Secretary for Justice v. Wong Lai Yin and Another
Read the full judgment text of HCA 2169/2017 on BabelCite. This High Court CFI judgment was delivered on 22 January 2021.
1. This is an appeal brought by the 1 st defendant against the decision of Master Gary CC Lam dated 4 June 2020 dismissing his summons. By that summons, the 1 st defendant sought an order that paras 6 and 7 of the statement of claim be struck out and/or expunged and that items 8 and 9 of the plaintiff’s list of documents be struck out and/or expunged from the evidence at trial.
Cited by 2 cases · Cites 3 cases
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HCA 2169/2017 [2021] HKCFI 162 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2169 OF 2017 _________________
_________________ Before: Deputy High Court Judge Winnie Tsui in Chambers Date of Hearing: 7 January 2021 Date of Decision: 22 January 2021 _______________ DECISION _______________ INTRODUCTION 1.This is an appeal brought by the 1st defendant against the decision of Master Gary CC Lam dated 4 June 2020 dismissing his summons. By that summons, the 1st defendant sought an order that paras 6 and 7 of the statement of claim be struck out and/or expunged and that items 8 and 9 of the plaintiff’s list of documents be struck out and/or expunged from the evidence at trial. 2.The issue in this appeal is whether two letters exchanged between the plaintiff and the 1st defendant before the commencement of this action constitute without prejudice communication. If so, the plaintiff should not be allowed to refer to their content in the statement of claim and disclose the letters by way of general discovery. That is what the plaintiff did and the 1st defendant says that the relevant paragraphs in the pleading and the two items in her list of documents should therefore be struck out and/or expunged. 3.It is common ground that the issue can be further narrowed down to whether there was a dispute between the parties over the subject-matter of the present action when the letters were sent under the without prejudice rule. 4.The first letter was dated 18 November 2015 and sent by the 1st defendant’s solicitors to the District Land Office, Tsuen Wan Kwan Chung Lands Department (“the DLO”). The second letter was the reply letter sent by the DLO to the 1st defendant’s solicitors dated 21 December 2015. I shall refer to them below as “the First Letter” and “the Second Letter” and together “the Letters”. 5.An appeal from a master to a judge under Order 58, rule 1(1) of the Rules of the High Court is by way of re-hearing. I should treat the summons as though it came before me for the first time: Hong Kong Civil Procedure 2021 at 58/1/2. THE CLAIM AND THE DEFENCE 6.The present action concerns the right over a strip of unleased government land (“the Government Land”) measuring about 21 sq m in size, and adjoining and running alongside the eastern boundary of a piece of land located at Section A of Lot No 716 in Demarcation District 453 in Lo Wai, Tsuen Wan, New Territories (“the Lot”). 7.The plaintiff claims that a structure built on the eastern portion of the Lot straddles its eastern boundary and occupies the Government Land. The occupation is without licence or tenancy and is unlawful. The plaintiff claims against the 1st defendant, who is one of the co-owners of the Lot, and the 2nd defendant who comprise any other occupiers of the Government Land, for unlawful occupation and trespass. 8.The 1st defendant raises a claim of adverse possession in defence. In gist, he says that his family has been using and occupying the Government Land since the late 1940’s to the exclusion of the government. It has been used as an annex or extended portion of the family house on the Lot known as House No 117. 9.The 1st defendant pleads to the following facts and say that they are background facts relevant to the appeal. 10.The 1st defendant is the registered owner of 1/3 share of the Lot. His cousin, Wong Siu Hung, owns another 1/3 share. Three other individuals, referred to in the course of submissions as “the Wong Lai Kwong group”, own the remaining 1/3 share. Wong Lai Kwong is also a cousin of the 1st defendant. 11.The Lot is divided into three parts physically. The 1st defendant and his family occupy House No 117, which is built on the eastern portion of the Lot. Wong Siu Hung occupies House No 116A, which is located on the northern portion of the Lot. There used to be a House No 116, which was occupied by the Wong Lai Kwong group. That house was demolished in around 2002 and the land is currently vacant. 12.Since the late 1940’s, the 1st defendant’s family have started occupying the Government Land. Such occupation has changed in form over the years, initially with part of it being used as an annex of House No 117 for cooking, storage, and breeding pigs and poultry. Eventually, as from about 2000, there has stood a two-storey concrete structure built over the Government Land as an annex or extended portion of House No 117. 13.It is worth noting at this juncture that according to the 1st defendant’s own pleaded case, it has been he and his family who have been occupying the Government Land. He specifically pleads that the other co-owners of the Lot have never occupied it at any time. 14.Since around 2002, there have been disputes over the use of the Lot among the co-owners. The disputes relate to, among other things, construction works which the Wong Lai Kwong group carried out (or tried to carry out) on the Lot. I should note here that these disputes concern the co-owners only and do not affect the plaintiff’s claim over the Government Land. While the DLO had been informed and given updates of the disputes by the co-owners from time to time, it remains that these disputes are distinct from the dispute in the present litigation. The co-owners’ disputes are however presently relevant as they form part of the factual backdrop which the 1st defendant says one should take into account in order to gain a proper understanding of the meaning of the Letters. FACTUAL BACKGROUND 15.In determining whether the Letters qualify as without prejudice communication and, more specifically, whether there existed a dispute as to whether the 1st defendant’s occupation of the Government Land was unlawful at the time of the Letters, one does not look solely at the Letters, but also consider all the surrounding circumstances prior to, at the time of, and subsequent to the sending of the Letters insofar as they shed light on the issues. 16.The material question here is what a reasonable person in the position of the DLO being the recipient of the First Letter would have understood the 1st defendant, acting through his solicitors, to be disputing the government’s claim to the Government Land at that time. All the surrounding circumstances, as known to the DLO, would be taken into account when answering that question: Pearson Education Ltd v Prentice Hall India Pte Ltd [2006] FSR 8 at para 22; Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd [2016] 4 WLR 59 at para 23; Poben Consultants Ltd v Clearwater Bay Golf & Country Club [2019] 1 HKLRD 1110 at para 30. Evidence of subsequent events is also admissible: Poben at para 31. 17.I therefore proceed to set out these surrounding factual circumstances. These facts are either common ground or not in serious dispute between the parties. From late 2009 to just before the First Letter was sent in November 2015 18.Since around late 2009, the DLO had been made aware of the dispute over the use of the Lot and the construction works there among the co-owners. 19.In September 2014, in the midst of such dispute, Wong Lai Kwong wrote to the DLO complaining that two other co-owners were illegally occupying the Government Land. This prompted the DLO to investigate. The DLO found that the Government Land and another piece of unleased government land sitting to the north of the Lot were unlawfully taken up by extended portions of structures erected on the Lot. (The present action is not concerned with the latter government land.) 20.By letters dated 7 November 2014, the DLO requested the co-owners of the Lot, including the 1st defendant, to rectify the irregularities by setting back the occupied areas from the government lands or the DLO would contemplate taking appropriate land control action according to the Land (Miscellaneous Provisions) Ordinance, Cap 28, including clearing or demolition action and prosecution action. 21.Mr CY Li, SC appearing with Mr Matthew Cheung for the 1st defendant, places reliance on the above letter issued to the 1st defendant, which he refers to as “the 1st DLO Letter”. I shall adopt the same terminology. Mr Li highlights here that as early as November 2014, the DLO had threatened prosecution action over the allegedly illegal occupation of the Government Land. 22.Meanwhile, there was ongoing correspondence among the co-owners in relation to both the construction works on the Lot and the occupation of the Government Land. Some of the correspondence was copied to the DLO. 23.The next letter on which the 1st defendant relies is the one sent by the DLO to the 1st defendant dated 16 October 2015 (“the 2nd DLO Letter”). Enclosed with the letter was a notice of the same date. The notice was issued pursuant to section 6(1) of the Land (Miscellaneous Provisions) Ordinance and demanded that the unlawful occupation of the Government Land to cease before 16 January 2016. (The occupation of the government land to the north of the Lot was not covered by the notice and does not feature in this action from here onwards.) Again, Mr Li highlights here that the DLO explicitly stated that the occupation was unlawful (“停止不合法佔用該土地”) and referred to prosecution action without further notice in the event of non-compliance. 24.The 1st defendant did not comply with the demand. What he did instead was to ask his solicitors to send the First Letter to the DLO about one month later. The Letters 25.The First Letter was expressly marked without prejudice. It stated at the top in Chinese “不損害訴訟權益”. It comprised four paragraphs. It is necessary to set them out in full below. In his submissions, Mr Li puts forward a detailed paragraph-by-paragraph analysis, to which I shall come back shortly.
26.About one month later, the DLO sent the Second Letter to the 1st defendant in reply. Unlike the First Letter, it was not marked without prejudice. It was a short letter. It referred to the section 6(1) notice previously sent with the 2nd DLO Letter demanding the cessation of the unlawful occupation of the Government Land. The DLO reminded the 1st defendant that land control action would be taken in the event of non-compliance. The DLO also stated that it would not accept the 1st defendant’s request for a short-term tenancy. Events subsequent to the Letters 27.The 1st defendant did not comply with the notice by the imposed deadline. In July 2016, the 1st defendant was criminally prosecuted for failing to cease the unlawful occupation. He was however acquitted in the following year on the ground that he successfully raised a reasonable excuse of adverse possession. 28.The plaintiff then commenced the present action in September 2017, claiming possession of the Government Land. 29.It is against the above factual circumstances that the court needs to determine whether there was a dispute over the government’s right in the Government Land at the time when the Letters were sent, as perceived by a reasonable person observing the events as they unfolded. LEGAL PRINCIPLES ON WITHOUT PREJUDICE PRIVILEGE 30.Communications which are made for the purpose of a genuine attempt to compromise a dispute between the parties are generally not admitted into evidence. This is known as the without prejudice privilege. 31.For a party to claim the privilege, he must show that the communication in question was made in a bona fide attempt to settle a dispute between the parties and with the intention that, if negotiations failed, it could not be disclosed without the consent of the parties. 32.One of the constituent elements of the privilege is the existence of a dispute in respect of which legal proceedings had commenced or were contemplated and the communication was made in a genuine attempt to further negotiations to settle that dispute: Re Jinro (HK) International Ltd [2002] 4 HKC 90 at para 13. 33.The without prejudice rule is a rule of evidence. The protection from disclosure of without prejudice negotiations rests in part upon public policy and in part upon convention, ie an express or implied agreement that the negotiations shall be so protected. The underlying public policy is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of negotiations may be used to their prejudice in the course of the proceedings. They should be encouraged fully and frankly to put their cards on the table: Cutts v Head [1984] Ch 290 at 306B-F; Bradford v Bingley plc v Rashid [2006] 1 WLR 2066 at paras 24, 81. Under the Civil Justice Reform, the importance of facilitating the settlement of disputes is given a statutory underpinning in the form of Order 1A, rule 1(e) of the Rules of the High Court. 34.Where a pleading contains without prejudice communications, that part of the pleading is liable to be struck out: Yu Man Fung Alice v Chiau Sing Chi Stephen [2019] HKCFI 1549 at para 32. 35.When determining whether a communication qualifies as a without prejudice one and whether there exists a dispute in the first place which is capable of attracting the privilege, the court adopts an objective approach. The court’s task is to find out the intention of the author as would be understood by a reasonable recipient by taking into account the factual matrix and other matters that are properly and normally admissible in connection with the construction of a written document. Evidence of the actual intention of the author is not relevant: Poben at para 31. 36.I have set out the relevant question to ask in the present case in para 16 above. Express use of the words “without prejudice” 37.Where words such as “without prejudice” are expressly used, such use is a matter which should be taken into account in the overall factual enquiry for discovering the objective intention of the parties. But the significance to be attached to these words must vary depending on the specific circumstances of each case. 38.It is said that the use of the words, or the lack of them, is “hugely important” in the court’s determination of the issue: Phipson on Evidence (19th ed) at para 24-19. It has also been said that the express marking is a “highly material factor” in determining the status of the documents, but is not conclusive. It is a “strong indication” that there is a genuine dispute and a genuine attempt to settle the dispute: Avonwick Holdings Ltd v Webinvest Ltd [2014] EWHC 3322 (Ch) at paras 22, 26. (The decision was affirmed on appeal: [2014] EWCA Civ 1436.) 39.In Bradford & Bingley, Lord Mance examined the effect of the express use of the words in paras 84 to 87. If the words are used where there is an offer to compromise an existing dispute, the express use of the phrase puts the matter beyond doubt. The words are also capable of throwing some light on the answer to the objective question whether such a situation existed. But the use of the words is by no means conclusive. Neither a dispute nor a concession or offer to compromise can be conjured out of mere words(para 84). 40.This is to be contrasted with Lord Brown’s remark at para 63 that generally speaking, communications expressly marked to be without prejudice will attract the privilege even without the public policy justification of encouraging parties to negotiate and settle their disputes out of court. Lord Brown’s approach would appear to be the high water mark in the case law as to the weight to be attached to the without prejudice marking. 41.There are ready examples in the authorities in which it was held that the communication was inappropriately marked “without prejudice” as they were marked on documents which were clearly not negotiating documents: for a recent example, see Poben at para 36. Where the court concludes that the phrase was used unthinkingly or superfluously, it falls simply to be ignored or is treated as a mistake: Bradford & Bingley at para 86 and Avonwick at para 37. 42.The case law may suggest that there is a difference in approach when it comes to evaluating the effect of an express “without prejudice” marking. In my view, the correct general approach remains to be that such marking is a factor that should be taken into account in the factual enquiry but ultimately the weight and significance it should carry would depend on the specific facts of each case. 43.For these reasons, insofar as Mr Simon KC Lam, counsel for the plaintiff, suggests that the express use of the words is useful only in cases of doubt, I would reject that submission. Not all disputes would attract the without prejudice privilege 44.It must be borne in mind that not every dispute between the parties would attract the without prejudice privilege. If in the course of the factual enquiry to ascertain the parties’ intention, the court finds that there is no dispute as to liability but only a dispute as to how to satisfy the admitted liability, that dispute may not trigger the without prejudice rule. The underlying public policy of the rule is to encourage parties to compromise a dispute without resort to litigation. Where liability is in fact admitted, that policy is not engaged. 45.Included in the counsel’s lists of authorities are a number of cases on point: see, eg, Re Jinro, Bradford & Bingley and Avonwick. While the question of whether liability is admitted or accepted in each case is fact-specific, these authorities are relevant and helpful in that they seek to illustrate what type of dispute would be a relevant dispute for without prejudice purposes and explain why some types of disputes do not attract the operation of the privilege. 46.Bradford & Bingley was concerned with two open letters. While the letters were written in an attempt to negotiate, the material question was what exactly was being negotiated and that would make a difference as to whether the writer was entitled to claim the without prejudice privilege. 47.Lord Hope said, at para 33:-
48.Lord Mance remarked, at para 81:
49.Lord Walker, who agreed with Lord Brown, said at para 39 that in that case there was no dispute as to liability to be compromised, “the only element of negotiation being directed to obtaining time for payment (any reduction in the amount to be paid … would have been a matter of pure indulgence on the part of the lender)”. 50.In ascertaining the objective intention of the parties, it is therefore important for the court to recognise that where there was an attempt to negotiate, that may only be half the story. The court must proceed to ascertain what exactly was being negotiated. The mere fact of negotiation does not by itself mean that there was a relevant dispute for without prejudice purposes. DISCUSSION 51.When determining the question whether there was a dispute between the parties over the government’s right in the Government Land when the Letters were sent, Mr Li emphasises that the court must not merely look at the Letters in isolation, it should also take into account the surrounding factual circumstances which existed both before and after the Letters. I agree. 52.The sequence of events can conveniently be broken down into three periods for discussion purposes. The first period 53.First, from the time when the DLO found out about the 1st defendant’s occupation of the Government Land in about November 2014 after receiving the complaint from Wong Lai Kwong and up to just before the 1st defendant’s solicitors sent out the First Letter. 54.By the 1st and 2nd DLO Letters, the DLO was clearly asserting the government’s right over the Government Land. There was an express allegation that the 1st defendant’s occupation was unlawful. It issued a formal statutory notice to the 1st defendant demanding the cessation of the occupation. A deadline was imposed. The DLO threatened prosecution action in the event of non-compliance. It can be said that the DLO was in fact quite rigorously pursuing the recovery of the Government Land. 55.However, the mere assertion of one’s right without more does not amount to a dispute. It takes two to form a dispute. One must look at what the 1st defendant did or say (and, equally importantly, did not do or say) in the face of the DLO’s demand. The relevant questions here are – did the 1st defendant do or say anything to dispute the government’s alleged right? Or did he conduct himself in such a way as to evince an intention to so dispute? 56.In my view, during this period, the 1st defendant’s stance is simply not known from an objective standpoint. He made no reply to the DLO. He did nothing in apparent response to the demand. It was mere inaction on his part. Realistically speaking, a reasonable person observing the events would not be able to tell whether the 1st defendant was disputing the DLO’s claim or not. 57.In his written submissions, Mr Li says that the 1st defendant “refused” to vacate the Government Land upon receipt of the 1st DLO Letter. He also submits that the fact that the 1st defendant “refused” to comply with the section 6(1) notice was a clear denial of the government’s alleged right. In his oral submissions, Mr Li says that by continuing to occupy the Government Land after receiving the 1st and 2nd DLO Letters, the 1st defendant had evinced a clear intention to dispute the claim and such action speaks louder than words. 58.I do not agree that that would be the impression formed by a reasonable observer. Mr Li is no doubt correct in saying that during this period, the 1st defendant “continued to occupy” the Government Land. That must be technically correct, as he had done nothing to remove the concrete structure from the land. At this point, it is worth reminding ourselves of the actual situation on the ground. The occupation of the Government Land takes the form of an annex to House No 117. The annex is part of the family home. It does not appear to be some kind of movable objects that could be easily and quickly removed or dismantled. In the circumstances, I consider that a reasonable person would simply observe that notwithstanding the receipt of the 1st and 2nd DLO Letters, the 1st defendant did nothing and it was unclear whether he was disputing or intended to dispute the government’s right at this stage. The second period 59.The second period is when the Letters were sent in November and December 2015. 60.The first things to note about the First Letter are that it was written by the 1st defendant’s solicitors and it was expressly marked without prejudice. 61.As discussed above, the express marking should be taken into account as part of the overall factual enquiry. I am also prepared to assume that the marking and the involvement of lawyers would at first sight prompt a reasonable person observing the events to consider the possibility that the content of the First Letter would be about negotiation and that the 1st defendant might have intended that the letter should not be disclosed in any future litigation. That would be my starting point. 62.The first paragraph is plain and uncontroversial. It simply stated the fact of the 1st defendant’s co-ownership of the Lot. 63.The second paragraph makes it clear that the 1st defendant’s solicitors were replying to the 1st and 2nd DLO Letters. It went on to state as a fact that the 1st defendant’s family had been occupying the Government Land for many years. And the reference to the dispute (“上述地段的業權爭議”) at the end of the paragraph should be a reference to the dispute among the co-owners. It is notable that the 1st defendant, by his solicitors, was unequivocally admitting that his family had been in occupation after he was being served with a formal statutory notice to cease occupation. 64.In the third paragraph, it is clear that the dispute mentioned there was referable to the dispute among the co-owners regarding the Lot. What is less clear is how the resolution of that dispute would have an impact on the prosecution action contemplated by the DLO, which was about the alleged unlawful occupation of the Government Land. 65.What seems to me to be most notable about the First Letter was the request made in the fourth paragraph. The 1st defendant asked for a tenancy of the Government Land at nominal rent and he did so with a view to lessening any anxiety or worries brought to the parties by litigation. 66.Lastly, what is also of note about the First Letter was the absence of any express denial of the government’s alleged right over the Government Land and the omission to assert his possessory right which he now says has arisen by way of adverse possession. 67.In the circumstances, I am of the view that the 1st defendant was not disputing the government’s right, as can be judged by the content of the First Letter by a reasonable observer. I take this view for the following reasons. 68.By issuing a formal demand to the 1st defendant to vacate the Government Land, the DLO was unequivocally asserting the government’s right over the land. When faced with such demand, the 1st defendant made no express denial about such right. What he did instead was to seek a tenancy of the land. The grant of a tenancy would be wholly inconsistent with any possessory right which the 1st defendant might have in the land. Given that the request was made by a firm of solicitors on his behalf, the 1st defendant must be taken to have appreciated this point. He must therefore be taken to mean that he had no dispute as to the government’s right over the Government Land. However, he would prefer to stay on the land for some more time. In order to avert any potential prosecution action in the meantime, he asked for a tenancy so as to protect his position. 69.It is true that the 1st defendant’s solicitors did not expressly admit in the First Letter the government’s entitlement to the Government Land. However, what his solicitors wrote and, equally importantly, did not write show that he had no intention to dispute that entitlement. All he was asking for was indulgence from the DLO so that he could stay on the land which was not his for a bit longer without the risk and worries of litigation. In my view, that would be what a reasonable person having knowledge of all the surrounding circumstances would conclude. If the letter was an attempt to negotiate, the negotiation only went to how the 1st defendant could avoid prosecution or enforcement action in a situation when he was not disputing the government’s right to recover the land. There was therefore no relevant dispute at the time of the First Letter for without prejudice purposes, applying the approach adopted in Re Jinro, Bradford & Bingley and Avonwick. 70.The First Letter was expressly marked without prejudice. In the circumstances, it must be the case that the solicitors were using the mark either unthinkingly or unjustifiably, given that there was no relevant dispute as disclosed by the content of the letter, as in, eg, Avonwick. 71.In arriving at the above conclusion, I have considered the contrary submissions made by Mr Li. He puts forward different interpretations of the First Letter and submits that a reasonable reader would understand the 1st defendant to be disputing the government’s right over the land. 72.Mr Li places much reliance on the confirmation in the second paragraph that the 1st defendant’s family had been in occupation of the Government Land for many years. His submission is that this confirmation was a factual confirmation and the 1st defendant did not in any way mean that the occupation was unlawful. On the contrary, by highlighting that the occupation had lasted for many years, it was an allusion to the 1st defendant’s claim of adverse possession as occupation for a long period of time is a prerequisite for such claim. 73.Mr Li also stresses that the First Letter was drafted by solicitors. There was a conspicuous omission of any reference to the 1st defendant’s occupation as being unlawful even though that was what the DLO had all along been asserting prior to the First Letter. The omission, Mr Li submits, must have signified to an objective reader that the 1st defendant was in fact not in agreement with the DLO’s claim that the occupation was unlawful. 74.Further, given the DLO’s prior knowledge of the dispute among the co-owners and that the 1st DLO Letter was also sent to Wong Siu Hung, the purpose of the First Letter was to make clear who was in occupation of the Government Land. Hence the confirmation in the second paragraph. 75.Lastly, Mr Li sets much store by the reference to alleviating the anxiety and worries of all parties brought by the litigation (“以減低各方訴訟之困擾”) in the fourth paragraph. The litigation, he submits, was a reference to the dispute in relation to the occupation of the Government Land, as opposed to the dispute between the co-owners. By making an “offer” for a short term tenancy, the 1st defendant was making a concession as such “offer” was aimed to lessen the anxiety and worries of all parties, including the government. 76.I find that the construction put on the First Letter by Mr Li to be strained and unrealistic. If the reference to the long period of occupation by the 1st defendant’s family was an allusion to a claim for adverse possession, that allusion was an oblique and opaque one. One must ask rhetorically – why did the solicitors have to allude, instead of simply saying it out loud? Mr Li sought to explain at the hearing that the 1st defendant might be trying to be diplomatic when dealing with the DLO and might not wish to appear to be confrontational. 77.The actual intention of the 1st defendant is of course irrelevant. In any event, I do not think that having read the First Letter, it would come to the mind of a reasonable reader that the 1st defendant was contemplating an adverse possession claim, thus disputing the government’s right. That was simply a far-fetched construction. 78.Mr Li characterises the 1st defendant’s request for a tenancy as an “offer”. I do not see how that can be right. The premise for such a request must be that the DLO had the right to grant a tenancy. The request was made because the DLO had the right to grant one but was not obliged to do so. By requesting the DLO to make a grant, the 1st defendant was in effect asking for a favour or indulgence. He was not offering anything. Even if the request for a tenancy can loosely be described as an attempt to negotiate, the court must scrutinise the attempt to see what exactly was being negotiated. The 1st defendant was not giving up any right of his own. He was just asking for a concession, not giving one. As such, the fact of there being an attempt to negotiate does not point to the existence of any relevant dispute for without prejudice purposes. The third period 79.The third period can be dealt with quickly. It covers the events which took place subsequent to the Letters. 80.As I understand it, Mr Li relies on the fact that notwithstanding the First Letter, the DLO was pressing on and in fact proceeded with the prosecution of the 1st defendant. The 1st defendant denied the charge. Furthermore, the plaintiff commenced the present action to recover the Government Land. Judging from these events, Mr Li submits that it must be the case that there had been a dispute over the Government Land at the time when the Letters were sent. 81.In the present case, I consider that the factual circumstances leading up to the sending of the Letters and the content of the Letters are the most important consideration and carry the most weight when determining the issue of dispute. While subsequent events are admissible, I am of the view that they do not shed much light on the issue. In any event, as a matter of analysis, the fact that prosecution was instituted, and civil action commenced, against the 1st defendant subsequently is by itself equivocal on the question whether the 1st defendant was disputing the government’s right previously. So long as he remained on the land, the government would have to take action. Summary 82.Overall speaking, after the DLO discovered the unlawful occupation (as it alleges) of the Government Land, it sent two rounds of letters to the 1st defendant in November 2014 and October 2015. There was no action or response from the 1st defendant up until when the First Letter was sent in November 2015. During this time, it was unknown whether the 1st defendant was disputing or intending to dispute the claim. Mere assertion of rights on the part of one party without more should not be equated with a dispute at a stage when the other party’s stance is not known. The situation however became clear when the First Letter was sent. While there was no express admission of the government’s right in the letter, the 1st defendant requested a tenancy which was wholly inconsistent with any denial of that right. The request was rejected. Prosecution and civil action against the 1st defendant then followed. 83.In the circumstances, in my view, a reasonable observer would conclude that at the time of the Letters, no dispute existed over the government’s right over the Government Land. The purpose of the First Letter was to request the government to grant an indulgence to the 1st defendant so that he could stay on the land for longer than he was entitled to without the prospect of any prosecution or civil action. 84.One of the prerequisites for triggering the without prejudice rule not being satisfied, the rule does not apply. In the absence of a dispute in the first place, the underlying public policy of encouraging parties to speak freely and frankly to settle the dispute is simply not engaged. In the present action, the plaintiff is free to rely on the Letters to pursue her case, where appropriate, whether in pleadings or in discovery. The 1st defendant’s application to strike out must fail. 85.In light of this conclusion, it is not necessary for me to deal with the second limb of Mr Lam’s submissions. For the record, his submission is that the First Letter constituted a statutory acknowledgment of the government’s title in the Government Land under section 23(1) of the Limitation Ordinance, Cap 347. On that basis, applying what Lord Hoffmann said in Bradford & Bingley (at para 16 to 18), the without prejudice rule does not apply (cf Ofulue v Bossert [2009] 1 AC 900 at paras 100 to 102). Hence the Letters should not be excluded from evidence in this action. CONCLUSION 86.For the above reasons, I dismiss the 1st defendant’s appeal. 87.I make the following costs order nisi. The plaintiff do have costs of the appeal to be summarily assessed if not agreed. The plaintiff has already submitted a statements of costs. The 1st defendant should within 14 days from the date of the handing down of this decision lodge and serve a list of objections, if any. The plaintiff’s costs will be summarily assessed on paper after the deadline.
Mr Simon KC Lam, instructed by the Department of Justice, for the plaintiff Mr CY Li, SC and Mr Matthew Cheung, instructed by Christine FL Ip & Young, for the 1st defendant | |||||||||||||||||
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