Illegal Acts of Possession be recognized as acts of Adverse Possession?

2023/11/10

Generally speaking, in order to establish claim of adverse possession, the squatter has to establish his factual possession over the land with intention (Animus Possidendi) where the limitation period for the owner to recover possession has lapsed. If the squatter’s act of possession violates the law or is even an criminal offence, would it affect his entitlement?

The Court of Appeal in Hong Kong had considered the above issue in early 2023. The maxim of ex turpi causa non oritur actio has been a well-known principle in law, which means that no action can arise from an illegal act. In the case of Monat Investment Ltd [2023] HKCA 479, the owner of a piece of agricultural land in Mui Wo commenced action to repossess the land and in the legal proceedings it accused the squatter of breach of the Government Lease for using the subject agricultural land for residential purposes, and the squatter’s enjoyment of the structure therein also violated section 14 of the Building Ordinance (Cap. 123). By application of the maxim of ex turpi causa, the squatter shall not be granted relief of adverse possession.

The foundation of the maxim of ex turpi causa is on a principle of public policy that the courts will not assist a plaintiff who has been guilty of illegal (or immoral) conduct of which the courts should take notice. It follows that the maxim of ex turpi causa usually goes after criminal acts or quasi-criminal acts such as those involving dishonesty or corruption. In contrast, civil proceedings generally concern personal gains and losses, instead of public interest. In this case, the sqautter’s alleged breach of the Government lease by unauthorized user does not involve criminal or similar elements. Accordingly, the Court held that the maxim does not apply to deny the squatter from claim of adverse possession.

In respect of breach of the Buildings Ordinance, the Court, having considered the case precedents on this long-lasting maxim, held that there has no hard and fast rules that the maxim of ex turpi causa does not apply in cases of adverse possession. In considering whether the maxim applies, the Court shall adopt a “range of factors approach” and take into account the following, namely (1) the underlying objective of the breach of public policy in question, (2) any other relevant public policies which may be rendered ineffective or less effective by denial of the claim, and (3) proportionality of denial of the claim to the alleged breach of public policy. In this case, the Court opined that the underlying purpose of the Building Ordinance was to ensure public safety in the construction of buildings by ensuring that plans are submitted and approved before building takes place, which is independent to the law on adverse possession. Absolute denial of the squatter’s claim of adverse possession is also disproportionate to his violation of the Building Ordinance, and the law on adverse possession would also be rendered ineffective. Therefore, the Court held that the maxim does not apply in this case.

Subject to the Court of Final Appeal’s ruling to the contrary in the future (if any), it is observed that the illegality in the act of factual possession does not necessarily render the claim of adverse possession invalid. Registered Owners should regularly pay attention to the condition of their own lands to safeguard their own properties.