,250 while the outstanding amount on the mortgage taken out by the couple stood at GBP 33,241 at the date of the transfer to the brother. Ms Begum was only liable to pay a proportionate part of the brother’s mortgage payments (36% ie 33,241 / 92,250).

A further question was whether there should be any accounting as between Ms Begum and her husband who alone made all mortgage payments (even those due under the brother’s mortgage until the husband left the property). Was he entitled to a contribution to the mortgage payments from his wife despite their equitable joint tenancy? HH Judge Behrens decided that he was not. He referred to his own decision in Clarke v Harlowe and the English Court of Appeal decision in Wilcox v Tait. He concluded:

‘This is a case where the parties agreed that Nargis Begum would not work and would look after the children. All financial matters were dealt with by Nadeem Issa. In those circumstances I have no hesitation in coming to the conclusion that it was the common intention of the parties that neither should thereafter have to account to the other in respect of expenditure incurred by the other on the property during the period of cohabitation.’ ([112]).

The cohabitation context allows (but does not require) the court to infer a common intention that there would be no liability to account in respect of the period of co-habitation.

On the face of it, Ms Begum was subject to the rights of the mortgagee under the mortgage to which she was a party but not the rights of her brother-in-law’s mortgagee. However, the later mortgagee was subrogated to the rights of the earlier mortgagee to the extent of the amount outstanding under the earlier mortgage at the date of its redemption ([119]).

Michael Lower

A person in possession of property has the right to eject a later possessor

In Chan  Hau  Ling v 劉西  ([2015] HKEC 1095, CFI) P had been in possession of a flat since 1999. Initially this was as a tenant but she remained in possession long after losing contact with the landlord who had gone abroad. She lived elsewhere from 2003 but remained legally in possession. By 2008, huge arrears of management fees had built up. D agreed to clear the arrears in return for possession for two years. Following  this agreement, P allowed D into possession. D remained in possession at the end of the two years and P brought possession proceedings. She succeeded.

If she was in possession in her own right, she clearly had the right to recover the property from a later possessor (Asher v Whitlock; Mabo v Queensland (No 2)). If she was in possession pursuant to a licence she also had a right to recover possession from a later possessor even if she was not in actual occupation (Manchester Airport plc v Dutton) ([35] – [38]).

D argued that even though there was no question of an adverse possession defence  (given the short time period involved) P had abandoned the property in 2008. On D’s version of events, she had simply wanted to divest herself of the burden of responsibility for the property and D had taken over possession on this basis. This argument failed both because the court rejected the factual basis and because the defence of abandonment was unsupported by authority ([45]).

D had clearly entered the property pursuant to an agreement. Whether as tenant or as licensee, D was estopped from denying Ps’ title and from resisting P’s claim for possession ([60]).

D was ordered to give up possession of the property to P and to pay mesne profits at the rate of the market rental for the property for the period after the end of the two year period.

Michael Lower

Adverse possession: Paving land as evidence of possession

In Tsoi Ping Hung v Cheung Chow Lan ([2015] HKEC 701, CA) the defendants owned land on which they had built a house. The plaintiffs owned land adjoining that of the defendants. It was covered in vegetation. In February 2000 the defendants cleared wild vegetation on the plaintiffs’ land, levelled and paved it. They sowed grass and built a small ‘golf course’ on it. The result was that the land was a metre higher than the rest of the plaintiffs’ neighbouring land. The defendants also built a shed on the land. The defendants used the land for golf practice and walking the dog. They cut the grass from time to time. In early 2001, the defendants built a fence along one boundary. The possession proceedings were issued on 3 August 2012 so the question was whether there had been factual possession and an intention to possess since August 2000. The plaintiffs contended that they were only present from 2001 when the fence was erected.

Overturning the first instance decision, the Court of Appeal found that the events that took place in 2000 were sufficient to allow the defendant’s adverse possession claim to succeed. Paving or cultivating land is a clear act of possession ([4.8] – [4.11]). In this case, even before the fence, the presence of a pre-existing ditch combined with the work of raising the ground level of the land meant that there was a 6 feet drop from the disputed land to the rest of the plaintiff’s land. This barrier was an effective way of staking an interest in the land ([4.13]).

On the intention to possess, it was true, as explained in Powell v McFarlane, that the defendants as trespassers needed to provide ‘clear and affirmative evidence that the trespasser … not only had the requisite intention to possess, but made such evidence clear to the world.’ If the use to which the land was put was equivocal, there needed to be compelling evidence of an intention to possess. The actions of 2000 were sufficient evidence of an intention to possess. The plaintiffs’ possession proceedings failed and their title was extinguished.

Michael Lower

Adverse possession: recent reminder of the core elements

In Kiuwide Co Ltd v Tseung Ding Man ([2014] HKEC 5) the plaintiff had been the registered owner of a detached house since 1986. It was later discovered that the defendant had the formal title to part of the garden and swimming pool that had been enjoyed with the property at last since 1986. The plaintiff claimed that it had extinguished the defendant’s title by adverse possession and the court agreed. The court granted a declaration that the defendant’s title had been extinguished and that the plaintiff had possessory title to the land.

The court reminded itself of the law as to the core concepts of possession ([24] referrring to Powell v McFarlane) and intention to possess ([25] referring to Wong Tak Yue v Kung Kwok Wai).

Deputy Judge Marlene Ng made these comments concerning the intention to possess:

‘First, although the squatter must intend to exercise exclusive control for his own benefit, he need not have a conscious intention to exclude the true owner. It is enough that the squatter intends to exclude the owner “as best as he can” or “so far as reasonably practicable and so far as the process of the law allow”. Secondly, an intention to own the land or even an intention to acquire ownership is not required for establishing the animus possidendi. Thirdly, the animus possidendi can be established even if the squatter mistakenly believes himself to be the owner of the land.’ ([26]).

Michael Lower

Adverse possession where part of the land is not in constant, active use

Cornhill Enterprises Ltd v 梁振生 ([2013] HKEC 1796, CFI) ‘is a classic example of how absent neglectful landowners create problems for themselves in the face of an acquisitive population seeking in the time-honoured fashion to scrape a living from apparently derelict land by traditional or progressively modern methods.’ (Deputy Judge Seagrott at [2]).

The plaintiffs had been the formal owners of certain plots of land for several decades but there was no sign at the property to indicate their ownership ([5]). The plots of land had been occupied by the second defendant and his family for over seventy years ([70]). There was ample evidence of their animus possidendi. They had, for example, seen off an attempt by a third party to take over possession of the land ([66]). There was also a lot of evidence to show the family’s attempts to cultivate and improve the land and then to adapt its use to changing circumstances. This all went to show that the family had the necessary animus possidendi ([67]).

Some portions of the land were not intensively cultivated in later years but they had not been completely abandoned and changes in the uses to which the land could effectively be put explained this lesser degree of attention ([68]).

The adverse possession claim succeeded.

Michael Lower

Possession claims and the Lands Tribunal

In Chan Kwong Ho v Yeung Chi Keung Eric ([2013] 2 HKLRD 812, LT) the Lands Tribunal ordered Y to give up possession of property to C following the expiry of the lease. It indicated, however, that in future the Lands Tribunal will consider transferring non-landlord and tenant possession claims to other courts that have more appropriate procedures ([30]).

Michael Lower