Jade Assets Ltd and Others v. The Incorporated Owners of East Sun Industrial Centre, New East Sun Industrial Building and East Sun Industrial Building

HCA 2388/2014

[2020] HKCFI 2880

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2388 OF 2014

________________________

BETWEEN

________________________

________________________

J U D G M E N T

________________________

A. Introduction

1.The Plaintiffs (“P1”, “P2”, “P3” and “P4”, and collectively “Ps”) are the owners of 3 adjacent car parking spaces which bear the numbers 7, 8 and 9 (“CPS7”, “CPS8” and “CPS9”).  Those 3 car parking spaces are located on the Ground Floor and Garage of New East Sun Industrial Building, No 18 Shing Yip Street, Kowloon, Hong Kong (the “Premises”).  The Defendant (“D”) is the incorporated owners of the Premises.

2.This is the trial of the dispute between the parties concerning a ramp (the “Ramp”) and metal railings (the “Metal Railings”) constructed by D which Ps say have encroached upon those 3 car parking spaces.

3.Mr Patrick Chong with Mr Martin Ho appeared for Ps.  Mr Kenneth CL Chan with Ms Eunice Yong and Ms Joyce Lai appeared for D.

B.  The factual background

4.The Premises is subject to (1) the Deed of Variation of Crown Lease in relation to Kwun Tong Inland Lot No 73 dated 21 November 1974 registered with the Lands Registry via Memorial No UB1121873 (the “Deed of Variation 1974”) and (2) the Deed of Mutual Covenant dated 11 November 1977 registered with the Lands Registry via Memorial No 1458340 (the “DMC”).

5.The Deed of Variation 1974 contains the following provisions regarding car parking spaces (the “Designated Minimum Specification”)[1]:

“ AND that of the space provided for parking loading and unloading one half shall be used for the parking of private cars and light vans assuming each vehicle to have a turning circle of 24 feet outer radius and to occupy an area of 16 feet x 8 feet with a minimum headroom of 7 feet 6 inches …” (emphasis added)

6.Within the space so provided for parking, car parking spaces have been delineated and marked (the “Car Parking Spaces”).  Amongst them are CPS7, CPS8 and CPS9.  I attach to this Judgment the relevant part of the Approved Ground Floor Flan of the Premises dated 5 May 1978 (the “Approved G/F Plan”)[2] which shows the layout and orientation of CPS7, 8 and 9.

7.The Approved G/F Plan shows that CPS7, 8 and 9 are adjoining and adjacent to one another.  Each of them resembles a rectangle.  At one length of CPS9 stands a wall (the “CPS9 Wall”).  Its other length shares one length of CPS8.  The other length of CPS8 in turn shares one length of CPS7.  Along the other length of CPS7 (the “Affected CPS7 Length”) runs a flight of stairs (the “Old Flight of Stairs”).  On the other side of the Old Flight of Stairs is a column (the “Column”).

8.Between 1 February 2004 and 27 April 2011, Winner Company (Weaving) Limited (“Winner”) had been the registered owner of CPS7 and 9.

9.In around August 2010, D constructed the Ramp with Metal Railings along the Affected CPS7 Length.  There is no dispute as to how they came to be built. One sees from the Approved G/F Plan the Old Flight of Stairs alongside the Affected CPS7 Length.  It used to connect the elevator lobby and the Car Parking Spaces.  In 2006, some owners of the Premises wrote to the Management Committee of D (the “MC”) suggesting that the Old Flight of Stairs should be converted into a ramp so as to make loading and unloading more convenient and efficient.  The suggestion was accepted.  During the several years to come, the project was discussed a number of time during meetings of the MC.  I will come back to some details of those discussions later.  Professionals were then engaged.  Approval from the Building Authority was obtained.  Ultimately, the Ramp with Metal Railings were completed on about 24 August 2010[3].

10.On 27 April 2011, P1 to P3 as tenants-in-common acquired from Winner, among certain other car parking spaces within the Premises, CPS7 and CPS9.

11.On 14 June 2011, P1 to P3 let to D, including CPS7 and 9, 54 of the Car Parking Spaces from 1 June 2011 to 31 May 2014 (subsequently extended to 31 August 2014)[4] (the “Tenancy to D”). 

12.On 17 October 2014, P4 acquired CPS8 from Daiwa Associate (HK) Limited.  P4 and his father Mr Chan Sui Chung (“Chan Senior”) are the directors of P1 to P3.

13.In the same month (ie October 2014), under circumstances which are in dispute, Ps began “restoration works” to remove the Ramp and Metal Railings.  D reported the incident to the police alleging criminal damage.  Chan Senior was arrested. 

C.  The parties’ pleaded cases

C.1.  Ps’ claim

14.Ps rely on (1) the Designated Minimum Specification stipulated in the Deed of Variation 1974, (2) the certified copy of the Layout Plan of the Car Parking Spaces in the Premises (the “2011 Ramp Plan”)[5], and (3) the Approved G/F Plan.  Ps plead that each of CPS7, 8 and 9 the Car Parking Spaces occupies an area of the Designated Minimum Specification[6].

15.Ps aver that after the construction of the Ramp and Metal Railings, the total usable width of CPS7-9 combined has become only 22 feet 6 inches, which is less than the requisite 24 feet according to the Designated Minimum Specification (ie 8 feet x 3) by 1 foot 6 inches[7]. They called the area which has allegedly been encroached upon the “Encroached Area”, which term I will adopt. 

16.On the basis of the above, Ps aver that D has acted contrary to the Designated Minimum Specification, encroached upon CPS7-9, and been in breach of the covenant at Clause 9(m) of the DMC prohibiting parties from acting in breach of inter alia the Deed of Variation 1974[8].

17.According to Ps, they on 16 October 2014 (the “16/10/14 Letter”) notified D that they would conduct restoration works (the “Restoration Works”) to remove the Ramp and Metal Railings, that D had indicated its agreement by marking the word “OK” on the said notice, but that D nevertheless reported the matter to the police, resulting in Chan Senior being arrested[9].

18.Ps plead and claim:

(a)  that D’s conduct has constituted nuisance and/or trespass on their CPS7-9[10];

(b)  that D has “wrongfully interfered with [Ps’] economic interests with an intention to thereby cause loss to [Ps]”[11];

(c)  loss of rental for their alleged inability to lease out CPS7-9 (in the sum of HK$3,000 per month from 16 October 2014 to the date of trial)[12];

(d)  that D has been unjustly enriched in having occupied part of their CPS7-9[13];

(e)  “A declaration that the Encroached Area falls within [CPS7-9]”[14];

(f)  “An injunction restraining [D], whether by itself or its servants or agents or otherwise howsoever, from further encroaching upon [Ps’ CPS7-9]”[15]; and

(g)  “A mandatory injunction directing that [D] to remove at its own cost and expense all structures unlawfully constructed by [D] within the Encroached Area”.[16]

19.Despite Ps’ pleaded case, Mr Chong has in the course of his closing submissions informed this Court and clarified (“Mr Chong’s Clarifications”) that:

(a)  Ps main cause of action, albeit pleaded as “encroachment”, is in fact trespass;

(b)  in the light of the evidence given by Ps’ witnesses that Ps have not suffered any monetary loss[17], Ps are no longer seeking to pursue their monetary claims, but are only pursuing the mandatory injunction;

(c)  all valuation evidence has become irrelevant;

(d)  Ps are not relying on any breach of DMC as a separate cause of action;

(e)  the owners of CPS8 and CPS9 are no longer pursuing their claims against D (as any encroachment would only have been within CPS7 along the Affected CPS7 Length); and

(f)  given (e) above, nuisance as a separate cause of action has become reductant and, in Mr Chong’s own words towards the end of his closing submissions, is going to add nothing to the cause of action based on trespass (because if trespass upon CPS7 can be established, Ps will not need to rely on nuisance; whereas if no trespass upon CPS7 can be established, there could have been no nuisance).

C.2.  D’s defence and counterclaim

20.The Designated Minimum Specification is admitted[18]. D also admits that CPS7-9 are shown on the Layout Plan and the Approved G/F Plan[19].

21.D admits that it constructed the Ramp with Metal Railings adjacent to CPS7 in around August 2010[20].

22.D admits that the width of CPS7 is less than that of CPS8 and 9. It otherwise does not admit that the total usable width of CPS7-9 combined is only 22 feet 6 inches[21].

23.D denies §12 of the ASC.  It avers that the Ramp and Metal Railings do not extend to CPS8, and P4 has no cause of action at all[22].

24.D avers that CPS8 and 9 are not affected by the Ramp and Metal Railings. It denies that there has been any breach of Clause 9(m) of the DMC or any stipulation in the Deed of Variation 1974 insofar as the delineation of the Car Parking Spaces is concerned[23].

25.In the light of Mr Chong’s Clarifications, I am no longer concerned with the part of Ps’ claim relating to CPS8 and 9. 

26.D further avers that the claim of P1 to P3 “is wholly unmaintainable and/or estopped owing to the laches, acquiescence and delay of [P1 to P3]”, that:

(a)  as regards laches and delay[24], P1 to P3 ought to have known of the matters under complaint when they bought CPS7 in April 2011, but that they did not make their first complaint until October 2014;

(b)  as regards acquiescence[25]:

i.  Winner did not object to the proposed construction of the Ramp or the related drawings despite of the fact that its representatives were on D’s management committee,

ii.  Winner “ought to know that the intended construction of the Ramp would encroach upon [CPS7]” and/or “acquiesced and/or consented to the encroachment of [CPS7]”;

iii.  Winner consented in D’s expenditure of money for construction of the Ramp and Metal Railings;

iv.  The estoppel is binding on P1 to P3;

v.  P1 to P3 had been using CPS7 since 2011, but did not complain until October 2014;

vi.  “It is averred that [P1-P3] acquiesced to the existing and/or the construction of the Ramp and Metal Railings.  [P1-P3] had waived their rights against [D] and/or is estopped from raising the objection to the construction of the Ramp and the Metal Railings next to [CPS7]”;

(c)  It would be unconscionable, inequitable or unjust for Ps to deprive D of its expected right as Winner had induced, encouraged or allowed D to believe that the Ramp could be constructed according to the proposed Ramp drawings, and that D had spent money and acted to its detriment as a result of its belief[26].

27.D denies that there has been any agreement with Ps regarding the restoration works[27]. Ps have demolished part of the Ramp and the Metal Railings on 19 October 2014 without D’s consent.  Despite repeated requests, Ps have failed to remove construction debris of the damaged part of the Ramp and Metal Railings.

28.D counterclaims for:

“ (1)  A mandatory injunction directing [Ps] to remove the construction debris at the Encroached Area;

(2)  A declaration for [D] to repair the Ramp and the Metal Railings to its original state at the Premises near [CPS7] according to the approved plan dated 9^th May 2011;

(3)  Damages for [Ps’] wrongful demolition of part of the Ramp and Metal Railings;

(4)  Damages to be assessed.”

C.3.  Ps’ reply

29.Insofar as still relevant given Mr Chong’s Clarifications, and in gist, Ps deny that the various equitable defences pleaded by D are applicable to P’s common law claim[28]. They aver that in any event, they were only able to find out the encroachment upon expiry of the tenancy in favour of D.  Ps plead further that any purported act of acquiescence or consent by Winner cannot as a matter of law be binding upon Ps since such purported estoppel can only be personal as opposed to proprietary in nature.  They plead that the D is in any event debarred from relying on any of the equitable defences for failing to come with clean hands[29].

D.  The issues

30.Despite Mr Chong’s Clarifications, there are still a number of issues which remain live and call for determination.  They may be grouped as follows:

(a)  The Trespass Issue — whether the Ramp and Metal Railings encroached upon CPS7;

(b)  The Defences Issues — whether the pleaded defences or any of them can be established;

(c)  The Relief Issue — if Ps have made out their claim on trespass, what relief sought by them, if any, should be granted;

(d)  The Counterclaim — whether D has made out its counterclaim, and if so what relief sought by D, if any, should be granted.

E.  The Trespass Issue

31.The issue is a factual one — whether the Ramp has been built on part of the area where CPS7 originally occupied.

32.On this issue, each side has called one expert:

(a)  Ps called Mr Nathan Lee (“Lee”).  He has prepared one report (“Lee/Report”)[30];

(b)  D called Mr Leo Cheung (“Cheung”), who has also prepared one report (“Cheung/Report”)[31].

Together, they have prepared one joint report (“Joint Report”)[32].

33.Expertise is not in dispute.

34.I find both experts to be honest witnesses.  Mr Chan has cited Chinachem Charitable Foundation Ltd v Chan Chun Chung, unrep, HCAP 8/2007, 2 February 2010 per Lam J (as he then was) at §§483-489, 498 and 500 on the applicable considerations when assessing expert evidence.  I apply those considerations and principles.

35.The methodology adopted by and conclusion reached by Lee may be summarized as follows:

(a)  He studied the Approved G/F Plan.  The total size of CPS7-9 marked thereon is 24 feet by 16 feet;

(b)  He studied the approved building plan of A&A works in respect of the construction of the Ramp dated 9 May 2011 (ie the 2011 Ramp Plan). As no dimensions are marked thereon, he measured CPS7-9 marked thereon and worked out mathematically their actual size;

(c)  He took measurements on-site;

(d)  He took into account the Hong Kong Planning Standards and Guideline in relation to the minimum dimensions for standard car parking spaces;

(e)  Having comparing the measurements, he concluded that the Ramp has been built on part of CPS7.

36.The methodology adopted by and conclusion reached by Cheung may be summarized as follows:

(a)  He retrieved a number of plans which depict CPS7-9:

(i)  the Approved G/F Plan;

(ii)  the assignment plan attached certain Assignment of 11 February 1980[33] (the “1980 Assignment Plan”);

(iii)  the approved building plan of A&A works on ground floor of the Premises dated 11 December 1981 (the “1981 AA Plan”); and

(iv)  the 2011 Ramp Plan;

(b)  He measured the widths of CPS7-9, the Old Flight of Stairs and the Ramp on those plans.  He then “scaled off the width dimensions”[34] — by which he meant that he worked out mathematically their actual dimensions in according with the scales of those plans;

(c)  He took measurements on-site;

(d)  He concluded[35] that;

“ Due to the various deviations found, I cannot conclude the Ramp has encroached the CPS. However, it is observed that the width dimensions required by the Deed for the CPS and the total width of both the Ramp and the CPS stipulated in 1^st & 2^nd Building Plans cannot be provided in the actual on-site dimension of only 8.3m (width).”

37.For the following reasons, I accept Lee’s conclusion that the Ramp has been built onto CPS7.

E.1.  The dimensions of CPS7 when originally built

38.In order to decide whether the Ramp has been built onto CPS7, one needs to consider first of all the dimensions of CPS7 when the Premises were originally built.

39.The most important document and plan when deciding the original dimensions of CPS7 are the Deed of Variation 1974 and the Approved G/F Plan. 

40.The Deed of Variation 1974 expressly provides for the Designated Minimum Specification, which is 16 feet x 8 feet for each car parking space.

41.Mr Chan submits[36] that the Designated Minimum Specification is no more than a “design assumption”.  I do not accept that submission.  The Deed of of Variation 1974 expressly stipulates[37] that:

“ … it is hereby mutually agreed between the parties hereto to the intent that this agreement shall be binding on and enforceable against the parties thereto and their respective successors in title …”

42.The total dimensions of CPS7-9 are expressly marked on the Approved G/F Plan.  The marked dimensions are 24 feet x 16 feet. Those dimensions are consistent with the Designated Minimum Specification.  When the total space occupied by CPS7-9 are subdivided into 3 equal parts, each of CPS7-9 would have the dimensions of 16 feet x 8 feet.

43.Measurements actually marked on the Approved G/F Plan are intrinsically more reliable than dimensions worked out and deduced from the scale-off method, which method Cheung primarily relied upon.  I accept in this regard Lee’s opinion that in order to obtain the accurate dimensions, the general practice is to use the indicated dimensions on plan rather than adopting the scale-off method[38].

44.Another relevant consideration concerns the original width of the Old Flight of Stairs:

(a)  CPS7-9 and originally the Old Flight of Stairs (and subsequently the Ramp) were (and are) located between the CPS9 Wall and the Column;

(b)  It is more unlikely than not that the distance between CPS9 Wall and the Column (both structural) (the “Gap”) has ever changed;

(c)  According to the on-site measurements taken by both experts, the Gap is 8.29m to 8.30m wide;

(d)  Applying the conversion factor of 0.3048[39], the Gap is 27.198 feet to 27.231 feet;

(e)  The width of the Old Flight of Stairs is also marked on the Approved G/F Plan.  The marking is however and unfortunately not clear.  The consensus between the parties is that it is either 3 feet or 5 feet;

(f)  If the width of the Old Flight of Stairs were 5 feet, given the total width of CPS7-9 of 24 feet (as is clearly marked), the overall width of the Old Flight of Stairs together with CPS7-9 would have been 29 feet, which could not have fit in the Gap;

(g)  If the width of the Old Flight of Stairs was 3 feet and given the total width of CPS7-9 of 24 feet (as is clearly marked), their total width would be 27 feet, which tallies well with the width of the Gap as measured on-site;

(h)  I note Cheung’s evidence that he has worked out the width of the Old Flight of Stairs, using the “scaling-off” methodology, as being 1.34m (converted as 4.396 feet), which is wider than 3 feet;

(i)  I accept Lee’s evidence that scale-off is not an appropriate method of measurement in the present case as error may occur during scanning and copying[40]. A finding that the width of the Old Flight of Stairs is wider than 3 feet would involve, given the width of the Gap, a finding that the overall width of CPS7-9 being 24 feet was wrong, which latter finding, given the clear marking on the Approved G/F Plan, is my view not justified;

(j)  Related to the above is Cheung’s evidence given in the course of cross-examination, and Mr Chan’s submission arising, that CPS7-9 might not have been built in accordance with the Approved G/F Plan, and that the architect’s intention might not have been accurately implemented when construction works were actually carried out.  I reject that evidence and the submissions arising as being conjecture.

45.In Cheung/Report, Cheung referred to and relied on the 1980 Assignment Plan.  He worked out from it (again adopting the “scale-off” methodology) the width of CPS7-9.  His findings were that they deviated from the dimensions as marked on the Approved G/F Plan.  Cheung then relied on those deviations.  I note however that the 1980 Assignment Plan is not an approved building plan, but just a plan attached to an assignment.  I accept Lee’s opinion[41] that the Assignment Plan is irrelevant for the purpose of evaluating the dimensions of CPS7-9 as assignment plans may be used for indication of location only, and that the dimensions of CPS7-9 are not marked thereon.  I note further that the measurements of CPS7-9 which Cheung has worked out from the 1981 AA Plan, which is another approved plan, are quite consistent with the Approved G/F Plan.

46.On the evidence before me, I find on balance that:

(a)  CPS7-9 when built had the overall dimensions of 24 feet x 16 feet;

(b)  upon delineation of that overall space into 3 equal parts, each of CPS7-9 (and most importantly CPS7) had the dimensions of 8 feet x 16 feet; and

(c)  the width of the Old Flight of Stairs was 3 feet.

E.2.  Whether CPS7 encroached upon when the Ramp was constructed in 2010

47.The next question is whether CPS7 has been encroached upon by the Ramp.

48.According to the 2011 Ramp Plan, and consistent with the on-site measurements, the width of the Ramp is 1.42m (converted as 4.65 feet).  The Ramp is wider than the width of the Old Flight of Stairs.  The dimensions of CPS7 have consequentially become smaller.

49.I do not accept Cheung’s conclusion as cogent or convincing.  As I have indicated above, I am not convinced that scale-off is an accurate methodology in the present case.  He said that he “cannot conclude the Ramp has encroached the CPS”.  But the primary basis of his conclusion is the “various deviations” he has found. I have expressed my view above in respect of the problem with the 1980 Assignment Plan, which is one source of the deviations.

50.In my view, the evidence is quite clear. I accept the conclusion reached by Lee (as marked up in green on Appendix J of Lee/Report[42]) that part of the Ramp was built on and has encroached upon CPS7.  The part of CPS7 that has been encroached upon (marked in green on Appendix J) is a strip of CPS7 of 445mm wide which runs along the entire length of CPS7.  That is the Encroached Area. 

E.3.  Conclusion on this issue

51.Converted into inches, the width of the strip of CPS7 which has been encroached upon is approximately 17.52 inches. The total dimensions of that strip is hence 16 feet x 17.52 inches, which approximate the Encroached Area pleaded at §12 of the ASC.

52.My conclusion is that to the extent I have found above, CPS7 has been encroached and trespassed upon.

53.For completeness, I record that Mr Chong has taken a pleading point.  He submits that it is not D’s pleaded case that CPS7-9 (and in particular CPS7) had been built smaller than the Approved G/F Plan, so that D should not be permitted to run the point I have summarized in §44(j) above.  Given D’s denial of §12 of the ASC, my view is that D is entitled to take that point.  But given my conclusion above, the point is no longer material.

54.On the relevant law on trespass, I accept Mr Chong’s submissions[43] that:

(a)  Trespass to land consists of any unjustifiable intrusion by one person upon land in the possession of another, and that the slightest crossing of the boundary is sufficient — Clerk & Lindsell on Torts (22^nd ed, 2017) §19-01;

(b)  “It is no defence that the trespass was due to a mistake of law or fact, provided the physical act of entry was voluntary” — Clerk & Lindsell §19-06; and

(c)  Trespass is actionable per se.

55.Subject to the pleaded defences which I will next consider, the case of P1-P3 on trespass has been made out. 

F.  The Defences Issues

F.1.  The factual witnesses

56.The parties have each called one factual witness:

(a)  P4 for Ps:

(i)  P4 has given 2 witness statements (“P4/WS1” and “P4/WS2”);

(ii)  As has been mentioned above, P4 is a director of P1 to P3;

(iii)  His evidence primarily concerns the acquisition by Ps of, amongst others, CPS7-9, the discovery of the encroachment, the Restoration Works and the damages which Ps have allegedly suffered;

(iv)  he confirms that none of Ps have ever made any representations to D that it may trespass on CPS7-9[44].

(b)  Chan Kwok Yung (“Chan KY”) for D:

(i)  Chan KY has given one witness statement (“Chan KY/WS”);

(ii)  he had between about 2004 (or 2005) and August 2014 a committee member of the MC;

(iii)  The most important aspect of his evidence relates to the construction of the Ramp.  He has referred to 5 sets of minutes (the “5 Sets of Minutes”) of 5 meetings of  the MC (or its executive committee) (the “5 Meetings”) during which the construction of the Ramp was discussed.  Those meetings took place on  25 November 2006, 10 February 2007, 1 March 2008, 15 April 2008 and 26 October 2010 (the “25/11/06 Meeting”, “10/2/07 Meeting”, “1/3/08 Meeting”, “15/4/08 Meeting” and “26/10/10 Meeting” respectively);

(iv)  He confirms that a representative of Winner (陳劍華, “Winner’s Rep”) was on the MC, that he was aware of the construction of the Ramp, and that he had never raised any objection in relation to the proposal and/or construction of the Ramp;

(v)  He also gives evidence on the Restoration Works;

(vi)  He claims that Ps have consented to the construction of  the Ramp and acquiesced in any alleged encroachment[45], that Ps have delayed in their complaint[46], and that Ps are estopped from making the present claim[47].

F.2.  Credibility of the factual witnesses

57.I remind myself when considering a witness’ credibility the importance of considering the inherent likelihood or unlikelihood of the witness’ evidence, the consistency of the witness’ evidence with undisputed or indisputable evidence, with contemporaneous conduct and documents, and the internal consistency of the witness’s evidence.  I need to consider the totality of the evidence.  I warn myself against attaching undue weight on demeanour, though demeanour is obviously relevant when considering credibility.

58.I have considered Mr Chan’s submissions attacking the credibility of P4.  I have considered Mr Chan’s cross-examination in relation to the manner in which P4 (and his father) inspected the car parking spaces before purchase.  I do not accept Mr Chan’s submission that his evidence in that regard is inherently improbable.  Ps were purchasing 54 car parking spaces in one lot.  He said that he would not realize by visual inspection that CPS7 had become smaller.  He explained further that in his mind, Ps could rectify any problem after they had become the owners.  I accept that there are some inconsistencies between his evidence in P4/WS1 and oral evidence as to the rental situation of Ps’ car parking spaces.  But those inconsistencies relating to quantum are in my view not sufficient to suggest that P4 is overall an incredible witness.

59.I find P4 in general to be a credible witness.

60.I have considered the evidence given by Chan KY.  I do not find any inherent improbability or inconsistency (whether internal inconsistency or any inconsistency with documents or other established facts) which materially affect his credibility.  I find him in general to be a credible witness.

61.I observe on the other hand that the evidence given by P4 and Chan KY in fact mainly addresses different issues.  In particular, P4 was not involved during the process when the construction of the Ramp was discussed by the MC.  Chan KY cannot give direct evidence on Ps’ inspection of the Car Parking Spaces or the Restoration Works.  In my view, in addition to (or as opposed to) credibility, the more important question is whether the evidence as a whole is sufficient to establish the pleaded defences.  It is a matter of consideration of the evidence, and in particular that of Chan KY.  This is what I will turn to next.

F.3.  Approval of the construction of the Ramp by the MC

62.One main factual basis relied upon by D is that the construction of the Ramp had been approved by the MC.  This basis should first be considered and analyzed.

63.I have considered the 5 Sets of Minutes.  Winner’s Rep was indeed on the MC during that period.  The proposal for the construction of the Ramp had in fact been approved.  No objection of the same had been recorded.  The MC did approve the construction of the Ramp.

64.But importantly, there was on the face of the 5 Sets of Minutes nothing which show that any building plan of the Ramp had been tabled for discussion during those meetings.  Nor was there any record suggesting that there had been concern that the Ramp to be built might encroach upon CPS7, and that the MC approved the encroachment.

65.In fact, unless the building plan for the Ramp had been tabled, the MC members would have had no idea that the Ramp when built, which I have found, would encroach upon CPS7.

66.In this regard, I have considered the following relevant evidence:

(a)  In the course of Chan KY’s cross-examination:

(i)  he accepted that during the 25/11/06 Meeting, 10/2/07 Meeting and 1/3/08 Meeting, no drawing plan of the Ramp had been tabled for discussion.  That must be right.  According to the contents of those minutes, the concept of building the Ramp was either at a very early stage, or that the MC was still talking about who to engage to prepare the drawing;

(ii)  in respect of the 15/4/08 Meeting, Chan KY was not sure whether any building plan of the Ramp was tabled.  His evidence in this regard is as follows:

「 問： 唔，唔。好喇，咁你睇下第454[48]頁吖，第5段吖，或者睇睇。

答： 係。係，睇咗。

問： 咁呢度就話，基本上就通過就搵另外一個人士去做畫則同埋報價，同埋入則喇，係咪？

答： 係。

問： 咁喺呢一刻嚟講嘅話，都冇任何圖則或者study嘅設計係畀有關嘅會員去考慮，係咪？

答： 睇下先。當時未有收到有關報價，向授權人、執委跟進。係，呢度係冇寫到有提供個則畀我哋睇。

問： 因為根本上都未搵到人，諗住搵人之嘛，去畫則，係咪？佢一定係冇㗎。

答： 唔，唔。

問： 同唔同意呀？

答： 因為個日期，我都諗緊嗰啲日子，因為由黃壙唔做到國浩（譯音）做，有冇收到報價？究竟畫咗未？呢個我真係唔係好sure。

問： 我向你指出，係未有嘅，同唔同意？

答： 唔。其實我想問，佢畫則會唔會有個日期喺個--喺個則嗰度？

問： 唔。

答： 你咁樣考我啲記性，我真係--即係如果佢嗰張則有佢畫好嘅日期，咁係咪大家唔使係度估？

問： 我哋暫時想知道你當其時記唔記得啫，係。

答：   我--我咪答咗你，我唔sure，唔肯定。」

(iii)  In any event, it is relevant to note that the 15/4/08 Meeting was a meeting of the executive committee (but not of the MC).  As confirmed by Chan KY during cross-examination, Winner was not represented on the executive committee meeting;

(b)  In respect of the 26/10/10 Meeting, according to the minutes, the only reference to the Ramp related to a record that the construction of the Ramp was completed on 24 August 2010 and that it had been open for the use of all owners.  There was otherwise no record of the construction of the Ramp having been discussed;

(c)  I note that at a later state of his cross-examination, Chan KY gave the following answer:

「 問： 唔。明白。咁其實有關嘅斜坡--斜路嗰個圖則或者設計，從來都冇喺有關嘅委員會係畀過啲委員睇過同埋考慮，係咪？

答： 呢個我就唔同意，因為其實法團唔止做一個工程，我印象中我都睇過幾個清--工程嘅圖則，所以冇理由--冇理由冇圖則畀--畀啲委員睇嘅，一定有。」

(d)  However, given the contents of the 5 Sets of Minutes and his earlier answers, and despite my finding that Chan KY is an honest witness, I do not find this answer of his to be a reliable one;

(e)  In any event, even if the MC had been shown some building plans of the Ramp, the questions remain: what were those plans and what did they show?  If they did not show any encroachment, the MC, by approving them, would be not regarded as having approved expressly or impliedly the encroachment;

(f)  More importantly, the following evidence given by Chan KY during cross-examination suggests that the MC had never contemplated any encroachment, never approved (expressly or impliedly) any, and on that basis, the Winner’s Rep had also never approved (expressly or implied) or acquiesced in any:

「 問： 咁即係喺你哋嘅認知嚟講，就係起嗰個斜路係冇侵佔入到去[CPS7]裡面--個範圍內，係咪？

答： 係吖，冇錯，因為其實你Winner嘅代表喺度，如果我哋侵佔咗佢車位，佢一定會反對㗎嘛。

…

問： 向你指出，Winner就冇喺任何有關管理委員會或者執行委員裡面係容許IO係起個斜坡喺[CPS7]度嘅，同唔同意呀？從來冇容許過。

答： 唔同意，因為我哋從來冇要求要喺個[CPS7]上面起個斜台，即係IO從來都冇要求要喺個[CPS7]上面起個斜台。

…

問： 唔。咁其實Winner亦都係唔知道起嗰個路--嗰個斜坡係會起喺[CPS7]度嘅，你同唔同意？

答： 梗係唔同--唔同意喇，梗係。即係其實如果Winner唔同意嘅話，你唔好話起個斜台，你就算連拆條樓梯都唔得，因為條樓梯佢哋起㗎嘛，即係你唔好講起個斜台。

問： 唔。即係你唔同意嘅原因，係因為喺你角度嚟睇，就係嗰條斜路係冇侵佔到[CPS7]嘅，係咪？

答： 唔係凈係喺我哋個角度，其實IO嘅原意，由起呢個斜台個頭一--頭一個會開始，從來冇人要求過要起喺嗰個[CPS7]上面。即係如果我哋要求起喺[CPS7]，Winner都唔會同意。

問： 明白。咁就...」

67.A difference has to be drawn between the following two matters: approval of the construction of the Ramp by the MC on the one hand, and approval of the encroachment by the Ramp upon CPS7.  In my view, whilst there is clear evidence of the former, there is none in respect of the latter.

68.At §9(c)(ii)(e) of the AD&C, D pleads that “Winner did not object the proposed Ramp drawings”.  D has failed to make out that averment.

F.4.  Acquiescence

69.At section V.A to V.D of his written closing, Mr Chan deals with D’s defences.  I will consider them in turn.

70.Mr Chan addresses the defence of acquiescence at section V.A of his written closing[49].

71.Mr Chan refers me to the following passages from Grand Power International Limited v Chan Sing Hoi Enterprises Limited and Others, unrep, LDBM 329/2014, 1 November 2018, that:

“ 92. In Freder Centre (IO) v Gringo Ltd, Chu JA summarized the defence of acquiescence that:-

‘ 26. Hence, to succeed in a defence of acquiescence, it must be shown firstly, there was on the part of the plaintiff, an assent or lying by in relation to the acts of another person; and secondly, in view of the assent or lying by and consequent acts it is unjust in all the circumstances to grant the relief in question: see Spry, Equitable Remedies, (9^th ed.), p.56.’

93. In Yick Fung Holdings Ltd v Sandwood Ltd, Le Pichon JA dealt with the issue of knowledge for the purpose of establishing acquiescence and held that:-

‘ (1) It is sufficient that at the relevant time the party concerned knew of the facts or matters that gave rise to his right to equitable relief, even although he may not have fully understood, as a question of law, the rights that he possessed. The paramount question relates to the justice or injustice of granting the particular relief that is sought and the degree of knowledge required in any situation must depend on all other circumstances. See Spry on Equitable Remedies, 6^th ed, pp 440-442.

(2) It is thus sufficient that the party knew the facts ‘constituting the title to relief’. See Spry, p 431; Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 at 241.

(3)  It is ordinarily sufficient that the plaintiff has been put on suspicion, that is, that he is aware of sufficient matters to raise in his mind a doubt whether an infringement of his rights has taken place.  See Spry, p 431; Marquis of Clanricarde v Henning (1861) 30 Beav. 175, 54 ER 855.’ ”

72.Mr Chan then submits[50] that:

“ Ps apparently did not do much, if any, to follow up on the size and dimension of CPS 7. Nor had the Ps seen fit to instruct some other persons to follow up the matter. Further, as is not in dispute, the Ps did not make any complaint until the first complaint letter sent out on 16/10/14 [C/483]. In short, Ps had simply allowed the Ramp and Metal Railing to remain there for about 3 years without taking any steps before making any complaint. It is plain as a pikestaff that there was requisite knowledge on the part of the Ps for D to set up the defence of acquiescence.” [All original emphasis]

73.I do not accept those submissions.  Mr Chan has not pointed to any evidence in support of his submissions that “there was requisite knowledge on the part of the Ps for D to set up the defence of acquiescence”, and I do not see any.  Nor in my view any sufficient basis for an inference to that effect be drawn.

74.In this regard, I note P4’s evidence at §7 of P4/WS1 that it was only after the Tenancy to D had ended and after he had acquired CPS8 when he took some rough measurements of CPS7-9, and that it was only then when he became aware of the encroachment.  I find his evidence in this regard not inherently improbable, and I accept the same.

75.In effect, Mr Chan is relying on the absence of any action on Ps’ part to follow up on the size and dimensions of CPS7 and the alleged lateness of Ps’ complaint to support the defence of acquiescence.  In my view, those inaction, even if they were, are not sufficient by themselves to support the defence of acquiescence as discussed in the authorities cited to me.

F.5.  Representation

76.Mr Chan next[51] addresses the issue of representation.

77.Mr Chan submits that a representation can be implied by conduct. He relies on Grand Power International at §103 citing Freder Centre.  As a matter of law, that in my view is correct.

78.Mr Chan then states[52] that

“ Ds [sic] case is that Winner had acquiesced the construction and the existence of the Ramp and the Metal Railings and P1-P3 are bound by this… The fact that that [sic] the IO had the intention to convert the Staircase to the Ramp must be clear to Winner. Yet, Winner had not raised any complaint and was in fact part of the MC that approved its construction. On balance, Winner must be aware of construction of the Ramp and had acquiesced in it … Thus, the inaction of Winner is sufficient to give rise to an inference of an implied representation which encourages D to believe or misbelieve that D is entitled to construct the Ramp or that the Ramp will be tolerated.”

79.I have dealt with the evidence relating to the 5 Meetings.  In his submissions, Mr Chan has failed to address the distinction between consenting to the construction of the Ramp on the one part and consenting to (or acquiescing in) the encroachment of the Ramp upon CPS7 on the other.  There has been no such consent or acquiescence, still less any representation, by Winner.  I have explained why.

80.I reject Mr Chan’s submission in this regard.

F.6.  Detrimental Reliance

81.Mr Chan next[53] addresses the element of detrimental reliance.

82.That submission is premised upon Winner having made the representation discussed above[54], which I have rejected.  I reject therefore also the existence of any detrimental reliance.

F.7.  Binding on successor-in-title

83.Mr Chan next[55] addresses the law as to whether any acquiescence by a predecessor-in-title would be binding upon their successor-in-title.  He submits that:

“ Since Winner would be estopped against the D, P1-P3 being successor-in-title who derived the interest and title on the property from Winnie [sic] waiving the breach, cannot be in a better position that the predecessor-in-title which constituted acquiescence.”

84.On the evidence, I am not satisfied that Winner had made any representation, expressly or impliedly, that the encroachment would be tolerated or waived.  I have explained why.  I have also rejected any detrimental reliance.  This issue of law simply does not arise for determination and I express no view thereon[56].

F.8.  Waiver

85.Mr Chan then at section B of his written submissions addresses the defence of waiver.

86.Mr Chan submits that one of the element of waiver is an unequivocal representation by the party either by words or conduct that it will forgo certain rights.  He then submits that:

“ …Regarding the issue of knowledge, the Ramp is constructed in such a patent and obvious manner in the Premises, that Winner must have been fully aware of it. There was inaction of Winner for at least 3 years in the present case.”

87.Again, Mr Chan has with respect failed to address the distinction between knowledge of the Ramp and knowledge of any encroachment. 

88.There is no evidence of any representation of the type which D contends Winner has made, and still less an unequivocal one.

F.9.  Proprietary Estoppel

89.Mr Chan next addresses at section C of his written submissions the issue of proprietary estoppel.

90.Again, the basis of the defence is the alleged action or non-action by Winner at the time when the construction of the Ramp was discussed during the 5 Meetings. In my view, the evidence does not support any estoppel whether by “acquiescence”, “standing by” or “representation”.

91.I reject those submissions.

F.10.  Laches

92.Mr Chan puts D’s case as follows:

“ It is crystal clear that Winner has failed to assert its rights over CPS 7 as against the construction of the Ramp, whether before, during, or after its construction. The lapse of time in the present case as stated hereinabove must be taken into consideration and the defence of laches is equally applicable against P1-P3 as Winner’s successors-in-title.”

93.The construction of the Ramp per se did not give rise to or affect any of Winner’s right over CPS7 which it needed to “assert”.  I reject those submissions. 

94.In any event, I accept P4’s evidence at §7 of P4/WS1 that it was only after the Tenancy to D had ended and after he had acquired CPS8 when he took some rough measurements of CPS7-9, and that it was only then when he became aware of the encroachment. 

F.11.  Unconscionability etc 

95.I have considered all of Mr Chan’s submissions made in support of D’s pleaded defences.  I reject all of them.

96.For completeness, I refer also to §9(d) of the AD&C.  Therein, D pleads further and/or alternatively that “it would be unconscionable, inequitable or unjust for [Ps] to deprive [D] of its expected right”.  The pleaded particulars in support are:

“ a. Winner had induced, encouraged or allowed [D] to believe that the Ramp could be constructed according to the proposed drawings as pleaded in paragraph 9(c)(ii)(e) hereinabove;

b. Money was spent at the consent and/or encouragement of Representative of Winner, [D] had acted to its detriment as a result of its belief;

c.  it would be inequitable to defeat [D’s] expectation.”

97.I have ruled above that D has failed to make out its averment at §9(c)(ii)(e) of the AD&C.  I have also ruled that D has failed to establish any detrimental reliance.  I rule therefore that the plea at §9(d) of the AD&C is also not made out.

F.12.  Conclusion on the Defences Issues

98.For the reasons set out above, I reject all of them.

99.I hold that D has failed to establish any of the pleaded defences.

G.  The Relief Issue

100.I repeat Mr Chong’s Clarifications.  The only cause of action which is still being pursued is the one on trespass, and that it is only pursued by P1 to P3 in respect of CPS7.

101.I have rejected all of D’s pleaded defences.

102.I have rejected D’s plea that “it would be unconscionable, inequitable or unjust for [Ps] to deprive [D] of its expected right”.

103.At §58 of his closing submissions, Mr Chan submits that Ps are not entitled to the injunction relief as of right.  He then submits at §§59 and 60:

“ 59. In addition, special circumstances exist in the present case for refusing the mandatory injunction:-

a. Demolition of the Ramp will cause disproportionate hardship to D, in particular the great expense has been incurred and to be incurred.

b. As the approval of the Buildings Department of the Ramp has been obtained, that means no imminent danger and no urgency to order demolition of the same.

60.  Hence, it would be unjust and inequitable to grant the mandatory injunction in respect of the demolition of the Ramp.”

104.None of those matters have been pleaded. 

105.Mr Chan has not identified what “hardship” or “great expense” he was referring to.  In any event, the Ramp is only a piece of small scale construction work.  I do not see why and how its demolition will be disproportionate to the restoration of property rights of P1-P3 which have been infringed.

106.Whether the Ramp poses any “imminent danger” is with respect irrelevant.

107.In respect of §1 of the prayer in the ASC:

(a)  Ps seek “A declaration that the Encroached Area falls within Car Parking Spaces Nos 7-9”;

(b)  I grant, not in favour of all Ps, but only in favour of P1-P3 a Declaration that the Encroached Area (as marked up in green on Appendix J of Lee/Report) falls within CPS7.

108.In respect of §3 of the prayer in the ASC:

(a)  Ps seek “An injunction restraining [D], whether by itself or its servants or agents or otherwise however, from further encroaching upon [Ps’] Car Parking Spaces Nos 7-9”;

(b)  I grant, not in favour of all Ps, but only in favour of P1-P3 an injunction restraining D, whether by itself or its servants or agents or otherwise however, from further encroaching upon CPS7.

109.In respect of §4 of the prayer in the ASC:

(a)  Ps seek “A mandatory injunction directing [D] to remove at its own cost and expense all structures unlawfully constructed by [D] within the Encroached Area”;

(b)  I grant that mandatory injunction sought, not in favour of all Ps, but only in favour of P1-P3.

110.I dismiss all of Ps’ other claims, and refuse all other forms of relief Ps otherwise seek.  

H.  The Counterclaim

111.With respect, the Counterclaim was quite ineptly pleaded.  No specific cause of action has been pleaded.  I note further that in his written closing, Mr Chan has not dealt with D’s counterclaim.

112.The material paragraphs appear to be §§10 and 11 of the AD&C, that:

“ 10. Save that [Ps] had written to [D] notifying [D] that [Ps] would conduct Restoration Works to remove the Ramp and Metal Railings, the rest of paragraph 13 is denied. [D] further denied that there was any agreement with [Ps] regarding the Restoration Works. On 18^th October 2014, ISS EastPoint Property Management Limited sent a letter to [Ps] and urged them to put the Restoration Works on hold pending the clarification of the ownership of the Car Parking Space area.

11.  Save that [Ps] demolished part of the Ramp and the Metal Railings on 19^th October 2014 without [D’s] consent and [D] reported the incident to the police of criminal damage to [D’s] property, the rest of paragraph 14 is not admitted.  Despite repeated requests by [D], [Ps] failed to remove construction debris of the damaged part of Ramp and Metal Railings.”

113.I note that there are no particulars as to where the debris was allegedly left.  But then, at paragraph (1) of the prayer, D seeks a mandatory injunction “directing [Ps] to remove the construction debris at the Encroached Area”.  But the term “Encroached Area” has been used in the ASC to denote the part of CPS7 which has been encroached upon by the Ramp.  That being so, the debris, even if there has been any, has been left within CPS7, which is owned by P1-P3.

114.Then, at §46 of Chan KY/WS, he claims that “it brought to the IO’s attention that the debris caused by [Ps’] demolition works … actually narrowed the driveway and passages in the Loading & Unloading and Garage”.  No particulars have however been provided as to how “the driveway and passages in the Loading & Unloading and Garage” had been narrowed.

115.I dismiss that limb of the counterclaim.

116.D also seeks, at §2 of the prayer in the AD&C:

“ A declaration for [D] to repair the Ramp and Metal Railings to its original state at the Premises near [CPS7] according to the [2011 Ramp Plan].”

117.Given my finding that the construction of the Ramp has led to the CPS7 being encroached and trespassed upon, I refuse to grant the declaration sought.

118.D also seeks, at §3 of the prayer, “Damages for [P’s] wrongful demolition of part of the Ramp and Metal Railings”.

119.Given my finding of trespass, I do not find the Restoration Works to be “wrongful”.

120.For completeness, I also deal with the 16/10/14 Letter.  If necessary, I would make the following findings:

(a)  That letter was issued by Ps to D;

(b)  It bears the date of 16 October 2014.  It reads inter alia that:

「 …我司將於2014年10月19日於[CPS7, 8, 9]進行還原,並進行油漆工程…」

(c)  Upon receipt by or on behalf of D, someone signed and wrote on it (at the bottom right hand corner) the word “OK”, and applied against it a chop of the management office of the Premises.  Immediately under the chop is the handwritten date of “18-10-14”;

(d)  Neither P4 nor Chan KY had personal knowledge as to when that letter was delivered by Ps to D;

(e)  In the cautioned statement given by Chan Senior to the police after his arrest, he said that the notice was given on 18 October 2014[57];

(f)  On balance, I find that the 16/10/14 Letter was delivered on 18 October 2014, on which date the word “OK” was written in reply;

(g)  I do not accept the argument put forward on behalf of D that “OK” only acknowledged receipt of the letter.  My view is that it reasonably conveyed the message that the works set out in the 16/10/14 Letter could be carried out;

(h)  D refers to another letter of 18 October 2014 from D to Ps[58]. Although it bears that date, P3 was not clear as to when Ps received it.  Chan KY, when put to him that it was only on a later date when the letter was delivered to Ps, also said that he was not clear;

(i)  That letter reads:

「 法團及管理公司原則上不反對 貴司對自己車位進行改善工程，但由於車場每個業權的正確面積和位置現正由法團聘用之專業人士去厘定，故此，建議 貴司暫時擱置有關工程至業權位置清晰為止才進行。法團及管理公司重申，任何因未獲批准的工程而產生之法律責任，法團及管理公司並不負責，並會保留一切追究法律責任之權利。」

(j)  Hence, in addition to the endorsement of “OK” on the 16/10/2014 Letter, it was also said in the other letter of 18 October 2014 that D “原則上不反對貴司對自己車位進行改善工程”;

(k)  There was clearly room for misunderstanding there.

121.I come back to my observation above that D has not pleaded any specific cause of action in its AD&C.  Mr Chan has not specified what elements D has to establish to prove this limb of its counterclaim.  But based on what are before the court, I am not satisfied that D has proved its case that there has been any “wrongful” demolition of the Ramp.

122.I dismiss D’s counterclaim.

I.  Overall disposition

123.In respect of Ps’ claim:

(a)  I grant only in favour of P1-P3:

(i)  a Declaration that the Encroached Area (as marked up in green on Appendix J of Lee/Report) falls within CPS7;

(ii)  an injunction restraining D, whether by itself or its servants or agents or otherwise however, from further encroaching upon CPS7; and

(iii)  A mandatory injunction directing D to remove at its own cost and expense all structures unlawfully constructed by D within the Encroached Area;

(b)  I dismiss all of Ps’ other claims, and refuse all other forms of relief Ps otherwise seek.

124.I dismiss D’s counterclaim and refuse all forms of relief D seeks.

J.  Costs

125.Mr Chong’s Clarifications were only made late when parties were making their closing submissions.  The late abandonment of part of Ps’ pleaded claims also has costs consequences.

126.The net effects of Ps’ stances and my conclusions above are that P4 has lost its claim, P1 and P3 are successful primarily only in respect of the Trespass Issue in relation to CPS7, and that the costs on the evidence on valuation has been totally wasted.

127.Bearing in mind the above, I make the costs order nisi that:

(a)  Ps shall bear the costs incurred on the valuation evidence;

(b)  P1, P2 and P3 shall have against D only 50% of the balance of the costs of the action;

(c)  The above has in my view adequately reflected, in so far as D’s costs position is concerned, the fact that P4 has lost his claim in respect of CPS8. I otherwise (unless invited by parties to do so) make no further order in that regard;

(d)  The costs are to be taxed if not agreed;

(e)  I am not satisfied that this is an appropriate case to grant a certificate for more than one counsel.

128.Any party who seeks variation of the above may file written submissions within 21 days from the date hereof, submissions in response within 14 days of receipt, and in reply within 7 days.  The application will be dealt with on the papers.

Mr Patrick Chong and Mr Martin Ho, instructed by Michael Pang & Co, for the 1^st to 4^th Plaintiffs

Mr Kenneth C L Chan, Ms Eunice H Y Yong and Ms Joyce Lai, instructed by Chung & Kwan, for the Defendant

Attachment

Approved G/F Plan