Introduction
Monat v All person(s) in occupation of part of the remaining portion of Lot No 591 in Mui Wo DD 4 No 16 Ma Po Tsuen, Mui Wo ([2023] HKCA 479) is an important case in several respects. First, it considers whether a squatter’s illegality has any possible impact on an adverse possession claim. Having decided that illegality can have an impact on the claim, the question is whether Hong Kong should follow England in moving from the Tinsley ‘reliance’ test to the Patel ‘range of factors’ approach. More fundamentally, the judgment addresses the status of judgments of the UK Supreme Court in Hong Kong.
The facts
The case concerned an adverse possession claim concerning land on which a squatter (the defendant’s father) built a house without obtaining the approval and consent for building works required by section 14 of the Buildings Ordinance.
The defendant’s adverse possession claim succeeded in the Court of First Instance (as explained in a previous post on Hong Kong Land Law). In the first instance judgment, Deputy Judge To said that illegality was generally not a factor to be considered in adverse possession claims unless the possession, or the manner of possession, was a breach of a statutory provision.
Adverse possession and illegality
Yuen JA (with whom the other members of the Court of Appeal agreed, referred to the statement in Les Laboratoires Servier and anor v Apotex Inc that the ex turpi causa maxim should apply only to criminal acts, quasicriminal acts, non-criminal acts which engaged the public interest (eg dishonesty in the context of civil disputes), and infringements of rules enacted for the protection of the public ([23.5]).
Thus, the fact that the squatter’s use of the land contravened the Government lease restriction on uses other than agricultural use was irrelevant. Breach of section 14 of the Buildings Ordinance, however, was a criminal offence under section 40 of the Ordinance.
Tinsley or Patel?
Yuen JA decided that the effect of this illegality on the adverse possession claim should be assessed using the range of factors approach adopted in Patel v Mirza (again covered in an earlier Hong Kong Land Law post).
This approach requires the court:
‘(a) consider the underlying purpose of the prohibition which has been transgressed [e.g. in our case, s.14 BO];
(b) consider conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim [e.g. in our case, the justification of adverse possession in the use of land as a natural resource, and in discouraging stale claims];
(c) keep in mind the possibility of overkill unless the law is applied with a due sense of proportionality.’ ([101 in Patel and [36.4] in Yuen JA’s judgment].
At first instance, Deputy Judge To said that even if the Patel approach were applied, the adverse possession claim would succeed. Yuen JA agreed. The squatter’s possession itself did not contravene the Buildings Ordinance and the Ordinance did not seek to penalize squatters ([62.2] Yuan JA).
Deputy Judge To identified the policies underlying the doctrine of adverse possession: ‘The interest of the squatter who has been enjoying uninterrupted peaceful possession and putting idling land to good use is the public interest which the Limitation Ordinance seeks to protect. Discouraging the paper owner sleeping on his right and allowing his land to go idle is the public policy reasons behind the Limitation Ordinance’. ([62] in the CFI judgment. Yuen JA agreed with this ([62.2]).
Outcome
Although the breach of the Buildings Ordinance meant that the ex turpi causa principle was engaged, the squatter’s claim survived the application of the Patel approach and succeeded. The formal owner’s appeal failed.
The status of UK Supreme Court judgments in Hong Kong
Until now, the assumption has been that the Hong Kong approach to illegality is the reliance approach in Tinsley v Milligan (outlined in this blog post). Yuen JA argued that the CFA had not tied itself to the Tinsley ‘reliance’approach, not having had the opportunity to consider whether the Patel range of factors approach should be adopted. This was, therefore, an open question ([50.2]).
In A Solicitor v Law Society of Hong Kong ([2008] HKCFA 15) Li CJ explained the respect due to decisions of the House of Lords (and now the UK Supreme Court) (at [15]).
Yuen JA explained that it was, accordingly, appropriate to adopt Patel in the absence of any local Hong Kong factors making this inappropriate ([52.2]).
She continued:
‘In my view, it would be surprising if the common law as expounded by the highest authority in the UK (which the CFA has said should be accorded the greatest respect) is not to be regarded as the common law in Hong Kong simply because randomly, there may or may not happen to be a case involving the point being processed through the Hong Kong courts, which may or may not happen to reach the CFA.’ ([52.4]).
The CFA would, of course, be free to depart from the UK Supreme Court position ([52.5]).
This is potentially very significant. Even in the Land Law area, it is easy to think of UK Supreme Court decisions that might be treated as part of the common law of Hong Kong on this approach. The decision in Manchester Ship Canal Company Limited v Vauxhall Motors Limited ([2019] UKSC 46) (see this blog post) is probably an example.
Michael Lower