In Chung Chiu Hing v Law Sam ([2017] HKEC 1198) Madam Law was the registered owner of a flat (‘the Flat’). P claimed to have acquired title through adverse possession. The Flat had been sold pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance (‘the Ordinance’) and P further claimed to be entitled to the share of the proceeds of sale attributable to the Flat.
Madam Law was the registered owner of the Flat. She granted an oral tenancy to P’s mother-in-law. Madam Law died in 1981. At some point she had simply stopped collecting the rent due under the agreement.
C, P’s husband, moved into the Flat to look after the Mother-in-Law in 1985 and they had joint possession of the Flat. The Mother-in-Law moved out in 1999 and P moved in at around the same time. C died in 2000. P continued in possession from then on.
Chu J. had little difficulty in accepting that the Mother-in-Law and C had been in possession with the necessary intention to possess since 1986 at the latest. P had taken over this possession
Time could only start to run when the oral tenancy agreement came to an end. There was no evidence that the Mother-in-Law or C would have been prepared to pay rent if it had been demanded in 1986; this evidence of their intention to possess suggested that the tenancy had ended.
In any event, section 12(2) of the Limitation Ordinance deems an oral periodic tenancy to come to an end one year after its grant (or from the date of the most recent receipt of rent if later than that).
P had defeated Madam Law’s title. Madam Law’s shares had, however, been sold pursuant to the Ordinance. The Ordinance provided for the relevant share of the proceeds of sale to be paid to the person who had been the owner of the undivided shares prior to the sale. The question was whether the adverse possession claim made P the owner of the undivided shares for this purpose.
Chu J. held that it did; the Ordinance required the owner of the undivided shares to give vacant possession. Madam Law could not give vacant possession because of P’s adverse possession defence. P could be regarded as the owner of the undivided shares for the purposes of the Ordinance.
Alternatively, P’s title was to be regarded as an incumbrance. The Ordinance required the proceeds of sale to be applied towards the discharge of any incumbrance.
Michael Lower
