Liu Kam Hoi and Others v. Liu Ping Kuen, The Personal Representative of the Estate of Liu Fun Kee

HCA 6728/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 6728 OF 1998

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Before: Mr Recorder Stewart Wong SC in Court

Dates of Hearing: 14 – 17, 22 and 29 November 2016

Date of Judgment: 16 August 2017

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JUDGMENT

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A. Introduction

1.This case concerns a piece of land in the New Territories known as Lot No 285 in Demarcation District No 52, Fu Tei Au, Sheung Shui (“the Lot”).  The Lot is located in a place called Wah Shan Tsuen (華山村).

2.The plaintiffs are all the registered owners, as tenants-in-common, of the Lot.  Some of the current plaintiffs replace some of the original plaintiffs as their personal representative or successors-in-title.

3.It is useful to set out who are the current plaintiffs:

(1) The Lot was and is owned by members of three branches, or fongs(房), of the Liu family, each branch originating from one of three brothers.  The three branches together called themselves Gong Tak Tong (廣德堂).  The oldest brother was Liu Yiu Ting (廖耀庭).  The second was Liu Kam Kwong (廖錦光).  The youngest was Liu Kut Sui (廖吉瑞). They were all deceased by the time of the writ herein.

(2) The 1^st plaintiff, Liu Kam Hoi, is a great-grandson of Liu Yiu Ting.  He owns 1⁄12 of the Lot.

(3) Liu Ching Wan, the estate of whom is the 2^nd plaintiff, was a grandson of Liu Yiu Ting.  Liu Wing Leung is the son of Liu Ching Wan. The estate owns 1⁄12 of the Lot.

(4) The 3^rd plaintiff, Liu Ki Cheung, is the son of Liu Kam Sui (廖金水), who was a son of Liu Yiu Ting.  He owns 1⁄6 of the Lot.

(5) The 4^th plaintiff, Liu Ayako, is the daughter-in-law of Liu Cho Yau (廖祖友), who was a son of Liu Kam Kwong.  She owns 1⁄12 of the Lot.

(6) Liu Yuk Keung, Liu Law Kam Yuk and Liu Yuk Kwai, collectively the 5^th plaintiff, are the son, daughter-in-law and son respectively of Liu Cho Hing (廖祖興), who was also a son of Liu Kam Kwong.  Each of them owns 1⁄36 of the Lot.

(7) The 6^th, 7^th and 8^th plaintiffs, Liu Tsun Ka, Liu Tim Man and Liu Yat Choi, are the sons of Liu Kam Sing (廖金聲), who was also a son of Liu Kam Kwong.  Each of them owns 1⁄18 of the Lot.

(8) Liu Wai Man and Liu Kuen Hor, collectively the 9^th plaintiff, are the sons of Liu Kut Sui.  Each of them owns 1⁄6 of the Lot.

(9) Each branch therefore owns 1⁄3 of the Lot.

(10) The facts stated in the preceding paragraph and this paragraph are derived from the evidence of Liu Tsun Ka, as well as land search records, and is not disputed by the defendant.  I find them as facts.

4.The defendant, Liu Fun Kee, passed away on 21 October 1998, shortly after this action was commenced on 29 April 1998.  His son and personal representative, Liu Ping Kuen, born in 1954, now represents his estate as the defendant.  The plaintiffs and Liu Fun Kee were not related, despite sharing the same surname.  I also find the foregoing as facts.

5.For the purpose of these proceedings, a number of plans of the Lot have been produced by the parties from time to time.  For convenience, I shall use the version produced by Mr Chan SC, leading counsel for the defendant, which is attached to his opening submissions.  A copy of that plan is annexed to this judgment (“the Plan”).

6.The Lot is cut into two parts by a road running from north to south (“the Road”).  The land on the east side of the Road was, but is no longer, in issue.  On the Plan, the land on the west side of the Road is divided into seven portions: 1, 1A, 1B, 1C, 1D, 2 and 3.  It is Portions 1, 1A and 1B that are in issue.  (I note that the definition of Portion 1 has changed during the course of these proceedings.  Initially the whole of Portions 1, 1A, 1B, 1C and 1D, as well the land on the east of the Road, was called Portion 1, until 2009 when the case of the defendant changed (see below).  Unless otherwise indicated, when I refer to a numbered portion, I am referring to the portion as currently defined under the Plan.)

B.   The pleadings and the injunction

7.The plaintiffs’ case in the Amended Statement of Claim[1] is simple:

(1) In about 1967, Liu Kut Sui, one of the owners of the Lot, on behalf of himself and the other registered owners of the Lot at the time, let a portion of the Lot to Liu Fun Kee for agricultural purposes on a yearly basis.  The annual rent had since been increased to HK$500.

(2) The portion let was not identified by any plans.

(3) By a letter dated 22 March 1996 from their solicitors (“the NTQ”), the plaintiffs required Liu Fun Kee to quit and deliver up vacant possession of the property[2] to the plaintiffs on 31 December 1996.

(4) Liu Fun Kee did not do so.  (It is not in dispute that Liu Ping Kuen and his family is now still in possession of Portions 1, 1A and 1B (except a part thereof at the western side).)

(5) Further, rent had only been paid up to 31 December 1993.[3] 

(6) The plaintiffs therefore claim possession of the“suitproperty”,arrears of rent from 1 January 1994 to 31 December 1996, and mesne profits from 1 January 1997 until delivery of vacant possession.

8.The Defence and Counterclaim is much more complicated, and has gone through a number of very substantial changes, with later versions being totally inconsistent with earlier versions in a number of important aspects (which I deal with in Sections D and E below).  It is necessary to set out each version in some detail.

9.In the Defence and Counterclaim dated 9 July 1998, it was alleged that:

(1) In or about 1959:

“ when Liu Kut Sui and Liu Chun Sing[4] allowed the Defendant to live at the said property, there was an oral express agreement that so long as the Defendant could pay the rent in each year, he could stay at the said property as long as he wishes (the ‘Express Agreement’).”

(2) The rent was initially about HK$30 per year, and was revised to HK$300 in 1978, and to HK$500 in 1995.

(3) Liu Fun Kee built houses on “the said property” in about 1959 and 1970 with the consent of the owners.  It was said that as at the date of the Defence and Counterclaim, there were seven houses on the said property built by Liu Fun Kee, six of which were used for residential purpose.  The total value of all the structures and premises built by Liu Fun Kee on the said property was not less than HK$1,000,000.

(4) In reliance upon the Express Agreement, Liu Fun Kee commenced his business of landscape gardening on “the said property” since 1980.  For the purpose of carrying on this business on the said property and in reliance upon the Express Agreement, Liu Fun Kee invested not less than HK$300,000 on the said property “during the past ten years”.

(5) The NTQ was not valid and effective by virtue of the Express Agreement. Further, wrongfully and in breach of the Express Agreement, the owners had refused to accept rent since 1997.

(6) The counterclaim consisted of a claim for unquantified and unparticularised damages for breach of the Express Agreement.

10.The Reply and Defence to Counterclaim dated 1 September 1998 consisted essentially of denials of the allegations made in the Defence and Counterclaim. At this stage, there was apparently no issue as to what exactly was the “said property” as the subject matter of the litigation.

11.In the Amended Defence and Counterclaim dated 14 July 1999 (after Liu Fun Kee had passed away):

(1) A plan was annexed.  Portions 2 and 3 thereon are the same as Portions 2 and 3 on the Plan, and was said to be let to one Chu To Keung and one Chu Yun respectively (I shall call them “the Chus” collectively).  The remainder of the Lot, including the portion to the east side of the Road, was coloured yellow and described as Portion 1 and it was said that Portion 1 was let to Liu Fun Kee for him and his family to use.  It was said that the purpose of the letting was so that the Lot could be guarded from trespassers, as Liu Kut Sui was living away from the Lot.  (It should be noted that this Portion 1 is different from the Portion 1 as is now used on the Plan.)

(2) The alleged Express Agreement was amended as follows:

“ In or about 1959, when Liu Kut Sui and Liu Chung Sing allowed the Defendant and his family to live at the said property Portion 1, there was an oral express agreement made by both Liu Kut Sui and Liu Chung Sing to the Defendant and his family that so long as the Defendant and his family could pay the rent in each year, he could stay at the said property Portion 1 as long as he they wishes (the ‘Express Agreement’).”

(3) References to “the Defendant” and the “said property” regarding the consent to build houses, and reliance on the Express Agreement in commencing the landscape business and making investments, were also changed to “the Defendant and his family” and “Portion 1” respectively.  In particular, for 1970, it was stated at §5(c):

“ In or about 1970, the owner Liu Kut Sui and Liu Chun Sing gave consent for the Defendant and his family to build more houses on the said property Portion 1. The houses so built were approved by the relevant Government Departments and a licence no.38035 was assigned to the Defendant and his family.”

12.Also on about 14 July 1999, the defendant applied for an interlocutory injunction against the plaintiffs, seeking to restrain them from interfering with “Portion 1” before any decision or judgment was made in these proceedings. It is not necessary to set out the facts leading to this application.  Liu Ping Kuen exhibited to his affirmation in support a plan marking (by yellow bordering) as “Portion 1” the entire Lot (both to the west and east of the Road) except the portions let to the Chus.  This is consistent with the plan annexed to the Amended Defence and Counterclaim.  The entire Portion 1 was said to be leased by the owners to Liu Fun Kee and his family in 1959.  

13.In his Affirmation in response, Liu Tsun Ka produced a plan which showed that the portion of the Lot the plaintiffs said was leased to Liu Fun Kee was only the portion to the west of the Road except those portions leased to the Chus. This was the first time the plaintiffs set out what they say is the portion let to Liu Fun Kee by way of a plan.

14.In reply, Liu Ping Kuen filed a 2^nd Affirmation disputing what Liu Tsun Ka said as to the area leased, and a person named Chee Yat On and claiming to be living in Wah Shan Tusen also filed an affirmation on behalf of the defendant saying that the whole of the “Portion 1” as was then defined by the defendant had been let to Liu Fun Kee, and Liu Fun Kee and/or Liu Ping Kuen were “the lawful tenant of the whole Portion 1 including the Site” (“the Site” being defined as the portion to the east of the Road).  In cross-examination, Liu Ping Kuen said it was he who told Chee Yat On about this.  I shall have a lot more to say about these affirmations. 

15.The application for injunction was disposed of by way of undertakings given by the plaintiffs.

16.In the Re-Amended Defence and Counterclaim dated 4 January 2011:

(1) A new plan was annexed which appears to be the same as the Plan.  The portion on the east side of the Road was no longer coloured and ceased to be part of Portion 1.  On the west side of the Road, the portion coloured yellow on the plan annexed to the Amended Defence and Counterclaim was divided up into Portions 1, 1A, 1B, 1C and 1D.

(2) What was pleaded regarding what happened in about 1959 remained unchanged.  The portion let was still “Portion 1” but because a new plan was annexed (with “Portion 1” differently defined) the portion said to be let in about 1959 changed as a result.

(3) It was alleged that in about 1970, Liu Kut Sui and Liu Chun Sing further let Portion 1A to Liu Fun Kee. Paragraph 5(c) was amended as follows (showing only the re-amendments made):

“ In or about 1970, Liu Kit Sui and Liu Chung Sing further let another portion of the said Land (‘hereinafter called’ Portion 1A’) to the Defendant and further represented and further represented and gave consent to for the Defendant and his family to build more houses on the Portion 1 and 1A and reassured the Express Agreement to the Defendant and his family (‘the Representation’) in Portion 1 and 1A is now coloured blue in the plan annexed hereto. The houses so built was approved by the relevant Government Departments and a licence no. 38035 was assigned to the Defendant and his family”.

(4) It was alleged that the commencing of the landscape business and investments on Portions 1 and 1A was made in reliance upon the Express Agreement and the Representation by Liu Fun Kee and his family.  It was alleged that the plaintiffs and/or their agents had knowledge (actual or constructive) about the investment and construction works carried out by Liu Fun Kee and his family on Portion 1.

(5) It was also said that in about 1970, Liu Fun Kee and his family started the exclusive use, possession and control of Portion 1B for residential purpose and cultivation.

(6) It was also said that from 1985 and 1986 respectively, Liu Fun Kee and his family had started the exclusive use, possession and control of Portions 1C and 1D for landscape gardening business.

(7) Particulars were pleaded on the use and occupation of Portions 1B, 1C and 1D by Liu Fun Kee and his family to support a claim of adverse possession.  A counterclaim for a declaration of possessory title based on adverse possession of Portion 1B was added.

(8) The counterclaim for possessory title was not made for Portions 1C and 1D, because 20 years had not elapsed when the Counterclaim was first issued.[5]

17.In the Re-Amended Reply and Defence to Counterclaim dated 31 January 2011:

(1) The plaintiffs said that the portions let to Liu Fun Kee was the yellow part as set out on a plan annexed thereto, which was in effect the whole of Portions 1, 1A, 1B, 1C and 1D on the Plan, save a small part of on the northeast corner of Portion 1 which was included on the plaintiffs’ plan but not coloured yellow on the Plan.  (The inclusion of that small part in the plaintiffs’ plan is probably a mistake, as various plans produced by the experts of the Lot do not include this part.)

(2) The making of the Express Agreement and the Representation was denied.

(3) It was alleged that the “said property” was freely accessible to the plaintiffs and/or their predecessors in title and/or agents without any interference, disturbance and/or interruption.  Liu Fun Kee repeatedly admitted and/or acknowledged that the said property including Portions1B,1C and 1D were leased from the plaintiffs. Liu Fun Kee had all along paid rent for the said property, including Portions 1B, 1C and 1D. 

18.By a Re-Re-Amended Defence and Counterclaim dated 20 May 2011, a claim for proprietary estoppel based on the Express Agreement and the Representation, and by investing on the land in reliance thereon, was added.

19.In the Re-Re-Amended Reply and Defence to Counterclaim dated 11 April 2013, the plaintiffs denied Liu Fun Kee and/or his family’s reliance on the Express Agreement and the Representation (which were denied).  The use and occupation of Portion 1B was pursuant to the tenancy and the defendant was estopped from denying the plaintiffs’ title thereto.  Further, if Liu Fun Kee and/or his family did invest on the land, that was solely to the benefit and for the use of himself and/or his family and had nothing to do with the Express Agreement or the Representation (which were denied).

20.Finally, by a Re-Re-Re-Amended Defence and Counterclaim dated 14 January 2015, just before the start of the trial of this action which was adjourned as a result, the commencing of the alleged exclusive use, possession and control of Portion 1B by Liu Fun Kee and his family was said to be 1973, instead of 1970.  It is now alleged that prior to such use, possession and control, Liu Fun Kee had on three occasions requested the owners’ representative, namely Liu Kut Sui, to let a northern portion of Portion 1B to him and his family so they could farm thereon.  Lui Kut Sui refused each time, and on the first and third occasions (in about 1970 and late 1972 respectively) Liu Kut Sui told Liu Fun Kee that the owners had other plans for that part of the land.  Liu Fun Kee and his family then in 1973 commenced taking possession and control of the whole Portion 1B, in defiance of the owners’ express refusal to let more land to them.  They used it for farming from 1973 to 1990, when the landscape gardening business started, and had so used the land since without interruption or disturbance.

21.In the Re-Re-Re-Amended Reply and Defence to Counterclaim dated 10 February 2015:

(1) The plaintiffs denied the new allegations regarding Portion 1B.

(2) It was alleged that parts of the “said property” leased to Liu Fun Kee had been leased to other tenants from 1979 to 1993, but the area leased at the time of the NTQ was the same as that leased to Liu Fun Kee in about 1967.

(3) Use of the land for a landscape gardening business contravened the Conditions of Use imposed on the Lot, as stated in a letter dated 15 November 1995 from the Planning Department.  The defendant had not come to court with clean hands.

(4) If the demised land was only Portions 1 and 1A, the plaintiffs said that use, possession and/or occupation of Portion 1B by Liu Fun Kee and his family should be treated as annexed to the demised land, and they were estopped from asserting adverse possession.  The plaintiffs relied on the doctrine of encroachment.

(5) The defendant had accepted rental receipts which included Portions 1B, 1C and 1D, and solicitors for the defendant had in letters dated 13 December 2007 and 8 January 2008 acknowledged the plaintiffs’ title to the said property, including Portions 1B, 1C and 1D, and had submitted a cheque for payment of rent for 1997 to 2008.

C.   The issues

22.Two witnesses give evidence on behalf of the plaintiffs: Liu Tsun Ka (the 6^th plaintiff), and Liu Wai Man (one of the 9^th plaintiff).  Liu Ping Kuen is the only witness for the defence.

23.The following issues, or potential issues, arise from the pleadings:

(1) What was/were the part or parts of the Lot that had been leased by the owners to Liu Fun Kee originally, and on what terms.  Was it the whole of Portions 1, 1A, 1B, 1C and 1D, as the plaintiffs say, or was it just Portion 1, as the defendant now says?  In particular, was the lease subject to the alleged Express Agreement?

(2) When was Portion 1A leased to Liu Fun Kee, and on what terms?  Was it as part of the original lease, or was it in about 1970 and subject to the alleged Representation?

(3) Can the defendant establish proprietary estoppel against the plaintiffs to prevent termination of (whatever was) the tenancy?  Was there lack of clean hands by Liu Fun Kee?  Was there detrimental reliance and prejudice for Liu Fun Kee if the tenancy was to be terminated?

(4) Was Portion 1B part of the leased property and if not did Liu Fun Kee obtain possessory title thereto by way of adverse possession by 9 July 1998 (the date of the Counterclaim), or whether the doctrine of encroachment applies in favour of the owners?

(5) What remedies in terms of arrears of rent or mesne profits can the plaintiffs recover if they succeed?

24.The plaintiffs, being the registered owners of the Lot, having demanded possession thereof from persons in occupation of the same, i.e. Liu Fun Kee and their family members, are prima facie entitled to possession and, as from 1 January 1997, mesne profits, unless the defendant establishes to the satisfaction of the court that he (and therefore his estate and successors-in-title) had and have some legal entitlement to occupy the Lot as against the plaintiffs.  In Portland Managements Ltd v Harte [1977] QB 306, Scarman LJ said:

“ … if the absolute owner is suing, and if the absolute owner has shown by his conduct an intention to recover possession, then it is not enough for the defendant merely to assert or give evidence that he is in possession: he has got to show that he is there on the basis of some title which is consistent with the ownership of the premises being vested in the plaintiff.” (314F)

“ I cite those cases in support of the proposition, which appears to me to be clear law, that when an owner of land is making a case of trespass against a person alleged to be in possession, all that the owner has to prove is his title and an intention to regain possession. If the defendant to the action either admits his ownership or is faced with evidence, which the court accepts, that the plaintiff is in fact the owner, then the burden is upon the defendant to confess and avoid: that is to say, to set up a title or right to possession consistent with the fact of ownership vested in the plaintiff.” (316D–E)

25.Bridge LJ agreed with Scarman LJ (see 320G) and Megaw LJ was of the same view (see 320G – 321D).

26.Thus, the burden is on the defendant to show either the portions of the Lot now being occupied by Liu Ping Kuen (or his family or businesses) were either being leased from the owners under circumstances that the owners were and are not entitled to terminate the tenancy, or where particular portion or portions were not let, they had obtained a possessory title by the date of the Counterclaim (9 July 1998) by means of adverse possession.  Relevant to the last issue is whether the doctrine of encroachment applies to defeat the claim based on adverse possession.

27.The defendant’s current case is that in about 1959, the owners, represented by Liu Kut Sui (and Liu Chun Sing), first leased Portion 1 to Liu Fun Kee, accompanied by the Express Agreement.  Liu Ping Kuen was only about 5 years old at the time and he does not claim to be involved.  However, his current case is that in about 1970, Liu Kut Sui and Liu Chun Sing, on behalf of the owners, also let Portion 1A to Liu Fun Kee, accompanied by the Representation, which in effect renewed the Express Agreement for Portion 1A. Liu Ping Kuen claims that he was present when Liu Kut Sui agreed the leasing of Portion 1A to Liu Fun Kee, and when he made the Representation.

28.There is no dispute that at least some part or parts of the Lot had been leased to Liu Fun Kee at some time.  The issues are which part(s), and whether, when the part(s) was/were leased, there was any promise or representation made on behalf of the owners.  The burden is on the defendant to prove that the leased areas were only Portion 1 (and later also) Portion 1A, and not Portion 1B, with the leasing accompanied by the alleged Express Agreement and the alleged Representation.  If he fails to do so, he must deliver possession of Portions 1 and 1A as there is no defence thereto. Further, if he cannot prove that Portion 1B has not been leased, it must also follow that he has simply failed to prove that Portion 1B was adversely possessed by Liu Fun Kee and his family, and the plaintiffs must succeed entirely. 

D.   The leased area

29.I have set out above in some detail the evolvement of the case of the defendant on the pleadings.  In particular, for 11 years, up to 2009, when the defendant applied for leave to amend the Amended Defence and Counterclaim, the case of the defendant was that the whole of the Lot, apart from the portions let to the Chus, was let to Liu Fun Kee in 1959, and the Express Agreement was made at that time.  What was pleaded to have happened in about 1970 was only the giving of consent on behalf of the owners for Liu Fun Kee to build more houses on “Portion 1” (then defined to mean the whole of the Lot apart from the portions let to the Chus), and not any further letting or the renewal of the Express Agreement (see §11(3) above).

30.That was not only the pleaded case, but was the subject of affirmation evidence from Liu Ping Kuen and another, apparently independent, witness, Chee Yat On, when an interlocutory injunction was applied for on 14 July 1999:

(1) In his Affirmation dated 14 July 1999, Liu Ping Kuen affirmed that “Portion 1” (as then defined) was leased to his father and his family with the Express Agreement, and his father and his family did pay rent for Portion 1 up to 1996.  He did not say at all how he derived knowledge of the alleged Express Agreement, nor did he say anything about 1970.

(2) As stated at §13 above, in his Affirmation dated 17 July 1999 in response, Liu Tsun Ka produced a plan which showed that the portion of the Lot the plaintiffs said had been leased to Liu Fun Kee, which was the portion to the west of the Road except those portions leased to the Chus.  At this stage, a dispute arose as to exactly what was leased to Liu Fun Kee, but the dispute centred on whether the land on the east side of the Road (called“the Site”in the affirmations) was leased.  It was, at that time, common ground that all the land on the west side, except the portions let to the Chus, had been leased to Liu Fun Kee.  There was also no dispute that whatever was let to Liu Fun Kee was let at one go (either in 1959 or 1967), and not on separate occasions.

(3) In reply, the defendant filed the Affirmation dated 16 August 1999 from Chee Yat On affirming that the whole of the Lot (except the portions let to the Chus) was, as far as he knew, let to Liu Fun Kee who was the lawful tenant thereof.  As stated above, Liu Ping Kuen admitted in cross-examination that it was he who told Chee Yat On the above.

(4) Liu Ping Kuen himself also replied to Liu Tsun Ka on, inter alia, the extent of the leased area.  He disputed that the Lot was originally divided into two parts by the Road because the Road was only built in the late 1960’s, but the lease was made in 1959.The whole of the then defined Portion 1, including the Site, he said, was leased to Liu Fun Kee.  These are what Liu Ping Kuen affirmed in his 2^nd Affirmation dated 16 August 1999:

“ The road dividing Portion 1 was built in the late 60s. In other words, only after about 10 years when the Portion 1 was leased to us did the road was built. Thus, it is untrue to say that the Lot was divided into 2 big portions and only the portion on the left of the road was leased to us. In or about 1959, there was simply no concrete road dividing portion 1”.

“ It is always our understanding that the Site has been leased to us.”

“ We certainly would not spend a substantial sum in maintaining the Site for so many years if it had never been leased to us.”

31.Almost 10 years later, Liu Ping Kuen filed his witness statement dated 8 December 2008.  Attached to the statement was a plan which, apart from the portions let to the Chus, the entire Lot was coloured yellow (save that part of the land on the east side of the Road had not been coloured yellow as that part was supposed to represent “hillside” (山邊, in Liu Ping Kuen’s own written words on the plan)).

32.In the witness statement, Liu Ping Kuen said:

“ 4. In view of guarding the said LOT from being trespassed, part of the said LOT was let by Liu Kui Sui, deceased and the said Liu Chun Sing on behalf of all the then owners of the LOT to My Father and my family to use (‘Portion 1’) in 1959. Subsequently, the remaining parts of the said LOT were let to one Chu To Keung (‘Portion 2’) and one Chu Yun (‘Portion 3’).

5. The said LOT was identified in the plan annexed hereto. The Portion 1 was coloured yellow, Portion 2 was coloured brown and Portion 3 was coloured purple”.

33.This was what he said about what happened in about 1970:

“ In a social occasion in or about 1970, Liu Kut Sui, deceased and the said Liu Chun Sing further represented and gave consent to My Father and my family to build more houses on Portion 1 and they reassured the Express Agreement. I was present when Liu Kut Sui, deceased and Liu Chun Sing made such a representation to My Father and my family as they made the representation at my home in an afternoon.”

34.Nothing was said about the subsequent failed attempts to lease Portion 1B, or the adverse possession thereof, as these were not pleaded by then.  At that time, there were no such thing as Portions 1A and 1B.  It was all one big leased area according to Liu Ping Kuen.

35.The case that it was only what is currently defined as Portion 1, and later Portion 1A, that had been let to Liu Fun Kee (and his family) was first raised in 2009, when the defendant applied for leave to amend the Amended Defence and Counterclaim,[6] which was eventually allowed by Mr Recorder Chow SC (as Chow J then was) by an Order on 22 December 2010.  This was what Liu Ping Kuen said (in his 4^th Affirmation dated 3 December 2009) when he attempted to explain the original “mistake” on the leased area:

“ 13. The action herein was commenced on 29^th April 1998 shortly before My Father passed away. I was then responsible for handling the legal action for My Father. I had been told by Messrs. Wong & Poon, the then solicitors for My Father (‘the previous solicitor’), that the Plaintiffs claimed that they had let part of the said Lot to My Father but the Plaintiff did not identify the exact part. I told the previous solicitor that it was indeed the case that some land was let to My Father by one Liu Kut Sui and Liu Chung Sing. I also told the previous solicitor the terms of such lease. However, to my recollection, I did not then identify the exact land let to My Father with the previous solicitor. As I was only asked about the land leased to My Father, I did not mention about the land adversely possessed by My Father and me. I remembered that no site inspection was conducted by the previous solicitor.

14. The Defence and Counterclaim came to be prepared on the aforesaid mistaken basis. I was then not aware that a mistake had been made in the Defence and Counterclaim by saying the said Lot was let to My Father.

15. Subsequently, the Defence and Counterclaim was amended after the previous solicitor had engaged counsel to consider seeking injunction against the Plaintiffs from interfering with my use and enjoyment of the said Lot. The counsel had not visited the site as well and he just enquired from me details about the portion of land which was subject of the injunction and the use of the said Lot. I then told counsel that part of the said Lot had been let to My Father and part of it also let to others. I remembered having identified on a plan those parts of the said Lot let to Chu To Keung and Chu Yun. However, insofar as Icould remember I did not identify exactly which part of the said Lot let to My Father. As a result, the site plan was mistakenly coloured and attached to the Amended Defence and Counterclaim. I believe by the previous solicitor prepared the Amended Defence and Counterclaim on the basis that parts of the said Lots were let to others and not My Father.

16. In that material time, I was not aware of the mistake made in the Amended Defence and Counterclaim on the exact part of the said Lot let to My Father.

17. After the amendment of the Defence and Counterclaim in October 1999, the action became dormant. I did not take any interest in the action insofar as I had already secured an undertaking from the Plaintiffs not to interfere with my use and enjoyment of the said Lot.

18. I have been told by RY [i.e. the current solicitors for the defendant] that the Plaintiffs had back in 2002 and then 2005 filed notices of intention to proceed. It was only after the 2005 notice was filed that some steps came to be taken in the action. There was discovery done in mid 2006. Then the action went to sleep again.In December 2007, the Plaintiffs filed yet another notice of intention to proceed. The action was reactivated at long last. In December 2008, RY prepared a witness statement which I had been told was prepared on the basis of the matters said in the Amended Defence and Counterclaim. I signed it without being aware that there was a mistake in the Amended Defence and Counterclaim and hence my witness statement did not point out the exact part of the said Lot let to My Father.

19. Shortly after I had signed my witness statement in December 2008, I was told by RY that several witness statements were received from the Plaintiffs. The Plaintiffs’ witness statements are in Chinese. I was given copies of them and I was asked by RY to read them and see whether I had any comment. As the Plaintiffs’ witness statements are in Chinese, I can understand them. I came to realize that the Plaintiffs’ took the view that it was my case that besides Chu To Keung and Chu Yun, the rest of the said Lot was let to My Father. I thought that it was a wrong understanding of my case as indeed only part of the said Lot was let to My Father and a very substantial portions of it (being Portion 1B, Portion 1C and Portion 1D) were adversely possessed by My Father andme, RY realized that a mistake had been made in the Amended Defence and Counterclaim and further amendment was necessary. I changed counsel and site inspection was carried out in early 2009 by the new counsel and RY and during which I gave instructions to RY and my new counsel about the portions of land which My Father and I had adversely possessed and which portion of land was let to My Father.

22. With reference to the matters aforesaid, I verily believe that the mistake was made in the Defence and Counterclaim and the Amended Defence and Counterlcaim as well as in my witness statement on which portion of the said Lot was let to My Fsther arose out of mis‑communication between me and the previous solicitor and RY. The mistake was inadvertent and innocent.  It was corrected once I became aware of it on reading the Plaintiffs’ witness statements and having clarified the matter with my present solicitor of RY.  The amendment was only held up because of the medication process.  Indeed, I verily believe that my case on the leased portions of the said Lot as said in the New Re-AD&CC is to some extent consistent with the Plaintiffs’ case as pleaded and revealed in their witness statements that only some portion of the said Lot was let to My Father.  It means that my proposed amendments are indeed bona fide.”

36.I am afraid I cannot accept the explanation given by Liu Ping Kuen on the change of the defence case:

(1) While his 4^th Affirmation attempted to explain the “mistake” in the Amended Defence and Counterclaim, there was no attempted explanation of why the mistakes were made in his 2^nd Affirmation as to the leased area as well.  As I said above, the dispute between the parties as to the area let to Liu Fun Kee was squarely raised by the Affirmation of Liu Tsun Ka, and not only Liu Ping Kuen filed his 2^nd Affirmation to specifically challenge that, by expressly saying that there was no division of the two sides of the Lot by the Road since it was not built until the late 1960’s and so the lease could not be only on the west but not the east side of something not in existence, he also told Chee Yat On that, and procured him to say that on affirmation.  Liu Ping Kuen in cross-examination admits thathe had been translated the Affirmation of Liu Tsun Ka, and he filed his 2^nd Affirmation, and procure Chee Yat On’s Affirmation, to counter that specifically.  While I fully appreciate that the focus of the dispute at the time was whether the land on the east side of the Road had been leased, and not whether the land on the west side of the Road (consisting of Portions 1, 1A, 1B, 1C and 1D and the case for the last three has now been changed dramatically) had been leased, detailed instructions (such as when the Road was built) as to the leased area must have been given by Liu Ping Kuen to his “previous solicitor”[7] by reference to the plan, when the 2^nd Affirmation, and the Affirmation of Chee Yat On, were being prepared.  Liu Ping Kuen even produced an aerial photo, taken on 22 February 1962, to show that the Road had not been built by then.  Any mistake made when the Amended Defence and Counterclaim and the Affirmation, and the plan annexed thereto, were prepared, must have been discovered by then.  The fact that it was not shows that there was no mistake in the first place.

(2) I simply cannot accept that, in such circumstances, the case pleaded in the Amended Defence and Counterclaim, and at the time supported by an Affirmation of Liu Ping Kuen, was not based on clear express instructions from him but was somehow the result of inadequate instructions or communications and a mistake being made by the “previous solicitor” as a result.  I do not find the explanation given in the 4^th Affirmation convincing and I decline to accept it.

(3) Further, in my judgment, that explanation is inconsistent with what Liu Ping Kuen now says in cross-examination.

(4) The explanation given in the 4^th Affirmation of Liu Ping Kuen attempts to suggest that it was a failure by Liu Ping Kuen to identifyto his previous solicitor clearly the area leased to his father, resulting in the mistake made by the solicitor in preparing the Amended Defence and Counterclaim.  It was a case of miscommunication.  That mistake was supposedly repeated when the witness statement was prepared in 2008 because RY simply prepared the same based on the Amended Defence and Counterclaim.  It was not suggested in the 4^th Affirmation that Liu Ping Kuen himself thought at the time that the leased area was on both sides of the Road (except the parts let to the Chus).  Rather, the implication that was a mistake was made by the previous solicitor, based on inadequate communication, which he did not share, just that he was not aware of the mistake that had been made.

(5) However, in cross-examination, Liu Ping Kuen accepts that he was provided with a written Chinese translated version of all his Affirmations, and his witness statement, and so it is not the case that he failed to understand what he himself had said in his 2^nd Affirmation and in his witness statement.

(6) During cross-examination, Liu Ping Kuen is referred to the plan exhibited to his Affirmation (where both sides of the Road were bordered with a yellow line save the parts leased to the Chus, as being the leased area), and he says when he gave instructions to his lawyers when applying for the injunction in 1999, which would be the same time as the preparation of the Amended Defence and Counterclaim:

「 我同律師講呢，除—即係佢呢個lot呢，喺有個plan 㗎嘛，除咗朱圖強, 朱潤呀，即係呢兩嚿呢，喺我黃色住嗰度都係我用嘅……

係我租晒其他嗰啲，係我」

This suggests that he did give express instructions to his lawyers by reference to a plan with the yellow boundary drawn, explaining to them the yellow-bordered part was the part leased, and this is at variance with what he said in his 4^th Affirmation, which suggested that he did not identify on a plan the part leased to Liu Fun Kee.

(7) Later, in his cross-examination, he is again shown the plan where the land on both sides of the Road (except the parts leased to the Chus) were bordered yellow:

「 問： ……油咗黃色嘅部分係一樣嘅。當時你嘅理解，係你同你爸爸租晒？

答： 我爸爸租嘅，嗰陣時我理解，嗰陣時我爸爸都未死……

問： 你之所謂業權就係因為你當時—爸爸話俾你聽佢租晒㗎嘛，係咪，成個第一地段，左邊，右邊？

答： 係，我理解就係全部租晒嘅。」

Referring to his witness statement, he says in cross-examination:

「 問： 係。咁而家你去到2008年，你都係油晒佢㗎喎，呢度。

答： 係呀。我主要嗰陣時係—我落嗰份誓章，我都係諗住係租你呢度㗎。

問： 係租晒嘅？

答： 係。

問： 租晒？

答： 係。

問： 所以就油晒成個黃色，係咪？

答： 係，係。

問： 當時2008年你即使寫咗“山邊”上去呢，你個諗法都係話油咗黃色嘅部分呢，係業主租晒俾你同你爸爸嘅。

答： 係，冇錯，你講得啱……

問： 當時嘅說法係啱㗎嘛。

答： 係，我諗住係啱先會咁講㗎。」

Even when he is asked why he said that the whole of the Lot (except the parts leased to the Chus) was leased when he asked for the injunction in 1999, and now that he is saying that a mistake had been made, Liu Ping Kuen still says:

「 即係當時我誤會咗全部都係我嘅，我爸爸嘅，租嘅。」

The effect of this evidence is that in 1999 he was himself under the belief or impression that the whole of the west and east sides (save for the parts leased to the Chus) were leased to Liu Fun Kee, and he said so because he thought it was correct at the time.  Thus, if that is really a mistake (as to the leased area), it was his own mistake at the time which was communicated to the solicitor who then recorded it in the Amended Defence and Counterclaim and the Affirmations correctly as he was instructed, and not that the solicitor made a mistake resulting from a miscommunication, as suggested in the 4^th Affirmation.  It is therefore not the case that it was somehow his previous solicitor who prepared the plan, or the Amended Defence and Counterclaim or the 2^nd Affirmation, mistakenly because Liu Ping Kuen failed to explain clearly, as he said in the 4^th Affirmation. It was his own thinking at the time which he communicated to the solicitor, which he said because he believed it to be correct, and elsewhere I have already said he must have given detailed instructions on the leased area to his solicitor at the time.

(8) I also cannot accept the explanation as to why the “mistake” was repeated when the witness statement was prepared in 2008.  The explanation was basically that RY prepared the witness statement based on the Amended Defence and Counterclaim.  However, apart from the inconsistencies between this explanation in the 4^th Affirmation and the testimony of Liu Ping Kuen, it is clear that the witness statement is more detailed.  For example, in the Amended Defence and Counterclaim the only reference to what happened in about 1970 was at §5(c), which I set out at §11(3) above.  What happened in about 1970 was not mentioned further in the Affirmations of Liu Ping Kuen filed before the witness statement, in which he said:

“ In a social occasion in or about 1970, Liu Kut Sui, deceased and the said Liu Chun Sing further represented and gave consent to My Father and my family to build more houses on Portion 1 and they reassured the Express Agreement. I was present when Liu Kut Sui, deceased and Liu Chun Sing made such a representation to My Father and my family as they made that representation at my home in an afternoon.” [emphasis added]

There are other matters where more details have been provided in the witness statement, for example, the extent of expenditure and investment on the land by Liu Fun Kee, Liu Ping Kuen and the family.  

(9) In the plan attached to the witness statement, there were the additional characters “山邊”, which Liu Ping Kuen admits were written by him after the colour yellow had been applied.  This suggests that he did study, and gave instructions, on the plan, which coloured the whole of the Lot, except the parts leased to the Chus and part of the land on the east side of the Road identified as hillside “山邊”.

(10) The comparison between what was pleaded, and what was said in the witness statement, about 1970 and other matters shows that RY could not have prepared the witness statement simply from the existing pleadings and affirmations, and further instructions on those matters must have been given by Liu Ping Kuen at some stage before, or when, the witness statement was prepared.  For example, the question of whether the “Express Agreement”, supposedly made in 1959, was mentioned again in 1970 was dealt with, for the first time on paper in the witness statement.  Liu Ping Kuen must have given instructions on this.  However, if, as is what the defendant says now to be the truth, the Express Agreement was repeated on the occasion of the grant of the lease of Portion 1A, it is difficult to see how this was not explained by Liu Ping Kuen to his solicitor whenever he first gave instructions on the “reassuring” of the Express Agreement in 1970, which must be at a time before the witness statement was finalised.  In giving such instructions, the leasing of a further part of the west side of the Road must have been mentioned, thereby “exposing” the “mistake”.  It is difficult to see how the “mistake” on the extent of the leased area would not have been discovered by then, but was in fact repeated. 

(11) In cross-examination, Liu Ping Kuen accepts that when the witness statement was prepared, he was still under the impression or belief that the whole Lot (except the parts leased to the Chus) was let to Liu Fun Kee, and not because of any miscommunication or misunderstanding between him and RY.  This is again inconsistent with the explanation in the 4^th Affirmation. He eventually accepts in cross-examination that the problem was with him, and not with the solicitor, or that it was because of miscommunication.

(12) The above shows that before 2009 there were quite a few occasions when Liu Ping Kuen would likely to have been consciously considering, and giving instructions, on the extent of the area leased, but each time he affirmed that the leased area was the whole Lot except the parts leased to the Chus.  Further, the fact that he did prepare his 2^nd Affirmation, and asked Chee Yat On to produce an Affirmation, to deal with the question of the leased area shows clearly that he was aware of the dispute regarding the leased area raised by Liu Tsun Ka in his Affirmation in 1999.  I cannot accept his evidence that he only knew of the “mistake” when he read the plaintiffs’ witness statements as he knew their case all along.  Further, his explanations in the 4^th Affirmation and in his oral evidence differ.  In such circumstances I cannot accept his explanation on how and why the “mistake” was made in 1999 and repeated in 2008.

37.The fact that Liu Ping Kuen did not mention the leasing of Portion 1A in about 1970 as per his current case until 2009, when what supposed to have happened in about 1970 was referred to before then, also cast grave doubt, in my judgment, on the credibility of his current case, in particular as to what actually happened in about 1970.  It seems to me to be incredible that his current case (only Portion 1 let before 1970 but with an extension to Portion 1A and the Representation made in 1970), if true, but which is totally inconsistent with his earlier case (all of the Lot (except portions let to the Chus) leased to Liu Fun Kee already by then, and the conversation in 1970 was only to allow further houses to be built on leased land with the consent of the owners, with no mention of further leasing), would not have been brought out until more than 10 years after the commencement of the action, when events in about 1970 had indeed been referred to.  I do not accept Liu Ping Kuen’s testimony that the matter was not mentioned earlier because he was not asked: its importance must be self-evident to him at all times.  The point is that 1970 had been mentioned before, meaning that instructions must have been taken from him, but in an inconsistent manner to what he now alleges.

38.Further, from the report of the defendant’s own expert, after studying the available aerial photographs and survey maps of the Lot, in 1963 a track was found to be running at the centre of the Lot.  In 1973, the track became wider and was believed to be used as vehicle access.  However, the actual photos showthat as the track ran north, it bent towards the northwest and took a path different from that of the Road.  This shows that the Road was in fact built sometime between 1963 and 1973 (which is not inconsistent with what Liu Ping Kuen says), and now that it is common ground that the land on the east side of the Road was never part of the leased land, as distinct from the west side, where at least some of the land was, the balance of probabilities is, and I find, that the lease was first granted after the Road was built, i.e. not before 1963 (and thus not 1959 as claimed by the defendant), by reference to the Road.  This further weakens the credibility of Liu Ping Kuen’s case.

39.Since I, for the above reasons, do not accept the explanation given by Liu Ping Kuen as to why the case pleaded in the Amended Defence and Counterclaim, and stated in his Affirmations and witness statement, was mistaken, I cannot accept as credible his current case which is totally inconsistent with the aforesaid.  That of course, does not mean that I accept the earlier version.  The result is simply that the defendant has adduced two inconsistent versions of what had been let and what happened in about 1970, without an acceptable explanation, and thus there is no evidence before me which I find I can accept regarding the extent of the Lot leased to Liu Fun Kee at any time, or that any part thereof which Liu Fun Kee, Liu Ping Kuen or the family possessed at any time before 1 January 1997 was due to adverse possession and not under a lease under which they paid rent.  The defendant has simply failed to prove his case that the leased area is only Portions 1 and 1A, or that Portions 1B has not been leased.

40.I should point out here that I have not been assisted by the evidence of Liu Tsun Ka and Liu Wai Man, who both confirm that they have no personal knowledge of the extent of the lease granted in terms of area, the date of the original grant, or the terms thereof (except the annual rent, which they could see from the rent receipts and records starting in the early 1980’s).  What they say in evidence about those matters was derived from word of mouth from others in the family, mainly from year-end gatherings, when they visited the Lot for grave sweeping, and casual conversations.  They are unable to say that their knowledge was derived from someone whom they could name and whom in fact had personal knowledge of those matters.  Although Liu Tsun Ka said he was also told about the lease by his father, Liu Kam Shing, as well, there is no evidence as to how his father knew, and whether personally or not.

E.   The Express Agreement and the Representation

41.That leaves the question of the Express Agreement and the Representation.  By his own admission, Liu Ping Kuen was not present when it was first allegedly made in 1959. There is therefore no direct evidence of that.  His case is that it was repeated in 1970 when Portion 1A was further let to Liu Fun Kee in his presence.  However, for reasons stated at §37 above, I cannot accept his evidence that the same was repeated and extended to Portion 1A in 1970 in his presence, that being inconsistent with his earlier case and evidence with no proper explanation.  What I said and found at §38 above also casts doubt on what Liu Ping Kuen said about the original grant, including the question of the Express Agreement.  Even though Liu Ping Kuen also says that Liu Fun Kee also told him about the Express Agreement from time to time, given my finding that what Liu Ping Kuen said about the Express Agreement and Representation regarding 1970 cannot be accepted as credible, and the doubt referred to in the preceding sentence, I also decline to accept such evidence of Liu Ping Kuen which is on the same issue, and which is not supported by any objective evidence, and is merely his bare assertion.  

F.   Burden of proof not discharged

42.In the light of the lack of proper and acceptable evidence before me, save that I find that on the balance of probabilities the lease was first granted to Liu Fun Kee by and on behalf of the owners sometime after 1963, I am unable tomake findings of the extent of the area leased, or whether the Express Agreement and the Representation as alleged was made.  I am further unable to make findings as to whether what the defendant has alleged to have happened in about 1970 in fact did or did not happen.  The claim of proprietary estoppel based on the Express Agreement and the Representation must fail.  Further, the claim for possessory title for Portion 1B based on adverse possession must also be rejected as no animus possidendi can be found.  It is unnecessary for me to deal with the doctrine of encroachment as a result.

43.As the burden is on the defendant to prove the entitlement to remain on the Lot despite the NTQ, which is not discharged, I shall order the delivery of possession of Portions 1, 1A and 1B by the defendant to the plaintiffs.

44.In deciding this matter ultimately on the burden of proof, I have considered all the arguments and evidence of both sides, including:

(1) The allegation (but with no objective evidence) that Liu Fun Kee tried to lease Portion 1B three times in the early 1970’s:

if I cannot find one way or another whether Portion 1B had been leased by 1970, then I do not see how I can make findings on these alleged attempts which are supported only by the bare assertion of Liu Ping Kuen.  Further, this was only introduced by the defendant very late in 2015 with no real explanation, and his earlier cases were different (first, Portion 1B was part of one big leased area in 1959, and then Portion 1B was first possessed by Liu Fun Kee and his family in 1970 (rather than 1973 as is now alleged)) even though the claim for adverse possession of Portion 1B was made a few years earlier.

(2) That there were other “lessees” in the 1980’s on the west side of the Road apart from the defendant and the Chus:

while this makes the case of the plaintiffs that the whole of the west side, including Portion 1B, had been leased to Liu Fun Kee (apart from the Chus) somewhat questionable, that cannot in itself prove the case of the defendant, who has the burden of proof regarding the extent of the leased area, which is not, as I held, discharged.  In particular, according to Liu Ping Kuen himself, none of these leases were in Portion 1B, and thus cannot assist the defendant regarding the status of Portion 1B (i.e. leased or otherwise).

(3) That the annual rent was so low (HK$30 initially rising to HK$500 in 1995) for such a large piece of land:

while from the evidence of the rent paid by the other tenants in the 1980’s, as well as the valuation reports adduced by both sides on market rental value of various Portions of the Lot in and since 1997, the annual rent from HK$30 to HK$500 was very low for Portion 1 only, and much more so of course if the rent was to pay for Portions 1, 1A, 1B, 1C and 1D, the plaintiffs’ case is that part of the Lot was leased to Liu Fun Kee originally so that he could keep an eye on the Lot and to protect it from being trespassed.  This was also originally the pleaded case of the defendant (see §4A(b) of the Amended Defence and Counterclaim: see §11(1) above) although that was later deleted in the Re-Re-Amended Defence and Counterclaim filed on 20 May 2011.  However, this purpose of the letting was referred to by Liu Ping Kuen in his witness statement (see §32 above), which he affirms at trial, and which has not been retracted or corrected.  On that basis, to let Liu Fun Kee to have the Lot at a much reduced rent is a probable explanation.  I do not and need not put it higher than that, and in my judgment the very low rent does not therefore point to an inference, on the balance of probabilities, that the extent of the area leased was only Portion 1 (and then Portion 1A as well).

(4) Liu Fun Kee, Liu Ping Kuen and the family had invested a lot on the land:

there is no objective evidence as to how much and in any event as Liu Ping Kuen himself argued in 1999 why would he do so if he did not have a lease (§30(4) above)?  As the alleged investments/expenses were supposedly on Portion 1B as well at a time when the supposed adverse possession was less than 20 years, those expenses could not have been made because they thought they have a possessory title, and, on their own current case, the Express Agreement and Representation even if made would not have applied to Portion 1B anyway and so the expenses on Portion 1B could not have been made in reliance of the Express Agreement and the Representation.

(5) I do not see how the rent records (which do not show the delineation,site area, of the portion let to Liu Fun Kee, or the terms thereof save the rent) and the aerial photos and survey maps (which show the various uses of the Lot at different times but cannot tell us by whom and pursuant to what (lease or adverse possession)), being the only contemporaneous documents, assist in resolving the question of the extent of the leased area or what happened in about 1970.

G.   Reliefs

45.The parties have, in their closing submissions, based on the valuation reports and the joint statement of the valuation experts, agreed on the mesne profits to be paid by the defendant on Portions 1, 1A, 1C and 1D as follows:

(1) For Portion 1,  the sum of HK$26,187 up to 17 September 2013 and at HK$2,548.50 per annum thereafter until delivery of possession.

(2) For Portion 1A,  the sum of HK$24,589 up to 17 September 2013 and at HK$2,388.50 per annum thereafter until delivery of possession.

(3) For Portion 1C,  the sum of HK$28,662.50 up to 28 February 2013 (when possession was delivered).

(4) For Portion 1D,  the sum of HK$75,259 up to 28 February 2013 (when possession was delivered).

46.For Portion 1B, the area of dispute is a “white hollowed out” area of about 294 square metres on the west side, which the plaintiffs say it had let out to some other tenants since 2011, whereas the defendant say that it had never been possessed by Liu Fun Kee or his family.  Since the plaintiffs have the burden of proving their case on this part of the matter, I do not believe that they have proved on the balance of probabilities as to when and for how long the defendant did possess that area, given that they have admitted that at least at some stage the defendant did not.  I would therefore award mesne profits to the plaintiffs on Portion 1B with the hollowed out area excluded.  As submitted by the defendant, the mesne profits for that portion is HK$207,665.47 up to 17 September 2013, and at HK$20,208.57 per annum thereafter delivery of possession.  I accept that calculation and order the defendant to pay those sums accordingly, as well as the sums referred to in §45 above.

47.As for interest, I award the same on the mesne profits payable for each year for each Portion, with such interest accruing from the first day of the following year until actual payment.  For example, for the mesne profits for 1997 for Portion 1, interest accrues from 1 January 1998 until actual payment.  I believe that the parties are in a position to work out from the valuation reports and the joint statement, and my rulings above, the annual sum for each portion.  The rate is 1% above prime rate from time to time until the date of this judgment, and at the judgment rate thereafter.

48.I order the defendant to deliver up vacant possession of Portions 1, 1A and 1B to the plaintiffs within three months of the date of this judgment, or such further time as the plaintiffs shall agree in writing or as extended by the court on application, and for this purpose liberty to apply is granted. 

49.The Counterclaim is dismissed.

50.I also make an order nisi that the plaintiffs are to have the costs of this action and Counterclaim to be taxed if not agreed, with certificate for two counsel.

51.I thank both leading counsel and their respective teams for their assistance.

Mr Ambrose Ho SC and Mr Tony Ng, instructed by KM Tang & Co, for the plaintiffs

Mr Chan Chi Hung SC and Mr Paul H M Leung, instructed by Rowdget W Young & Co, for the defendant

Annex