Lau Sang v. The Incorporated Owners of Kiu Yu and Kiu Fat Mansions

DCCJ 4753/2014

[2018] HKDC 698

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4753 OF 2014

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Before: His Honour Judge MK Liu in Court

Dates of Hearing: 11, 14 - 15 May and 8 June 2018

Date of Judgment: 15 June 2018

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JUDGMENT

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A. INTRODUCTION

1.This action and the other 2 actions, namely DCCJ 5071/2014 and DCCJ 2116/2015, concern the adverse possession claims made by various squatters occupying the common areas of Kiu Yu Mansion[1] and Kiu Fat Mansion[2] (“the Buildings”).  The defendant in each of these actions is the incorporated owners of the Buildings (“the IO”).  The location of the area claimed to be occupied by the plaintiff in each of these 3 actions is shown on the agreed plan (“the Agreed Plan”) annexed hereto as “Annex 1”.  The 3 actions are tried sequentially from 11 May 2018 to 8 June 2018.

2.I would first set out the background facts in this action as an introduction.  Unless otherwise specified, the facts set out below are agreed or not in dispute.

3.The Buildings are governed by the Crown Lease of Kowloon Inland Lot No 1358 dated 7 March 1932 as varied by a Deed of Variation of the Crown Lease of Kowloon Inland Lot No 1358 dated 27 October 1962.

4.The IO was incorporated on 23 May 1985 under the Buildings Management Ordinance (“BMO”).  It was subject to a winding-up order between 27 August 2003 to 19 February 2009.  The IO managed to settle all the outstanding debts and the winding-up proceedings were permanently stayed on 19 February 2009.

5.The plaintiff in this action (“Lau”) was and is at all material times neither a registered owner, nor a paper owner, nor a tenant of any part of the Buildings, nor a party to the Deed of Covenant (Memorial Number UB 470880) governing the Buildings and dated 22 December 1964 (“the DMC”).

6.Lau occupied and is still occupying certain area or portion of the common parts of the Buildings[3].

7.On 13 April 2012, the Building Authority (“the BA”) commenced DCMP 937/2012 and DCMP 938/2012 against the IO under s  27(1)(a)(ii) of the Buildings Ordinance (“the DCMP Proceedings”).

8.On 28 June 2012, Lau (amongst other persons) applied to join in the DCMP Proceedings as respondents.  On 6 July 2012, Lau was ordered to be joined as the 2^nd respondent in DCMP 937/2012.

9.On 13 November 2012, Order Nos COTE0017/12 and COTE0018/12 were made in the DCMP Proceedings (“the Closure Orders”).  On or around 8 April 2013, notice of the Closure Orders was posted up around the areas affected by the Closure Orders informing Lau (and other occupiers) that the Closure Orders would be enforced on 5 June 2013. 

10.On 21 December 2012, Lau (together with two other persons, one being Chiu Suet Ying, the plaintiff in DCCJ 5071/2014) commenced HCMP 2873/2012 against the IO, in which they claimed that they had acquired possessory titles to some common areas of the Buildings.  However, on 29 December 2014, they discontinued the proceedings.

11.In this action, Lau is claiming that he has acquired a possessory title to the area shaded in red on the Agreed Plan (“the Red Area”).  The annual rent or the rateable value of the Red Area, determined in accordance with the Rating Ordinance, or the annual value of the Red Area, whichever is the least, does not exceed HK$240,000.  The parties have further agreed that the reliefs sought by Lau and the reliefs sought by the IO herein do fall within the jurisdiction of the District Court.

B. LAU’S CASE

12.Lau commenced this action on 9 December 2014.  His pleaded case is that in or about July 1971, he started to have exclusive possession of the Red Area and is still in exclusive possession of the same.  Lau’s claims that he began to occupy the Red Area in or about 1971 by using the same as a plastic ware factory (“the Factory”).  The Red Area was enclosed with brick walls and iron doors, and the doors would be locked outside business hours and the keys were kept by Lau.  The Factory also had a steel-plated ceiling.  The Factory operated since July 1971 until about 1993.  Thereafter, Lau used the Red Area as his office and for storage purpose.  Lau claims that by reason of these, he has acquired a possessory title to the Red Area.

13.Lau has called 4 factual witnesses to give evidence in support of his case:-

(1)   Cheung Yi Jap (“Cheung”);

(2)   Lau himself;

(3)   Chu Suk Yin (“Chu”); and

(4)   Chan Sam Mui (“Chan”).

According to Lau, Cheung, Chu and Chan had dealings with him in the past.

14.Lau has also filed a witness statement made by Chung Sing (“Chung”).  In his witness statement, Chung claimed to be a neighbour of Lau for many years.  However, Chung has passed away before the commencement of this trial.  Both Mr Ernest CY Ng, counsel for Lau, and Mr PK Chan, counsel for the IO, agree that no weight should be given to Chung’s witness statement in these circumstances.  However, at the same time, no adverse inference should be drawn against Lau by reason of the absence of Chung in the trial.  I agree.

15.Lau has also produced the expert’s evidence from Mr Joseph Wong (“P’s Expert”).

C. THE IO’S CASE

16.The IO denies the adverse possession claimed by Lau and requires Lau to prove his case[4].  In particular, the IO claims that:-

(1)   The Red Area was not an enclosed area and people could enter the area without Lau’s consent.

(2)   The brick wall[5] used by Lau was not built by him.  It was in fact a brick wall of a neighbouring building called Yick Fung Building (益豐大廈).

(3)   It was only after the removal of the illegal structures on the Red Area in or about October 2013 as a result of the actions taken by BA, Lau built iron net to fence off the area. The area now fenced off by Lau is larger than the area previously occupied by him.

(4)   The area fenced off by Lau is part of the fire escape route for the residents of the Buildings.

17.The IO also claims that Lau is bound by the DMC and/or s  34I of the BMO, and is in breach of clause 13(b) of the DMC[6] and s  34I of the BMO by occupying the Red Area.

18.The IO counterclaims for:-

(1)   A declaration that Lau is in breach of the DMC and/or s 34I of the BMO;

(2)   An injunction requiring Lau, at his own expenses, forthwith demolish and remove all structures and/or objects in the Red Area and reinstate the Red Area;

(3)   An order that in the event of Lau failing to demolish and remove the structures and objects in the Red Area and/or to reinstate the Red Area, the IO is entitled and at liberty to demolish and remove the same at the expenses or costs of Lau, and to recover such sums from Lau in full indemnity, to be assessed by the court if the amount of such expenses and costs cannot be agreed;

(4)   An injunction restraining Lau, whether by himself, his servants, agents, tenants, licensees, occupiers or otherwise howsoever from repetition or continuance of the acts complained of above or of similar acts; and

(5)   damages for trespass to be assessed.

19.The IO has called 3 factual witnesses to give evidence in support of their case:-

(1)   Wong Wai Chi (“WC Wong”), chairlady of the management committee of the IO since about 2009;

(2)   Chau Heung Lan (“Chau”), who operates a shop in Kiu Fat Mansion and has knowledge concerning the Red Area; and

(3)   Wong Tze Yan Kevin (“Kevin Wong”), secretary to the management committee of the IO since about 2009.

20.The IO has also produced the expert’s report made by Mr John Howard Chinchen (“D’s Expert”).

D. THE AGREED ISSUES

21.The parties agree that the issues to be resolved in these proceedings are those set out below:-

(1)   Whether the IO’s right to recover possession of the Red Area has been extinguished and/or otherwise lost under the Limitation Ordinance (“LO”) before the commencement of this action in favour of Lau and whether Lau is entitled to claim possessory title (or a declaration thereof) against the IO:-

(a)   Whether Lau has, at the material time, the requisite intention to possess/dispossess the Red Area or any parts thereof (from its registered paper owners and/or the IO) by way of adverse possession; and

(b)   Whether Lau has, at the material time, factually possessed/dispossessed the Red Area or any parts thereof (from its registered paper owners and/or the IO);

by way of adverse possession for over 12 and/or 20 years since 1996 and/or about 1965 and/or such year as the court may find.

(2)   In the consideration or resolution of the above, including:-

(a)   Whether the existence of DCMP Proceedings and the conduct thereof including but not limited to any court orders made and/or enforcement action taken (or a lack of a refusal by Lau thereof) has any effect(s) and the effect(s) thereof;

(b)   Whether the existence of HCMP 2873/2012 (and the discontinuation thereof) has any effect(s) and the effect(s) thereof;

(c)   Whether Lau has expanded or otherwise changed his occupied area, and the effect(s) thereof;

(d)   Whether strangers could enter the Red Area freely without consent of Lau, and the effect(s) thereof;

(e)   Whether the Red Area is part of the fire escape route for the residents of the Buildings and if so, whether it is on this basis in law or in fact impossible and/or unreasonable for Lau to have factual exclusive possession; and

(f)   Whether Lau has abandoned possession of the Red Area.

(3)   Whether Lau was and is bound by the DMC and/or s  34I of BMO and the consequences thereof, including whether they have been breached.

(4)   Whether the IO is entitled to any relief claimed.

E. THE PRINCIPLES

22.As a matter of law, it is permissible to claim a possessory title to a common area owned by all the co-owners of a building.  Before the establishment of an incorporated owners of the building, the claimant has to show adverse possession against each and every co-owner.  However, after the establishment of the incorporated owners, the claimant may succeed by showing adverse possession against the incorporated owners[7].

23.The principles concerning adverse possession are well known and have been recently summarized by the Court of Appeal in Tsang Foo Keung v Chu Jim Mi Jimmy[8]:-

(1)   In order to succeed in claiming possessory title by adverse possession, the claimant must show that he has both the factual possession during the relevant period and the requisite intention to possess.

(2)   The requisite factual possession is a sufficient degree of exclusive physical control, and what is sufficient depends on the circumstances of the case and, in particular, the nature of the land and the manner in which land of that nature is commonly enjoyed.  What must be shown is that the alleged possessor has been dealing with the land as an occupying owner might expect to deal with it.

(3)   The requisite intention is to exclude the world at large, including the owner, from the land so far as is reasonably practicable and so far as the law allows.

(4)   The person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention by compelling evidence.  It cannot be lightly assumed that the paper title holder has foregone his interest in land.

(5)   Evidence of subjective intent should be approached with caution.  Intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use.

(6)   If a person takes possession by virtue of a licence granted by another, it is the licensor who is treated as being in possession.

24.The presence or absence of evidence showing exclusive possession of the land by the person claiming adverse possession bears significance, as such evidence is relevant to both the requisite factual possession and the requisite intention to possess.  See Gotland Enterprises Ltd v Kwok Chi Yau[9].

25.Statements made by the person claiming possessory title by adverse possession have to be approached with care.  As reminded by the Court of Final Appeal in Wong Tak Yue v Kung Kwok Wai & Another (No  2)[10]:-

“Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism. The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they may deserve. Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.”

26.In respect of evaluating the evidence given by witnesses, the principles are well known.  See Hui Cheung Fai and another v Daiwa Development Limited^[11] and Lee Fu Wing v Yau Po Ting Paul^[12].

27.In respect of expert evidence, the court is not bound by the opinion expressed in the reports made by the experts, and can and should make its own judgment by considering all the materials available, including the aerial photos in the reports.  See Grand Wayfair Investment Company Limited v Chan Yung Kan^[13].

28.With these principles in mind, I turn to summarize and examine the evidence.

F. THE EVIDENCE

F1 Lau’s factual witnesses

Cheung

29.Cheung corrected his witness statement by saying that he knew Lau in 1974 instead of 1972.  He admitted that he did not know the dimensions of the Red Area which was allegedly the area of Lau’s factory.

30.Cheung said that he came to know Lau in 1974.  He often went to Lau’s factory at the rear lane of Kiu Yu Mansion for collecting cheques issued by Lau for the payment of the raw materials as supplied by him to Lau for the production of cleansing agents. Cheung was referred to a photo[14] during cross-examination.  He recognized the metal gate as shown in the middle of the photograph.  He recalled that Lau on some occasions opened the metal gate from inside and came out to give the cheques to him at the corridor outside the metal gate.  Cheung also said that he had been to the office of Lau’s factory[15].  He said that he had to go to the area behind the metal gate before he could have access to the office.  He said sometimes Lau opened the gate from inside to let him go to the office.  Cheung also said that he had no idea in respect of the exact size of the Red Area.

31.I am of the view that Cheung is a straightforward and a candid witness.  I accept his evidence.

Lau

32.From the photos taken by the BA on 30 March 2012, it can be known that the location of the Red Area is at the G/F lane of Kiu Yu Mansion, opposite to Shop L at No 94H[16].  Lau is able to produce documents to show that he had a business at the aforesaid location since the 70s[17]. However, this does not mean that Lau has exclusive possession of the entire Red Area since about 1971.

33.Lau said that before the demolition of the structures on the Red Area as a result of the actions taken by the BA, the appearance and the internal layout of his factory were those as shown in the plan (“the Factory Plan”) annexed to his witness statement as “LS-5”[18]. For ease of reference, a copy of that Factory Plan is annexed hereto as “Annex 2”.  As shown in that plan, the factory was surrounded by fence wall and brick wall, and it also had a folding gate[19]. There were many things inside the factory, including a toilet, working desks, and a fridge.  However, Lau made his witness statement on 16 December 2015, and by that time the structures on the Red Area had been demolished[20]. Lau was unable to tell who prepared the Factory Plan, and based upon what the Factory Plan was drawn.

34.In the light of Cheung’s evidence, the office of Lau’s factory (the working desk of Lau was inside that office as shown in [B2/311-312]) was in the area beyond the metal gate as shown in the photo at [A1/18].  It is not in dispute that the Red Area is at the left-hand side in front of the metal gate as shown in the photo at [A1/18].  There is no photo showing there had ever been any working desk inside the Red Area as shown in the Factory Plan.

35.Under cross-examination, at first Lau denied that he had ever worked in the area inside the metal gate.  However, later Lau admitted that he had opened the metal gate from inside and went out to the corridor to give cheques to Cheung.

36.There is one photo showing that there was a folding gate and the corresponding rail[21] at the Red Area. However, there is also a photo showing that there was no folding gate and no rail at the Red Area[22]. When he was giving evidence, Lau said that the folding gate and the rail were not clearly shown in the photo at [A1/18] because the photo was dark and the rail was covered by some yellow bags.  However, I have compared the photo at [B2/307] with the photo at [A1/18].  In the photo at [B2/307], there was a rail on the ground.  That rail could not be found in the photo at [A1/18].  I do not regard the explanation provided by Lau as a satisfactory explanation for this discrepancy.

37.I am not convinced that the Factory Plan shows the exact situation of what was on the Red Area from about 1971 to October 2013.  Further, I am not satisfied that there was a folding gate at the Red Area at all times during the period from about 1971 to October 2013.

38.Lau claimed that whenever he was not present in his factory, he would shut the folding gate. However, as shown in the photo at [B2/421], when BA’s staff went there to post the notice of intention to apply for closure order on 30 March 2012, the BA’s staff could enter the area and the folding gate (assuming that there was a folding gate at that time) was not shut.  Lau admitted that at that time he was not present in his factory.

39.I have also considered since there were things placed by Lau on that area, whether it is inherently probable that the area was not enclosed.  People might easily take away the items on that area if the area was not enclosed.  However, there is no evidence, let alone reliable evidence, showing that the items placed by Lau on that area were valuable items which could be easily taken away by others. Further, as shown by the incident on 30 March 2012 mentioned in the paragraph above, Lau would leave the place unattended without any measure preventing people from entering the area while he was not there.  I am of the view that it is inherently probable that the area was not an enclosed area.

40.As to the size of the area occupied by him, in paragraph 9 of his witness statement filed in HCMP 2873/2012, Lau said that the size of the area was about 850 sq ft.  In his evidence in this case, Lau said that was only a rough estimate.  According to his pleaded case, the size of the Red Area is 53.65 x 10. 764 = 577.49 sq ft. However, P’s Expert assessed that the area occupied by Lau should be about 35.8 sq m, which is equivalent to about: 35.8 x 10.764 = 385.35 sq ft.

41.Mr Chan submits that the various versions of the size of the area occupied by Lau shows that there has never been any clear or fixed boundary of that area, otherwise it would not be so difficult to tell the exact size of that area.  This suggests that the area in fact was not an enclosed area at all times or at most of the times.  I agree.

42.In my judgment, Lau is not a reliable witness.  There is no clear and cogent evidence showing that the Red Area or any part thereof has been an enclosed area and exclusively possessed by Lau at all times since about 1971. 

43.Lau claims that he has been in possession of the Red Area since about 1971.  However, it is pleaded in his statement of claim that he and his predecessor in title have been continuously in possession of the Red Area[23]. During cross-examination, Lau was asked who was his predecessor in title, and he answered that he had no predecessor in title.  This is also the answer given by Lau in his further and better particulars of the statement of claim. However, it remains unanswered why Lau mentioned and pleaded “his predecessor in title” in the first place.

44.In my view, it is unclear whether Lau indeed has a predecessor in title.  If Lau in fact has a predecessor in title, whether the predecessor in title came into possession as a result of the consent or permission given by the registered owner would have a significant impact on the adverse possession claim now made by Lau.

45.All in all, there is no satisfactory evidence from Lau in support of his adverse possession claim.

Chu

46.Chu worked in a congee shop in To Kwa Wan and came to know Lau in about 1996, for Lau would deliver cleansing agents to the congee shop from time to time.  The congee shop was closed in about 2003.  It was only after the closure of the congee shop, Chu went to Lau’s shop to buy food powder for her own consumption.  Before she went to Lau’s shop, she would call him to make sure that he would be present in the shop.  Chu said she did not know the exact dimensions of Lau’s shop.

47.While I do not doubt Chu’s evidence, her evidence has little value on the issues to be resolved in this case.

Chan

48.Chan operated a food shop in To Kwa Wan until 2009.  She came to know Lau in about 1997, for Lau started to deliver cleansing agents to her shop at that time.  Chan would often visited Lau’s shop to buy things.  She did not know the exact dimension of Lau’s shop.  Same as Chu, before Chan went to Lau’s shop, she would call Lau to make sure that he would be present in the shop. 

49.Similarly, although I do not doubt Chan’s evidence, her evidence has little value on the issues to be resolved in this case.

F2 IO’s factual witnesses

WC Wong

50.WC Wong has been the chairlady of the management committee of the IO since about 2009.

51.WC Wong mentioned that the area occupied by Lau as shown in the left-hand side of the photo in [A1/18] was not an enclosed area.  Residents of the Buildings would pass the area from time to time, especially during rainy days, for there was no cover over the middle of that corridor and people would choose to pass the area occupied by Lau as that was a covered area.  At most of the times, there was not many items in that area.  WC Wong also mentioned that the area occupied by Lau was not separated with the barber shop[24] by a brick wall, but by a wooden board, and that wooden board seemed to be movable.  She also mentioned that the area occupied by Lau previously ended at the metal gate as shown in [A1/18], and the metal gate was just outside the staircase as shown in the middle at the top of the Agreed Plan.  However, after the demolition of the illegal structures on the area, Lau built an iron mesh fence enclosing a much larger area, which reached the pump room of Kiu Yu Mansion.

52.WC’s evidence is clear and cogent.  I accept her evidence

Chau

53.Chau operated a salon in a shop in Kiu Fat Mansion.  She used to feed homeless cats at the subject lane for many years.  Sometimes, she would go inside the area occupied by Lau’s structures to look for cats.  Save and except one occasion, she was never interfered with or stopped by Lau.  The only exception is that on one occasion, Lau told Chau that Chau should not feed cats in his place.  It is pertinent to note that on that occasion, Chau was not required by Lau to leave the place, but was only required by Lau not to feed cats in that place.

54.I am of the view that Chau is an honest and reliable witness.  I accept her evidence.

Kevin Wong

55.Kevin Wong has been the secretary of the management committee of the IO since about 2009.  He was born in 1973 and started to live in Kiu Yu Mansion in about 1986.  He said that when he was small, he sometimes walked pass the subject lane where Lau’s illegal structures were situated.  He could pass the area occupied by Lau.  That area was an open area.  Further, he did not see any folding gate at the area in the 80s.  After being promoted to Form 4 in or about 1989, he seldom went to that lane again.

56.He is an honest and straight forward witness.  I accept his evidence.

F3 The expert evidence

57.With respect, the expert evidence produced by the parties is of limited assistance.

58.The leave given to the parties is to adduce expert evidence by way of a land surveyor report in respect of the measurement plan on the demarcation of the land claimed under adverse possession by Lau[25]. The evidence from P’s Expert clearly exceeds this scope.  Apart from providing measurement of the of the subject area claimed to be acquired by Lau by adverse possession, P’s Expert also express the following opinion in paragraph 6.5 of his report:-

“ ... according to the Survey Sheet, I could confirm that ‘the Factory’ has been in the current location for at least 17 years from year 1997 to 2014. Furthermore, according to the Aerial Photo, I could confirm that ‘the Factory’ has been in the current location for at least 35 years from year 1979 to 2014. Yet the actual occupation inside ‘the Factory’ could not be identified simply from the Aerial Photos and Survey Sheets.”

59.P’s Expert is of the opinion that the size of the area occupied by Lau is about 35.8 sq m.  However, site inspection was conducted on 7 January 2016, by that time the original structures erected by Lau on the area have been demolished.  It is not known on what basis the expert can give this assessment.  In any event, whether Lau has been in possession of the Red Area since about 1971 as pleaded in his statement of claim is a factual issue to be resolved by considering the factual evidence.  It is not a question for the expert to answer. 

60.As to the additional opinion provided by P’s Expert as set out in paragraph 58 above, although this is outside the scope of the leave provided by the court, since the IO has not raised any objection to this before the commencement of the trial[26], I am prepared to consider this additional opinion.  Having examined the survey sheets and the aerial photos produced by P’s Expert, I decline to attach weight to this opinion.

(1)   The survey sheets from 1997 to 2014 only shows “TS” at the subject lane.  While “TS” is temporary structure, there is no evidence showing that “TS” is the Factory and not anything else.

(2)   I do not agree that the aerial photos can show the existence of the Factory in the lane. 

61.D’s Expert is of the opinion that the change of land use within the area now being fenced off by Lau could not be shown by looking at the aerial photos.  This is stating the obvious.

62.Ultimately, the outcome of this case depends upon the factual evidence.

G. MY FACTUAL FINDINGS

63.By reason of the aforesaid, I find that the Red Area or any part thereof is not an enclosed area and is not in Lau’s exclusive possession at all times since about 1971.  There has not been any physical barrier at all times preventing people from entering the Red Area without Lau’s consent. Residents of the Buildings may and actually would pass the Red Area without any intervention from Lau. 

64.I find that Lau has not been in exclusive possession of the Red Area before erecting iron mesh fence surrounding the area on 1 November 2013.  Further, Lau did not have the intention to exclude the world at large before erecting the said iron mesh fence on 1 November 2013.

65.Accordingly, the adverse possession claim made by Lau must fail.

H. ANSWERS TO THE AGREED ISSUES

Issue (1)

66.As a result of my findings above, the answer to Issue (1) is clearly “No”.  Lau’s adverse possession claim fails and the IO may recover possession of the Red Area.

Issue (2)

67.Given my findings above, it would not be necessary for me to answer each of the questions listed out under issue (2).  Suffice for me to say that I have considered the materials in the DCMP Proceedings and in HCMP 2873/2012 produced by the parties in this case, and the findings made above are made after considering these materials.  I would only mention 2 matters.  First, on the question of the fire escape route, there is no sufficient evidence before me showing that the fire escape route has been adversely affected by Lau’s occupation of the Red Area and the extent of the impact[27]. Second, on the basis of the evidence given by WC Wong (which is accepted by this court and I give full weight to this), Lau did enlarge his site by enclosing more area inside the iron mesh fence built by him after the demolition of the structures on the original site as a result the BA’s actions.  However, since I have ruled against Lau on his adverse possession claim, all these would not affect the outcome of this case. 

Issue (3)

68.My opinion on this issue is if Lau can establish his adverse possession claim, s 13(b) of the DMC and s 34I of the BMO cannot be used to defeat Lau’s claim.  Since Lau has never been a co-owner of the Buildings, he is not bound by the DMC or s 34I of the BMO.  Further, any right to enforce a negative covenant against Lau would have been extinguished by the operation of LO s 17.  The authority directly on the point is the Court of Appeal’s decision in Wong King Lim v Incorporated Owners of Peony House[28].

69.If Lau fails on his adverse possession claim, the IO can recover possession of the Red Area from Lau and claim damages.  Lau is merely a squatter and trespasser.  The DMC and the BMO would not be relevant.

70.On any view, the DMC and the BMO would not assist the IO.

Issue (4)

71.Mr Ng submits that if I am not with Lau, this court may dismiss Lau’s claim and order Lau to deliver vacant possession of the Red Area to the IO.  Mr Ng submits that the injunctive reliefs claimed by the IO[29] are based upon breaches of the DMC and the BMO by Lau, and such claims are misconceived.  I agree.

72.In respect of the order sought by the IO in paragraph 3 of the prayer of that counterclaim, ie, for an order that if Lau fails to demolish and remove the structures now on the Red Area and reinstate the area at his own costs, the IO may take action to remove the same and claim indemnity from Lau, I am of the view that this is a legitimate claim.  I would make this order.

73.Mr Ng requests that if Lau has to deliver vacant possession of the Red Area to the IO, Lau be given 2 months to do so.  Mr Chan has no objection to this.  I would order Lau to deliver vacant possession of the Red Area to the IO within 63 days.

74.Both Mr Ng and Mr Chan agree that only nominal damages should be awarded to the IO, as the IO has not adduced evidence to prove their actual loss as a result of the trespass committed by Lau[30]. I would award nominal damages of HK$10 to the IO.  Since this is a nominal award, I would not order any pre-judgment interest.

I. COSTS

75.I have heard submissions on costs.  There is no dispute that the general rule of costs following the event should apply.  For the purpose of facilitating taxation, I am prepared to make one single costs order for the whole set of proceedings[31].

76.Mr Ng submits that since the IO has failed to obtain the injunctive reliefs claimed and their reliance on the DMC and the BMO is wrong, the IO should be deprived of 50% of the costs of these proceedings.  With respect to Mr Ng, the time spent on the arguments concerning the DMC and the BMO is minimal.  In my view, it is not justified to deprive the IO of any costs in these circumstances[32].

J. CONCLUSION

77.I make the following order:-

(1)   Lau’s claim be dismissed;

(2)   Lau do deliver vacant possession of the Red Area (including at his own costs demolishing and removing the iron mesh wire and all other structures on the area and reinstating the area) to the IO within 63 days;

(3)   In the event that Lau fails to at his own costs demolish and remove the iron mesh wire and all other structures on the Red Area and reinstating the area within 63 days, the IO is at liberty to do all the aforesaid and recover the costs of those works from Lau in full indemnity, the amount of such costs is to be assessed by the court if not agreed;

(4)   Liberty to apply;

(5)   Lau do pay nominal damages of HK$10 to the IO;

(6)   Costs of these proceedings (including all costs reserved, if any) be to the IO, with a certificate for counsel, to be taxed if not agreed.

78.Lastly, it remains for me to thank Mr Ng and Mr Chan for the helpful assistance rendered to this court.

Mr Ernest C Y Ng, instructed by Wong & Co, for the plaintiff

Mr Chan Pak Kong, instructed by T H Wong & Co, for the defendant