Sellex (Hong Kong) Ltd and Others v. Person Unknown in Occupation of the Area Known As or Referred To As Mezzanine Floor or M/F of R.P. of Lot No.109 in Dd 215, Sai Kung, New Territories, Hong Kong and Another

HCMP 3384/2016

[2018] HKCFI 544

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3384 OF 2016

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J U D G M E N T

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1.The 1st plaintiff (“Sellex”) applies by originating summons on 5 December 2016 under Order 113 of the Rules of the High Court against persons unknown for vacant possession of the G/F of the building erected on the Remaining Portion of Lot No. 109 in Demarcation District 215, Sai Kung, the New Terrirories (“the Lot”). The Lot is also known as No. 34 Sai Kung Main Street.

2.The District Officer (“DO”) had given approval on 22 September 1972 for a building to be erected on part of the Lot (pp. 141 to 146).  According to a joint expert report dated 26 October 2017 (“the Report”) (pp. 115 to 116), there are however two buildings standing on and within the boundary of the Lot.  The building that stands on the location of the approved building is called “the Front Block” and the other building standing at the rear of the Lot is called “the Rear Block”.  There is no Occupation Certificate issued by the DO for either of them.

3.The Report says that the Front Block has a ground (“G/F”), mezzanine (“M/F”) and first (“1/F”) floors.  There are two staircases leading from outside the Front Block on the ground level to the M/F and 1/F.  Each of the G/F, M/F and 1/F is capable of individual occupation by a different occupier. 

4.The Rear Block also has three storeys; namely the ground (“Rear G/F”), mezzanine (“Rear M/F”) and first (“Rear 1/F”) floors.  There is a staircase leading from a communal area on the Rear G/F to the Rear M/F and Rear 1/F.  Each of the Rear G/F, Rear M/F and Rear 1/F is capable of individual occupation by a different occupier. 

5.The G/Fs of the two buildings are separated a wall with an opening connecting the two areas.  The M/Fs and 1/Fs of the two blocks are separated by a party wall. 

6.The Land Registry records recorded that the Lot is divided into the G/F and 1/F with the right to the exclusive occupation of each floor attributed to the co-ownership of a ½ share of the Lot.  But the records do not say if the G/F and 1/F are the floors of the Front Block or the Rear Block or both.  

7.Sellex is the registered owner of a ½ share of the Lot with the exclusive right to occupy the ground floor of the building thereon.  But it is not clear if the exclusive right of occupation is of the G/F or Rear G/F or both.

8.The 2nd defendant, Huang Shu Hua is and was at the time when the originating summons was issued occupying the M/F of the Front Block.  Though Sellex says in the originating summons that it is seeking an order for possession against Huang for the G/F, it is in fact seeking possession of the M/F as occupied by Huang.  It is Sellex’s case that its rights to the ground floor includes the exclusive right to occupy the M/F in the Front Block.  Huang was joined as the 2nd defendant by an order of Master Chow dated 11 May 2017.

9.Huang’s defence is mainly that Sellex cannot prove that the G/F includes the M/F and hence Sellex cannot show any right to claim possession of the M/F.  Huang also said that her father-in-law Mr So Ho Chun (“HC So”) had bought the Rear 1/F at $250,000 on 5 December 2008 and the M/F on 17 March 2009 for $120,000 from a Thai lady named Atthakhanwirun KanLaya, formerly known as Sae-Lao, Siem Eng (“Sae-Lao”).  HC So gave the M/F to Huang as a gift on 1 September 2013.

10.At the start of the hearing of the originating summons, I allowed Sellex’s application to amend the originating summons to the effect that Sellex is seeking an order of possession of “the area known as or referred to as Mezzanine Floor or M/F of the Lot (or the M/F)” instead of the G/F.  This is merely for clarification of the relief sought by Sellex.

District Officer’s approval for building

11.One Chan Yin Choi (“YC Chan”) became the sole owner of the Lot on 22 March 1972 by a division of property. 

12.The DO issued an approval letter on 22 September 1972 for a building to be erected on the Lot (pp. 141 to 146).  The approved building was supposed to be built on the location of the Front Block.  The approved building plan shows a front elevation plan, a section plan and the layout plan of the ground and first floors and the roof. There is no layout plan for the cockloft (pp. 142 to 146). 

13.The DO stipulated in §2(c) of the approval letter that “[i]f reinforced concrete is used, or if construction work is not carried out in accordance with these building plans, I shall not be able to issue an Occupation Certificate to you.”

14.It is not known if the Front Block was constructed pursuant to the DO’s approval or otherwise.  It is also not known why no Occupation Certificate was issued by the DO for the existing Front Block or Rear Block.  

Devolution of title of the G/F of the Front Block

15.From the deeds and instruments registered by memorials in the Land Registry, it can be seen that YC Chan sold a ½ share of the Lot to one Chan Lin Kiu on 4 February 1975.  YC Chan and Chan Lin Kiu then made a DMC on the same day which governed their respective rights and liabilities as co-owners of the Lot and building thereon. 

16.The preamble of the DMC stated that there was erected upon the Lot a “two storeyed building”.  Clause 1 of the DMC provided that each of the parties thereto covenanted with each other to have “the right to the exclusive use occupation and enjoyment and to the entire rents and profits of that floor of the said building which is more particularly set out in … the schedule hereto …”. 

17.The schedule stipulated:

(i) YC Chan to have the exclusive use, occupation, and enjoyment of “the Ground Floor of the building …”; and

(ii) Chan Lin Kiu to have the exclusive use, occupation, and enjoyment of “the First Floor and Roof thereof of the building …” (pp. 130 to 140).

18.Clause 11 of the DMC further stipulated that: “[e]ach of the parties hereto shall have the fullest right and liberty without reference to the other parties hereto, and without the necessity of making the other parties hereto parties thereto, (a) to sell, mortgage or otherwise dispose of his share and interest in the said premises and the floor of which he is entitled to the exclusive use occupation and enjoyment subject to and with the benefit of those presents and (b) to let to any tenant the floor of which he is entitled to the exclusive use, occupation or enjoyment but he shall be responsible to the other parties hereto for the due performance and observance by his tenant of the terms and conditions herein contained.”

19.Clause 2 also stipulated that the parties “shall have access to and shall be entitled to use the passages entrance halls staircases yards and landings … for the purpose of going to and from the floor hereby allotted to him … as set out in … the schedule hereto”.

20.The DMC does not mention any mezzanine floor or cockloft.

21.YC Chan made a will on 30 September 1996 (pp. 67 to 69).  There were then apparently two buildings on the Lot.  He referred to them as the Front and Rear Blocks.  These two blocks are probably the two blocks now standing on the Lot.  There is nothing to suggest that the two blocks had been rebuilt since September 1996.  YC Chan said in the will that he was the owner of the ground and mezzanine floors of the Front Block and the ground, mezzanine, first and second floors and roof of the Rear Block. 

22.Though YC Chan said in his will that there was a second floor in the Rear Block (“Rear 2/F”), the Report does not say that there is such a floor.  There is, however, a photo in the Report which suggests that there is a recessed structure built on top of the Rear 1/F which may be more than a covering or shelter for the top of the staircase (p. 174). I also note that the expert was not given access to the 1/F and Rear 1/F during his inspection on 24 August 2017 (p. 116).  Hence, he might not have been given the chance to see whether there was the Rear 2/F.

23.YC Chan’s will did not touch on the 1/F of the Front Block.  It seems that YC Chan and Chan Lin Kiu had taken the Front Block as the building on the Lot that has registered in the Land Registry and YC Chan regarded that he had by the assignment and DMC both dated 4 February 1975 assigned to Chan Lin Kiu a ½ share in the Lot together with the right to the exclusive use, occupation, and enjoyment (“exclusive possession rights”) of the 1/F.  Hence, he left out the 1/F from his will.  No aerial photo has been produced and it is not known if the Rear Block was in existence on 4 February 1975. 

24.YC Chan bequeathed in the will the G/F and M/F of the Front Block and the Rear 2/F and roof (“Rear Roof”) of the Rear Block to Sao-Lao, the Rear G/F and Rear M/F to his son Chan Muk Nam (“MN Chan”) and the Rear 1/F to his son Chan Muk Chun (“MC Chan”).  However, the M/F of the Front Block, the Rear G/F, Rear M/F, Rear 1/F, the Rear 2/F and Rear Roof are not in the records of the Land Registry and the exclusive possession rights of these floors are not attributable to any share in the Lot. 

25.After YC Chan had made the will on 30 September 1996 which bequeathed the G/F and M/F of the Front Block to Sao-Lao, he sold his ½ share of the Lot with the exclusive possession rights of the G/F to Sae-Lao on 2 November 1996.  There is no obvious reason why he should have done that. 

26.YC Chan passed away on 3 March 1998 (p. 66). 

27.Sao-Lao mortgaged to a lender her ½ share of the Lot and the exclusive possession rights of the G/F on 21 October 1998 to secure general credit facilities.  The lender exercised its power of sale on 26 May 2005 and sold the ½ share and the exclusive possession rights of the G/F to Yu Koon Fung and Cheung Yuk Pui as joint tenants.  Yu and Cheung then sold the same to Tsang Foo Keung on 6 July 2005.  Tsang bought the same as nominee of MN Chan. He then sold the same on 27 July 2005 to one Sy Ying Ying (“Sy”).  Sy is a niece of Law Chi Ngor (“Law”), wife of MN Chan.  Sy then let it out to one Tzeto Kam for 4 years commencing 1 January 2008.  Before the expiry of the tenancy, Sy sold what she bought from Tsang to Sellex on 22 September 2008. 

28.The latest tenancy of the G/F was granted by Sy on behalf of Sellex to Tzeto Kam for 2 years commencing 1 January 2016.  It is not known if Tzeto Kam was a tenant of the G/F from the expiration of the first tenancy on 31 December 2011 to 31 December 2016 just before the commencement of the latest tenancy.

Devolution of title of the 1/F of the Front Block

29.I have mentioned above that YC Chan had sold a ½ share of the Lot to Chan Lin Kiu on 4 February 1975 and they made a DMC on the same day thereby allocating the exclusive possession rights of the 1/F to Chan Lin Kiu.  Chan Lin Kiu then sold the same on 27 October 1976 to one Chan Sum Mou (“SM Chan”), a son of YC Chan and brother of MN Chan.  SM Chan then sold the same to his children Chan Yuk Wah Winnia (“Winnia Chan”) and Chan Chor Wing Dicky on 16 June 2000 who own the same until now.

Right to occupy the M/F

30.If the exclusive possession rights of the M/F is attached to the ownership of some share or interest in the Lot, then such rights should have devoled together with the share unto Sae-Lao under YC Chan’s will after the latter’s death 3 March 1998.  But the DMC does not mention any mezzanine floor.  Furthermore, YC Chan had sold and assigned a ½ share of the Lot to Chan Lin Kiu on 4 February 1975 and the remaining ½ share to Sae-Lao on 2 November 1996.  There is no more share or interest in the Lot that can carry the exclusive possession rights of the M/F.  This is also reflected in the records of the Land Registry.  There is no registration in the registry for the M/F (and all the floors in the Rear Block).

Relationship of the owners

31.A study of the title deeds and documents registered at the Land Registry against the G/F and 1/F shows that since 22 March 1972, every owner of the G/F and 1/F has had either familial or other close relationship with the YC Chan and MN Chan save and except for the following periods:

(i)   from 4 February 1975 to 27 October 1976 when Chan Lin Kiu was the owner of the 1/F; and

(ii)   from 26 May 2005 to 6 July 2005 when Yu Koon Fung and Cheung Yuk Pui were the joint owners of the G/F.

32.The following two tables prepared by counsel for the plaintiffs and modified by me show the relationship of the owners in the devolution of title of the G/F and 1/F:

Joinder of the owners of the 1/F

33.At the start of the hearing of the originating summons, I allowed Sellex’s second application to join Chan Yuk Wah Winnia (“Winnia Chan”) and Chan Chor Wing Dicky as the 2nd plaintiffs (“P2s”).  That was on the basis that P2s were taking the same stance on the facts and law and represented by the same team of lawyers as Sellex.  P2s are the children of SM Chan and registered owners of the 1/F.

34.The shareholders and directors of Sellex are MN Chan and his wife Law (pp. 501 to 509).  Sellex is represented by Winnia Chan in these proceedings.  She made the affirmations for Sellex in support of this application.  She is a niece of MN Chan and Law. 

Sellex’s claim and Huang’s defence

35.YC Chan mentioned a mezzanine floor for the first time in his will made on 30 September 1996.

36.The next time when the M/F was brought into focus was its purported sale by Sae-Lao to HC So at $120,000 on 17 March 2009 and HC So gave the same to Huang on 1 September 2013 as a gift.

37.Winnia Chan made an affirmation for Sellex on 1 December 2016 and claimed that shortly after the G/F was let to Tzeto Kam on 1 January 2016, Sellex discovered that Huang was occupying the M/F. 

38.It is Sellex’s case that the M/F is part and parcel of the G/F which it owns.  Since on 1 September 2009, Sae-Lao had no title or any interest in the Lot or the Front Block or the M/F, she could not have sold or assigned to HC So any title or interest in the Lot with the exclusive possession rights of any part of the Front Block including the M/F.  The document of sale by Sae-Lao to HC So is not registrable at the Land Registry as it is not supposed to be an assignment of any share or interest in the Lot.  Sellex had also not granted any consent or licence to Huang for her to occupy the M/F.  Sellex thus says that Huang is a trespasser and claims possession of the M/F against her. 

39.Huang’s main ground of defence is that Sellex cannot prove that the G/F includes the M/F and hence Sellex cannot prove any right to claim possession of the M/F.  It is Huang’s case that the M/F could be the original 1/F of the Front Block as registered in the Land Registry whilst the current 1/F was built on top of the original 1/F.  That means the current 1/F should really be the second floor of the Front Block.

40.In the light of the relationship of the owners of the G/F and 1/F from time to time and that Tzeto Kam had been a tenant of the G/F for 4 years from 1 January 2008 to 31 December 2011, it is also difficult to believe that Sellex would only have discovered Huang’s occupation of the 1/F shortly after 1 January 2016 through its tenant Tzeto Kam and not earlier through either Tzeto Kam or someone related to MN Chan.  This is particularly so bearing in mind that the M/F had been purportedly sold to HC So on 17 March 2009 and he had purportedly given it to Huang on 1 September 2013.  However, the time when Sellex had knowledge of Huang’s occupation is immaterial as Huang is not claiming any right under the Limitation Ordinance, Cap. 347 or that her occupation was licenced by Sellex.  The close relationship of the owners however allows room for Huang’s argument that the M/F could have actually been the 1/F.

Joint expert report

41.By Order dated 5 July 2017, Master Au-Yeung granted leave for the parties to prepare and file a land surveying report by a single joint expert on whether the M/F was carved out of the G/F of the Front Block (pp. 104-106).  The Report (by Mr Lui Shu Hei dated 26 October 2017) was then filed.

42.The Report says that according to the DO’s approved building plan, there was a cockloft accessible from the interior of the ground floor via a flight of exclusive stairs and that the ground floor and cockloft appeared to have been designed for single use as a whole.  However, the two staircases drawn in the approved plan leading to the cockloft and first floor could not be found at the Front Block by the expert at his inspection on 24 August 2017.  Instead, there were two separate staircases, both leading from the exterior of the building at ground level to M/F and 1/F.  Furthermore, each of the G/F, M/F and 1/F was capable of individual occupation by different owners.

43.For the Rear Block, there was a staircase leading from a communal internal area on the Rear G/F that served the Rear M/F and Rear 1/F and each of the Rear G/F, Rear M/F and Rear 1/F was also capable of individual occupation by different occupiers.  The two blocks were separated by a party wall at each level with the ground floor party wall having a connecting opening.

44.Hence, the expert concluded in Report that it is unknown whether the Front Block was originally built to the specifications of the DO’s approved building plan as there is no Occupation Certificate issued by the DO.  Alternatively, the expert was uncertain whether a building similar to that specified in the approved building plan had been built but subsequently converted into the Front and Rear Blocks now standing on the Lot.

45.The expert therefore opined that he was not sure whether the M/F was occupied as an individual unit since completion of the construction of the Front Block.  He concluded that he could not ascertain from the available evidence on whether the M/F was carved out from the G/F.

Huang’s grounds of defence

46.Mr Pang, SC, leading counsel for Sellex and P2s, referred to Huang’s two grounds of defence as follows; namely:

(1)   Though Sellex is the owner of the G/F, it has not proved and cannot prove that it is the owner of the exclusive possession rights of the M/F (the “Locus standi Argument”) (p. 59/§§2 and 4).  Hence, counsel for Huang submitted at the hearings on 11 May 2017 and 13 February 2018 that Sellex has no standing to claim possession against Huang.

(2)   Huang also claims that she and her family have “experienced” “injustice” by reason of the purported purchase by HC So on 17 March 2009 of the M/F from Sae-Lao for HK$120,000.00 and equity “will not leave injustice remain undone” (the “Equity Argument”) [pp. 59/-60/§§3-7].

The Locus standi Argument

47.Mr Pang referred to the judgment of Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd (2008) 11 HKCFAR 403 where the Court of Final Appeal explained (at §§18-20) the Hong Kong system of ownerships of units in multi-storey buildings in multiple occuaption:

“17. The conveyancing techniques adopted in the present case reflect the usual Hong Kong practice for dealing with the ownership of units in multi-storey buildings in multiple occupation. The system has been described in the textbooks and is unique in the common law world.

18. The first of the system’s main features is that persons owning interests in the property hold as legal tenants in common. All land in Hong Kong is held on a government lease (referred to as a Crown lease before 1 July 1997). The developer of the land, often the original government lessee, notionally divides such leasehold property into a specified number of equal undivided shares and allots exclusive rights of occupation over particular units or parts of the building to stated parcels of those undivided shares. Individual owners acquire their interest by taking an assignment of undivided shares, making them tenants in common with other owners who do likewise. …

19. As Lord Hoffmann NPJ pointed out inJumbo King Ltd v Faithful Properties Ltd & Others (cited below),merely taking an assignment of undivided shares without more, would entitle each to the use and possession of the whole building by virtue of their co-ownership of the property as tenants in common. But naturally purchasers want to have exclusive use and occupation of their own unit, whether it be a flat or a shop, to the exclusion of their fellow co-owners. This gives rise to the second principal feature of the Hong Kong system whereby individual owners executea deed of mutual covenant (“DMC”) regulating by contract their rights inter se regarding the exclusive use and occupation of the units allotted to their respective parcels of undivided shares, their use of the common parts of the building, as well as their mutual obligations on such matters as management charges. The operation of such covenants is underpinned by statutory provisions which ensure, among other things, that the burden of positive covenants can run with the land (Conveyancing and Property Ordinance, s 41(2) and (3)) and that such covenants may operate notwithstanding the absence of dominant and servient tenements.

20. Over the years, the form of the DMC has increasingly become standardised. By the DMC in the present case each owner is granted “the exclusive use occupation and enjoyment and the rents and profits” of his unit and the right “without reference to the other owners and without the necessity of making them parties thereto to sell mortgage or otherwise dispose of his part of the Building and his share in the premises ….. and to let or demise his part of the Building to any tenant or lessee”. For all practical purposes, therefore, the owner of undivided shares to which a unit has been allotted is able, by virtue of the DMC, to exercise rights in relation to the property as if he was its absolute owner. (emphasis added)

48.In Jumbo King Ltd v Faithful Properties Ltd & Others(1999) 2 HKCFAR 279 (cited in the passage above), Litton PJ (as he then was) observed (at 290E-G) that:

“As mentioned earlier, the proprietary right of a co-owner in a multi-storied building is the right to an undivided share in the land and building: Prima facie the owner is entitled to exert rights of possession to every part of the building, in common with his co-owners. This is what is meant by the expression ‘unity of possession’. But by the deed of assignment and by the DMC, the rights of exclusive possession to individual parts are marked out as between the co-owners. To use Ms Eu’s vocabulary: the true analysis is that an undivided share may “carry” a right to exclusive possession of a defined space. Not the other way round. Here, so long as the vendors were owners of undivided shares in the land and building, deriving title from the developer, they were entitled to assert rights of exclusive possession to parts of the building, ... Their title to those units cannot be impeached.” (emphasis added)

49.Mr Pang then submitted that given that bothSellex and P2s, the owners of the G/F and 1/F & Roof respectively are now joined together to seek possession of the M/F, it becomes no longer necessary to determine whether the M/F is part of the G/F or the original 1/F.  The locus standi argument thus falls away.

50.He further submitted that the ownership of an equal undivided share in a multi-building in Hong Kong carries with it not only the exclusive possession rights ofcertain parts of the building as designated in the DMC, but also an entitlement to claim against trespass in respect of any “other” part of the building. 

51.He added at the hearing that the basic principle is that a co-owner of a lot can sue for ejectment of a trespasser from trespassing into a unit in the lot though the exclusive possession rights of that unit belong to another co-owner of the lot.  He stressed that the allotment of the exclusive possession rights of units to the respective parcels of undivided shares is by the contract of the co-owners inter se in the DMC.  Since the DMC does not bind third parties, the allotment of the exclusive possession rights of the various units in the lot does not affect third parties who are not parties to the DMC.  The co-owners have also not abandoned any right to occupy any unit in the lot vis-à-vis third parties.  Hence, any co-owner can maintain an action against a trespasser to the lot though the exclusive possession rights of the trespassed unit belong to another co-owner.

52.Following from such reasoning, if the M/F should be the original cockloft as shown in DO’s approved plan and be part of the G/F, Sellex, as the owner of the exclusive possession rights of the G/F, which includes that of the M/F, would be entitled to claim an order against Huang for possession of the M/F.  P2s are at the same time also entitled to claim against Huang by exercising their right to claim against trespass to the M/F though they do not have any right of use occupation and enjoyment of the M/F vis-à-vis Sellex.  If the M/F should be the original 1/F, the positions of Sellex and P2s will be interchanged and an order for possession can still be made against Huang. 

53.I think this submission is wrong.  The provision for the exclusive possession rights of a unit to be carried by an undivided share is made by a deed.  This provision for exclusive possession rights is to last till the expiry of the lease of the Lot.  The ownership of the undivided share together with the exclusive possession rights of the designated unit and the rights to use occupy and enjoy the common areas (in conjunction with all co-owners of the lot) constitute a legal interest (though the exclusive possession rights of the unit alone do not).  Such legal interest and right as owned by a co-owner is good against the whole world including any trespasser into the unit in question.  It is thus wrong to say that despite the allocation by the DMC of their rights inter se regarding the exclusive use and occupation of the units allotted to their respective parcels of undivided shares, an individual owner still owns a right of possession to the whole lot and all the units thereon vis-à-vis third parties.  His legal interest in the lot does not include the right to possess any unit the exclusive possession rights of which belong to a fellow co-owner of the lot.

54.I also note that the covenants in the DMC made between YC Chan and Chan Lin Kiu dated 4 February 1975 as cited above are similar to those mentioned in §20 of the judgment of Kung Ming Tak Tong.  Hence, “the owner of [1/2 share in the Lot] to which [G/F or 1/F] has been allotted is able, by virtue of the DMC, to exercise rights in relation to [that floor] as if he was its absolute owner”.  Such ownership does not include any right to possess the other floor(s) of the Front Block.

55.Furthermore, this is an application for possession of the M/F against Huang.  If either plaintiff should succeed, it will be given an order of possession of the M/F as against Huang.  If Huang should refuse to deliver up possession of the M/F to the successful party, that party can seek the bailiff’s assistance to recover possession of the M/F from her for its/their own benefit.  Hence, the successful party must be entitled to the possession of the M/F under the DMC and vis-à-vis his fellow co-owner(s).  Otherwise, the court order in its favour will produce a situation contrary to the allocation in the DMC and allow that party the right to possess the M/F contrary to the DMC. 

56.I also disagree that a co-owner who does not own the exclusive possession rights of a unit in the lot can maintain an action for ejectment against a trespasser of that unit so long as he does not ask for an order for possession of that unit.  If this owner can maintain an action in ejectment, logic dictates that he should also be able to grant a licence to the trespasser for him to occupy the trespassed unit.  But that is again contrary to the DMC. 

57.For the above reasons, I agree with Huang that the applicant for possession of the M/F must prove his entitlement to the exclusive possession rights of the M/F.  The joint expert could not ascertain from the available evidence on whether the M/F was carved out from the G/F.  Since for most of the time from 22 March 1972 to date, every owner of the G/F and 1/F of the Front Block are related to YC Chan and MN Chan, it is not known if the current 1/F was built by some of these owners on top of the original 1/F or whether the current M/F was the cockloft in the building plan approved by the DO.  As a result, neither Sellex nor the P2s have proved their entitlement to the exclusive possession rights of the M/F or their locus standi to make this application.  Even if Huang is a trespasser, I cannot order her to give possession of the M/F to either Sellex or the P2s as I do not know who is entitled to possess the M/F per the DMC.  I also cannot order her to give possession of the M/F to both of them as only one of them is entitled and the other is not.  I also cannot order Huang to pay costs of the proceedings to the party that is not entitled to possess the M/F.

The Equity Argument

58.There is no suggestion by Huang that her interest in the M/F, if any, had come from Sellex or its predecessor in title.  Though Huang seemed to have asserted that HC So had somehow been tricked by Sao-Lao into buying the M/F, there is no allegation that such “trick” had anything to do with Sellex or those in its control and management at any material time.  There is thus no ground to support Huang’s equity argument and such argument has no merit. 

Wavier or Acquiescence

59.Mr Slutsky, counsel for Huang, also relied on the District Court judgment in Perfect Name Limited v Fung Chi Mui (DCCJ 1789/2008, 22^nd October 2012, unrep).  That is also a case involving a shop embodying a cockloft.  The floor of the cockloft was extended to cover the whole of the space above the shop so that it became an independent accommodation unit.  However, the exclusive possession rights of the shop and cockloft had been dealt with by a previous owner separately.  Such rights were deal with as an attribute of a share of the lot and building in question.  Such rights as bundled with a share of the lot and building constituted a legal interest.  The situation there is very different from the present case where the exclusive possession rights of the M/F were purportedly dealt with by Sao-Lao independently of any share of the Lot and, hence, do not form part of a legal interest.  This argument therefore has no merit. 

Huang’s case on the facts

60.Mr Pang also submitted that it is wholly inconceivable that a person in this day and age would agree to buy a landed property from a stranger without instructing a lawyer or confirming that the vendor is in a position to sell legally what was offered. The lack of title deed is also unbelievable as is the so-called explanation by the vendor that she had no relatives.  Such explanation cannot justify the lack of title deed.  The price of HK$120,000 for a landed property in the main street of Sai Kung is also inconceivable.  It is also unimaginable that any person would think that he does not need to pay any stamp duty for the purchase of a property. 

61.This argument does not assist in the resolution of this dispute.  It is unnecessary to resolve whether Huang’s case on the facts is believable.  There is no dispute that she is in occupation of the M/F and she is not alleging any leave or licence from Sellex or the P2s or any of their predecessors in title.  The manner in which she has obtained occupation of the M/F is therefore neither here nor there.

Decision

62.In the light of my conclusions above, I dismiss the amended originating summons by Sellex and the P2s.

Costs

63.I also make a costs order nisi that Sellex and the P2s do pay Huang the costs of these proceedings to be taxed.

Mr Robert Pang SC, leading Mr Timothy Lam, instructed by Tung, Ng, Tse & Heung, for the 1st and 2nd plaintiffs

Mr Holden Slutsky, instructed by Siu and Company, for the 1st and 2nd defendants