華都大廈(高士威道)業主立案法團 v. 譚建華所經營裕華皮鞋
|
DCCJ 2918/2020 [2021] HKDC 1475 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 2918 OF 2020 --------------------------
------------------------- Coram: His Honour Judge H. Au-Yeung in Court Dates of Trial: 27 September 2021 and 4 November 2021 Date of Judgment: 25 November 2021 -------------------------- JUDGMENT -------------------------- BACKGROUND 1.These proceedings, which were transferred from the Lands Tribunal, were brought by the Incorporated Owners of Waldorf Mansion (“the Building”) against the defendant who has registered a business known as “裕華皮鞋” (“the Shoes Shop”) at a structure situated at the back lane right next to the Building (“the Structure”). 2.It is undisputed that the Structure currently comprises of 4 parts:
3.The aforesaid 4 parts formed a continuous structure which led from one end of the back lane (meeting Tung Lo Wan Road) to the back door of the Building, with Part 1 being the closest to Tung Lo Wan Road and Part 4 being right next to the back door of the Building. 4.The Structure was bolted to the external wall of the Building. 5.It is undisputed that the Structure was originally used by the defendant’s father (“Mr Tam Senior”) to operate the Shoes Shop since the 1970s. At that time, Mr Tam Senior was only using Part 1 and Part 2, as Part 3 and Part 4 were not in existence yet. 6.In the period between around October 1976 and 2006/2007, Mr Tam Senior had paid 補助管理費 (“Subsidiary Management Fees”) (or management fees) to the Mutual Aid Committee or the Management Committee (“Management Committee”), as the case may be, of the Building. 7.In around 2006/2007, the Management Committee decided not to collect Subsidiary Management Fees / management fees from Mr Tam Senior anymore. 8.On 13 October 2008, the Management Committee issued a letter to Mr Tam Senior and demanded him to remove the Structure. Further demand letters were issued in 2011 and 2017. However, Mr Tam Senior had ignored all those demands. 9.On 6 November 2014, the Building Authority issued a Superseding Order to the plaintiff, under which the plaintiff was ordered to demolish, among other things, the Structure (“the Superseding Order”). 10.Mr Tam Senior eventually passed away in June 2017. 11.As the plaintiff had failed to comply with the Superseding Order, the Buildings Department issued a summons on 27 July 2018 against the plaintiff, which pleaded guilty thereto and was fined $6,000 on 22 November 2018. 12.By this action, the plaintiff seeks an injunction against the defendant to remove the Structure and to reinstate the external wall. The plaintiff also asks for damages caused by the defendant’s breach of the Deed of Mutual Covenant of the Building (“the DMC”) in the sum of $6,000. 13.In his Defence and Counterclaim, the defendant contends, among other things, that the plaintiff and the owners of the Building no longer have any right of action to recover the area occupied by the Structure and the external wall possessed by the defendant by reason of adverse possession. He asks for a declaration that the plaintiff’s title has been extinguished. Alternatively, defendant states that he has an easement over the external wall of the Building and that the plaintiff has by its conduct acquiesced and/or estopped from denying the conduct of the defendant and his father. 14.At the beginning of the trial, it was agreed by the parties that the issues which have to be dealt with by the court are as follows[1]:
WHETHER THE LAND AND THE EXTERNAL WALL ARE COMMON PARTS OF THE BUILDING 15.It is undisputed that the land on which the Structure is situated is common part of the Building. 16.The only dispute under this issue concerns the external wall. 17.Mr Yeung for the plaintiff submitted that the starting point of consideration is the BMO. Mr Mak did not agree. In his written closing submissions, Mr Mak suggested that the BMO is not applicable to the DMC in the present case because:
18.He relied on the case of Donpower Trading Limited v Apexcom Limited [2010] 1 HKLRD 915, in which Cheung JA, when dealing with the newly enacted section 13A of the Conveyancing and Property Ordinance (Cap.219, Laws of Hong Kong), had the following to say:
19.The “prima facie rule of construction” quoted by Cheung JA is of course not absolute. It will not apply if “contrary intention appears”. 20.With greatest respect to Mr Mak, he had overlooked section 34C(1) of the BMO which has clearly expressed such “contrary intention”. This section is under Part VIA of the BMO which governs Deed of Mutual Covenant. It stipulates that:
21.“Material date” has been defined in section 34D of the BMO as “the commencement of section 29 of the Multi-storey Buildings (Owners Incorporation) (Amendment) Ordinance 1993 (27 of 1993)”, which was 8 May 1993. 22.Section 34I (which is also found in Part VIA of the BMO) provides that:
23.The term “common parts” has been defined in section 2 of the BMO. As a result, such a definition must be applicable to the DMC in the present case:
24.“External wall” is a part specified under Schedule 1 to the BMO. 25.When the above was pointed out to Mr Mak, he had fairly accepted that the definition of “common parts” in section 2 of the BMO should be applicable to the present case. 26.Hence, the question is whether the external wall (i.e. the part to which the Structure is affixed) has been “specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner”. 27.The defendant submitted that both the First Assignment dated 1 September 1964 (“the First Assignment”) and the DMC did make such specification or designation. I will therefore consider these documents in turn. The First Assignment 28.The First Assignment provides that:
29.Mr Mak drew this court’s attention to the Plan marked “No.1” annexed to the First Assignment, and submitted that as the external wall was also coloured pink, it is clear evidence that the external wall at the Ground Floor is owned privately. He relied on the case of Tam Sze Man v Shan Tsui Court (IO) [2011] 5 HKLRD 434 in which Fok JA (as his Lordship then was) stated in paragraph 33 of the Judgment that:
30.With respect, I do not accept Mr Mak’s argument. 31.First of all, it is important to bear in mind that the subject matter involved in the case of Tam Sze Man was a partition wall between two undisputedly privately-owned flats, and it was because of this Fok JA opined that “the colouring of the partition wall on the plans of both of the two flats provides an indication that the partition wall belongs at least to the owners of those two flats jointly rather than to all the owners of the building”. The position is different in the present case because we are concerned with the external wall of the Building. 32.Secondly, I do not agree that the pink colour appearing on the plan marked “No.1” of the First Assignment covers the external wall. 33.Thirdly, the descriptions by words in the First Assignment on what were conveyed thereunder did not mention about external wall at all. This indicates that the external wall was not included in the transaction. 34.I therefore conclude that the First Assignment did not specify or designate the external wall as being for the exclusive use, occupation or enjoyment of any owner. 35.It would be absurd if an opposite result is lightly arrived at. What Kwan VP and Chu JA said during the hearing in Kong Wai Hsien and Fung Lai Sheung v Tai Wai Glamour Garden (IO) [2019] 5 HKLRD 672 (which were referred to by Au JA in the Judgment) should be borne in mind:
The DMC 36.Mr Mak has quoted 2 clauses of the DMC and submitted that “clause 4 in particular provides that a private owner (Third Owner) may have exclusive use, occupation and enjoyment of external wall”[4]. 37.Clauses 3 and 4 of the DMC read:
38.These two clauses seem to be the only clauses in the DMC which expressly referred to the external wall. 39.It is clear that Clause 3 of the DMC has no application to the present case, because that clause only concerns a part of the external wall which is at the corner of Causeway Road and Tung Lo Wan Road. The external wall to which the Structure was affixed, on the other hand, is facing a back lane with one end of it meeting Tung Lo Wan Road. It is perhaps because of this that Mr Mak placed his emphasis on Clause 4 but not Clause 3 of the DMC. 40.However, I do not think Clause 4 would assist the defendant’s argument either. It is clear to me that the phrase “the exclusive use, occupation and enjoyment” was describing “the shop or flat”, but not the external wall. 41.Furthermore, in any event, the right granted by virtue of Clause 4 of the DMC was to display signboard on the external wall only. There is no other exclusive right to use, occupy and enjoy such part of the external wall. 42.The interpretation that the external wall remains a common part despite the granting of the aforementioned right is consistent with Clause 1 and the Schedule of the DMC. The said Clause 1 provides that:
43.The description of the Second Column of the Schedule of the DMC reads:
44.Against the name of the “Third Owner” in the First Column, a number of shops, flats and “the Roof” may be found in the Second Column. “External wall” was not included. In other words, “Third Owner” was only entitled to the exclusive right to use, occupy and enjoy certain shops, flats and the Roof, but not the external wall. Conclusion 45.It is therefore my finding that the external wall is a common part of the Building. ARE THE DEFENDANT AND HIS FATHER BOUND BY THE DMC 46.The 2nd issue agreed by the parties was: “If the land and the external wall occupied by the defendant are common parts under the BMO and the DMC, whether the plaintiff is entitled to the relief sought”. 47.Having read parties’ respective submissions, it seems to me the real question to be answered under this issue (and what the parties are disputing) is: whether the plaintiff can enforce covenants in the DMC against a trespasser who is not an owner of the Building. 48.Mr Yeung for the plaintiff submitted that covenants in the DMC are enforceable against occupiers. He relied on the case of The Incorporated Owners of Mountain View Mansion v Heart Cuisine & Others [2012] 4 HKLRD 628 in which section 34I of the BMO and section 41(3) of the Conveyancing and Property Ordinance (Cap.219, Laws of Hong Kong) (“CPO”) were considered. 49.I have already quoted section 34I of the BMO in the earlier part of this Judgment and I will not do that again here. Section 41(3) of the CPO provides that:
50.Pursuant to section 41(2) of the CPO, section 41(3) covers both positive and negative covenants. 51.In paragraph 20 of the Judgment in The Incorporated Owners of Mountain View Mansion, Cheung JA held that:
52.Mr Yeung also referred to the case of Incorporated Owners of No 27A Chatham Road, Kowloon v Mr Lee or Unlawful Occupier (Lee Kai Kong, Lo Hung Cheong) [2001-2003] HKCLRT 273, in which it was held by the Court of Appeal that:
53.On the other hand, Mr Mak relied heavily on the Court of Appeal case of Wong King Lim v Incorporated Owners of Peony House [2013] 4 HKC 295. He first of all quoted what Yuen JA held in paragraph 34 of the Judgment therein:
54.In the same Judgment, Lam JA (as his Lordship then was) also said as follows:
55.Mr Mak submitted, on the basis of Wong King Lim, that the plaintiff cannot enforce the DMC covenants against a trespasser who is not a party to the DMC. 56.With respect, I do not agree that Wong King Lim supports such a proposition. 57.In my view, as the highlighted portions of the Judgment in Wong King Lim quoted above show, the Incorporated Owners would only lose its right to enforce covenants in the DMC against a trespasser upon such a trespasser’s establishment of adverse possession. Before the end of the relevant period under the Limitation Ordinance, such right of enforcement should still remain, as there is still interest over the dispossessed land to be protected by the covenants in the DMC. 58.Therefore, whether the plaintiff is entitled to enforce the covenants in the DMC against the defendant depends on whether he will succeed in his claim for adverse possession. If the defendant has already extinguished the title of the owners of the Building, then the plaintiff would no longer be entitled to enforce those covenants, otherwise, the plaintiff should still be entitled to enforce such covenants. ADVERSE POSSESSION – PLEADING POINTS 59.Before I proceed to consider the defendant’s claim of adverse possession, I have to deal with 4 “pleading points” raised by Mr Yeung for the plaintiff. The plaintiff’s propositions are as follows:
Pleading of 20 years vs 12 years of adverse possession 60.In support of the proposition which he advocated, Mr Yeung referred this court to the case of Chan Ching Mui, by Poon Chi Ming, her next friend v City Breeze Limited [2018] HKDC 16. 61.In the Chan Ching Mui case, the plaintiff therein pleaded that she and her cohabitee had been in exclusive possession of the subject land, and had the intention to possess the same exclusively since about 1961. At the beginning of the trial, she applied for leave to amend her amended statement of claim so as to, among other things, add an alternative case that she had been in exclusive possession of the subject land for a continuous period of 20 years since 1 July 1971 or 1972, and add a further alternative case that she had been in exclusive possession of the subject land for a continuous period of 12 years since 1 July 1991. The amendment application was refused by the trial Judge, HH Judge MK Liu, on the ground that the proposed amendments would introduce entirely different factual scenarios, and that introducing these new matters at that stage would seriously prejudice the defendant, as the defendant was not expected to meet these alternative cases in the trial. Despite such refusal of leave, in the plaintiff’s final submission, it was submitted that even on the basis of the unamended pleadings, the plaintiff was entitled to argue the 2 alternative cases contained in the disallowed proposed amendments. The plaintiff’s counsel therein referred the court to 2 Court of Appeal decisions:
62.On the other hand, the defendant’s counsel in the Chan Ching Mui case relied on the case of On Yip Property Development Company Limited v Kwok Tai Kuen Alan (HCMP 3192/2013, unreported, 15 April 2014), in which the Court of Appeal affirmed the decision of the court below that the claimant for adverse possession should not be allowed to run an alternative case by relying on the 12-year limitation period as this had never been pleaded. 63.Having considered the above authorities, His Honour then concluded as follows at paragraph 25 of his Judgment:
64.The same approach was followed in 2 subsequent District Court cases, namely, Lee Sui Heung v Cheung Yiu Company Limited [2018] HKDC 1188 and Richlands Properties Limited v The Occupier(s) of Lot No 1347 in Demarcation District No 102, Yuen Long, New Territories, Hong Kong & Another [2021] HKDC 940. Mr Mak reminded this court that these two cases concerned with rural lands in the New Territories rather than multi-storey buildings and therefore the court should exercise caution when applying these authorities in the present case. With respect, I do not think the requirements on pleadings applicable to rural lands in the New Territories should be any different from those applicable to cases involving multi-storeys buildings. 65.I agree on the approach adopted in these cases. If a squatter’s primary case is that time has started to run before 1 July 1991, the limitation period of 20 years should be applicable pursuant to section 38A of the Limitation Ordinance (Cap.347, Laws of Hong Kong). In the event he has any alternative case that the time would only start to run after 1 July 1991 such that the applicable limitation period would become 12 years instead of 20 years, this has to be pleaded expressly, otherwise, the squatter should not be allowed to run such an alternative case as this would take the paper owner by surprise. 66.The desirability of such an approach is indeed supported by the way the parties framed the issues to be tried by this court. It may be recalled that one of the sub-issues agreed by the parties on adverse possession was “Whether the defendant and/or his father had continuous and exclusive possession of the land, the external wall and the Space for over 20 years since November 1973”. The limitation period of “12 years” was not mentioned at all. I agree with the plaintiff that it would be unfair if the defendant is allowed to rely on a case which is not pleaded. 67.Mr Yeung for the plaintiff herein also referred this court to the case of Yip Yan Cheung Gary also known as Yip Yan Cheung v Chow Tin Choi [2018] HKCA 70. In this case, the defendant squatter’s primary case was that he and his family had been in possession of the subject land since 1960s. The plaintiff paper owner pleaded in the Reply and Defence to Counterclaim that the subject land was leased to the defendant’s parents in about 1964 and the land was repossessed in 1981. The Court of Appeal held that the defendant should have responded to such a case by a subsequent pleading (with leave, if necessary) if the defendant had an alternative case that he and his family continued/resumed possession from 1981 or any time thereafter for 20 years (or 12 years if the adverse possession started after July 1991). 68.Mr Mak submitted that Mr Yeung’s proposition was contradicted by the Court of Appeal case of Grand Wayfair Investment Company Limited v Chan Yung Kan trading as Luk Yau Yau Organic Vegetable & Others (CACV 238/2013, unreported, 26 September 2014). He relied on what Lam VP (as his Lordship then was) said in paragraph 17 thereof:
69.In my view, the case of Grand Wayfair Investment Company Limited cannot assist the defendant herein, because it is unclear in the Court of Appeal’s Judgment whether the “12-year limitation period” was pleaded in his Defence and Counterclaim. Joint or successive adverse possession 70.The second “pleading point” that Mr Yeung took was that the only adverse possession case pleaded was that Mr Tam Senior, but not the defendant himself, who had entered possession adversely. Therefore, it was said that it is not open to the defendant to run any case based on any possession by himself, whether successively or jointly with Mr Tam Senior. 71.In support of his argument, Mr Yeung relied on the case of Chan Ting On v Multi-Skill Investments Limited (DCCJ 2786/2013, unreported, 20 June 2017), in which the plaintiff tried to run a case at the trial that he together with his family as a unit had been in continuous and exclusive possession of the subject land. The trial judge did not allow the plaintiff to do so as this was not the pleaded case. From paragraph 2 of the Judgment, it seems that what the plaintiff therein pleaded was that only he has been in continuous and exclusive possession of the disputed land since 1979/1980. In such circumstances, it is totally understandable why the learned Deputy Judge refused to let the plaintiff run his case as he attempted. 72.Mr Yeung has fairly drawn this court’s attention to the authority of Cheung Wing Wah v On Yip Property Development Company Limited [2021] HKCFI 156 in which the case of Chan Ting On was distinguished on the facts. In this case, the plaintiff pleaded that he and his family had been continuously and still were in exclusive possession of the subject land, that they had built, occupied and were still occupying a farmhouse and that they had been farming on the subject land. As a result the learned trial judge accepted that the plaintiff therein had pleaded a set of facts which could support a case based on joint possession. The learned judge also took the view that the defendant, having read the plaintiff’s pleadings as a whole, should not have been taken by surprise by the basis of joint possession, and that it is sufficient for the pleader to state the material facts; he need not state the legal result.[6] 73.In the present case, the defendant pleaded in the Amended Defence and Counterclaim, among other things, that:
74.In my view, the defendant’s case has been adequately and clearly pleaded in the Defence and Counterclaim, in that it was his father who initially possessed the Structure and ran the Shoes Shop thereat; the defendant joined in late 2013, and carried on with what his father had been doing after the demise of Mr Tam Senior. 75.Hence, I do not agree with Mr Yeung’s argument that the defendant’s case has not been adequately pleaded. Adverse possession against Incorporated Owners 76.The 3rd “pleading point” taken by Mr Yeung was that since the Incorporated Owners in the present case was only incorporated on 4 January 1999, no adverse possession could possibly be run against the Incorporated Owners before that date. Hence, it was suggested that the defendant’s claim which relied on adverse possession commencing before 1991 must fail. 77.I do not accept this submission. 78.Section 16 of the BMO provides that:
79.In Hang Yick Properties Management Limited v Incorporated Owners of Tuen Mun Kar Wah Building [2005] 2 HKLRD 499, Woo VP explained the effect of the said provision as follows:
80.It is clear that while the plaintiff was only incorporated in 1999, it does not mean that no adverse possession could be run against the owners as alleged. It should be borne in mind that the plaintiff is as a matter of fact only a representative of all the owners. While the “Incorporated Owners” was not in existence before 1999, the individual owners were. Hence, time could be run against the individual owners before the incorporation of the Incorporated Owners, but once it was incorporated, it should be the Incorporated Owners rather than the individual owners who should be sued for adverse possession of the common parts of the Building. 81.This brings me to the last “pleading point” raised by Mr Yeung. Adverse possession against co-owners 82.The last “pleading point” taken by Mr Yeung is that, in order to run an adverse possession claim over common parts in respect of any period prior to the incorporation of the Incorporated Owners, the defendant must extinguish the title of every co-owner of the Building. 83.In support of this argument, he relied on the case of The Incorporated Owners of Chungking Mansions v Shamdasani, Murli Pessumal [1991] 2 HKC 342, in which Deputy High Court Judge Jerome Chan (as his Lordship then was) considered the question of whether adverse possession had to be established against all the co-owners of a building for the period before the incorporation of the Incorporated Owners. It was held that:
84.So far so good. However, Mr Yeung then went on to argue that until the defendant has extinguished the title of every co-owner of the Building, time will start to run afresh every time someone becomes a co-owner of the Building, and that it would be for the defendant to adduce evidence that no one had become a co-owner of the Building during the 20-year period of adverse possession. He gave an example as follows.
85.While I have no doubt about the general principle explained by the learned Judge in The Incorporated Owners of Chungking Mansions, I do not accept Mr Yeung’s argument that time would start to run again upon each conveyance, as I take the view that that is not the effect of what the learned Judge held. In fact, as the learned Judge pointed out:
86.On the other hand, section 9(3) of the Limitation Ordinance provides that:
87.The effect of this provision is that once time has started to run, no conveyance of the land by the paper owner will stop time from running (see Adverse Possession by Stephen Jourdan QC and Oliver Radley-Gardner (2nd edition, 2011), at paragraph 15-06). In other words, contrary to what Mr Yeung contended, time will not run afresh whenever one of the co-owners of the Building sold his undivided shares in the Building to another. 88.Support on this view may be found in the case of Kan Kam Cho & Another v Kan Chiu Nam Raymond and Kan Kam Lok as the intended managers of Kan Ng Wo Li (or Lee) [2008] 11 HKCFAR 538. In this case, the Court of Final Appeal considered the question of whether the letting of land to a tenant stops the running of a limitation period which had started to run against the paper owner prior to such letting. Lord Scott of Foscote NPJ held that:
WHETHER THE EXTERNAL WALL CAN BE ADVERSELY POSSESSED IN LAW 89.The Structure was bolted to the external wall of the Building. The defendant therefore claims that his father and he had adversely possessed the external wall for more than 20 years. The question is: whether the external wall could be adversely possessed as such. 90.The answer is clearly “No”. 91.In Sunbroad Holdings Limited v All Occupiers (whose names are unknown) and Others (HCMP 1852/2008, unreported, 24 June 2011), the subject matter of the appeal concerned an external wall. The plaintiff therein was the registered owner of the ground floor of the building of which the said external wall formed part. The 3rd defendant had constructed certain structures at a part of the said external wall, and counterclaimed against the plaintiff that he had acquired all the possessory right, title and interests, including the right to exclusive physical occupation of the part of the external wall at which he had constructed the said structures. The plaintiff sought summary judgment against the 3rd defendant and applied at the same time to strike out the 3rd defendant’s counterclaim. The matter came before Mr Recorder Anderson Chow SC (as his Lordship then was) who stated in his Judgment as follows:
92.The 3rd defendant then appealed to the Court of Appeal. In his Judgment(Sunbroad Holdings Limited v All Occupiers (whose names are unknown) and Others [2012] 2 HKLRD 599), Tang VP (as he then was) stated:
93.As Mr Mak rightly accepted, the Court of Appeal’s Judgment in Sunbroad Holdings Limited is binding on this court. WHETHER THE 3-DIMENSIONAL SPACE CAN BE ADVERSELY POSSESSED IN LAW 94.In Mr Mak’s written opening submissions, he referred to the case of 鄧秀蓮 (Tang Sau Lin) v Youngfield Limited & Others [2019] HKCA 903 (in respect of which he highlighted the fact that the case of Sunbroad Holdings Limited was distinguished therein) and submitted that the 3-dimension space occupied by the Structure can be a subject matter of adverse possession. 95.As I pointed out to Mr Mak during his opening submissions, I did not understand why the law of adverse possession on “3-dimensional space” is relevant in the present case, because the Structure which we are concerned with herein is not a hanging structure as in 鄧秀蓮 (the subject matter therein was an over-hanging cabinet (立體吊櫃)) but a structure which touches the ground. In my view, in such circumstances, the fact that the Structure was allegedly affixed to the external wall would not make any difference. 96.After some exchanges between the Bench and the Bar table, it was agreed that this issue might be allowed to stay for the time being, pending the clarification from the witnesses on whether the whole Structure was touching the ground. 97.It is now clear from the evidence that the whole Structure was placed on the ground rather than a suspended structure as such. 98.It might be because of this that Mr Mak has now submitted in his written closing submissions that “the distinction between an overhanging structure and a structure touches the floor but not affixed to it is a distinction without a difference in relation to whether there was possession”[8]. 99.That being the case, without disrespect to counsel, I shall not go further on this issue, as it will not have any bearing on the result of the present case. THE DEFENDANT’S CLAIM OF ADVERSE POSSESSION The legal principles 100.While the legal principles on adverse possession are generally well-known, I would set them out for the sake of clarity. In the Court of Final Appeal case of Incorporated Owners of San Po Kong Mansion v Shine Empire Limited [2007] 10 HKCFAR 588, the principles explained in Powell v McFarlane [1979] 38 P&CR 452 were stated as follows:
101.It is undisputed that the person claiming adverse possession (the defendant herein) has the burden of proving both exclusive physical control and the requisite intention. Although the standard of proof is still the normal civil standard (i.e. on the balance of probabilities), commensurate with the serious consequences of finding that the holder of the paper title has been disposed the evidence of exclusive possession and intention must be compelling. It cannot be lightly assumed that the paper title holder has foregone his interest in land.[9] Whether there was continuous and exclusive possession of the land for over 20 years 102.As explained at the beginning of this Judgment, it is undisputed that the Structure currently comprises of 4 parts – Part 1, Part 2, Part 3 and Part 4. The defendant’s case is that Mr Tam Senior took over Part 1 and Part 2 in 1972, added part 3 in the 1980s and then added Part 4 in the late 1990s. Parts 1 and 2 103.According to the evidence of the defendant, his father (Mr Tam Senior) initially ran his leather shoes business in North Point in around 1970. However, as his shop there was going to be demolished, he had to look for another place to run his business. In around November 1972, Mr Tam Senior took up certain structures at the back lane of the Building to continue his business. Although the defendant was only around 9 years old at that time, he could still remember that he had accompanied Mr Tam Senior to go to the “new shop”. He said he saw that Mr Tam Senior had used a key to open the shop and see the condition inside. 104.This part of the defendant’s case is supported by a written agreement dated 11 November 1972 (“the Written Agreement”) which reads:
105.It was also written either on the reverse page of the document or on another paper:
106.A Business Registration Certificate issued on 24 January 1973 to “Yue Wah Shoes-Maker” has also been disclosed in the present action. The defendant said in court that this is the earliest Business Registration Certificate which he could find. While the address of the business was initially stated thereon to be “Hut Sch5A22, Pek King St., North Point, H.K.”, it was amended in red by handwritten words to “1, Tunglowan Rd., G/F., H.K.”. Although the address of the business was not stated in the said certificate to be “2 – 6 Causeway Road” (which is currently used as the address of the Building), I am satisfied that the certificate is referring to the location of the Structure because “1, Tunglowan Rd., G/F., H.K.” was the address used in the Written Agreement, and there is no dispute herein that the huts involved in the Written Agreement were located at where the Structure is. 107.Mr Chan Shu Sun, the only witness called by the plaintiff, only bought a flat in the Building in 1996, and he had no knowledge about the alleged condition of the Structure back in 1972. Therefore, he could not give any evidence to contradict the evidence adduced by the defendant. 108.In these circumstances, I accept that Mr Tam Senior had used Part 1 and Part 2 since around 1972 to run the Shoes Shop. 109.Mr Yeung had drawn this court’s attention to the fact that the glass cabinet currently put in the Structure was admittedly not there back in 1972. I am of the view that this is an irrelevant matter. The question to ask is whether Mr Tam Senior had been in continuous and exclusive possession of Part 1 and Part 2 of the Structure at the material time. The fact that he had replaced some old cabinets with new ones in the course of his occupation would not affect the court’s consideration of the said question. 110.As to whether there had been exclusive possession, I have referred to the defendant’s evidence above that the shop had to be opened by the use of a key. He had further told us in court that Mr Tam Senior had to remove 10 – 11 “doors” everyday so as to start doing business in the morning. I accept his evidence. The huts which were sold to Mr Tam Senior were previously used to run a store (士多) and naturally there must be stocks of goods kept there for sale. It is against common sense that when the store was closed, anyone could walk into the store freely. The same logic applies to the Shoes Shop run by the defendant’s father. 111.The fact that the Shoes Shop was not enclosed during daytime would not affect the above analysis. Mr Tam Senior must have been at the shop when it was opened for business. For this reason, Mr Yeung’s reliance on the photographs published in Apple Daily in 2011 to show that Mr Tam Senior’s shop was “more like an open unenclosed working space, accessible by anyone” is misconceived, as the photographs were apparently taken while Mr Tam Senior was there. 112.The defendant’s case that his father had continuously run the Shoes Shop since the time he took over the Structure was not challenged. 113.It is therefore my finding that Mr Tam Senior had continuous and exclusive possession of Part 1 and Part 2 since 1972. Part 3 114.The defendant’s pleaded case is that Part 3 of the Structure was added in the 1980s. However, in his evidence, he could not say when exactly between 1980 and 1989 it was so added. He could only say that:
115.He further stated that at that time, a polisher (打磨機) which had to be used for the purpose of the business would be stored inside Part 3 at night. It would be moved to Part 4 during day-time. No one could enter Part 3 freely. 116.Again, the above evidence of the defendant was not contradicted by any other evidence. I therefore accept the same. However, since the defendant could only say positively that Part 3 was already there in 1988, I would only find that Mr Tam Senior had continuously and exclusively possessed Part 3 of the Structure since 1988 but not earlier. Part 4 117.Part 4 is located at the end of the Structure. 118.According to the defendant’s evidence:
119.There is no reason why I should not accept the defendant’s evidence. However, since he could not remember when exactly did his father move the First Iron Box to Part 4 of the Structure other than saying that it was in the 1990s, I would assume that that was in 1999. 120.Since Part 4 was not enclosed at the time when the First Iron Box was moved under the canopy covering Part 4 of the Structure, I find that Mr Tam Senior only started possessing the area occupied by the First Iron Box (5 ft (length) x 2 ft (depth)) in 1999. He only exclusively possessed the entire Part 4 of the Structure from 2010 onwards when Part 4 was enclosed. 121.What this court cannot tell (as there was no evidence adduced on this matter) is where exactly the First Iron Box was placed within Part 4 which is occupying an area of 3 ft (depth) x 6.1 ft (length). However, it will be seen below that the court’s inability to make any finding on this matter does not have any impact on the ultimate outcome of this case. Animus possidendi Part 1, Part 2 and Part 3 of the Structure 122.When Mr Tam Senior took possession of Part 1 and Part 2 of the Structure in 1972, he was clearly doing it pursuant to the Written Agreement which he entered into with 黃少波 and 黃順. The Written Agreement has been set out in full in the earlier part of this Judgment. 123.The defendant stated in his evidence that he was told by his father that 黃少波 was a watchman of the Building at the material time, and that since the 大業主 of the Building (which is normally understood to mean someone who owns a large part of a building/development) had sympathy on 黃少波 who had a low salary at the time, 黃少波 and his younger brother 黃順 were allowed to set up a structure at the back lane of the Building so as to run their business “波記士多”. 124.According to the Written Agreement, the two wooden huts set up by the Wong brothers were sold to Mr Tam Senior. The Written Agreement further provided that Mr Tam Senior had to pay monthly rent in the sum of $120 for 3 years, and that the amount of monthly rental after the expiry of 3 years shall be further negotiated between the parties. It also appears that Mr Tam Senior had paid a deposit of $120. 125.When he gave his evidence, the defendant did not agree that the Written Agreement was a tenancy agreement. He said the payment of $120 was only management fee. I do not think any weight should be given to this part of the defendant’s evidence. He was only 9 years old when his father took possession of the wooden huts, and he accepted that his father did not discuss with him about this agreement including the question of whether he (his father) had paid rent during those 3 years. There is nothing which renders it appropriate for this court to find that the Written Agreement did not mean what it stated. 126.Mr Tam Senior knew that 黃少波 was permitted to use the back lane as he did by the 大業主. Taking into account what was agreed under the Written Agreement, I am of the view that it is clear that Mr Tam Senior did not have the intention to dispossess such owner(s) of the Building during the term of the Written Agreement. 127.There is no evidence on further negotiation between Mr Tam Senior and 黃少波/黃順 upon the expiry of the 3 years’ term in November 1975, even though according to the evidence of the defendant, 黃少波 only passed away in 1976. 128.However, what we do know, which is undisputed, is that Mr Tam Senior started to pay Subsidiary Management Fees to the Mutual Aid Committee in October 1976. When the Incorporated Owners was established in 1999, the payment was made to the Management Committee instead. Such payments were made all the way up to 2006/2007 when the plaintiff refused to receive any further management fee from Mr Tam Senior. 129.The defendant alleged that his father had told him that, when the Mutual Aid Committee was set up, his father was consulted by the said Committee on the collection of management fees, and that his payment would only be accepted by the said Committee if his father agreed to pay. The defendant was further told by his father that since the latter thought that it was reasonable to pay management fees, such payment was charged. 130.It is difficult to accept that the Mutual Aid Committee had really consulted Mr Tam Senior as such. But in any event, the undisputed fact is that Mr Tam did make such payment from 1976 to 2006/2007. In my view, no matter whether he had made such payment willingly or not, it would not affect the analysis on whether he had the requisite animus possidendi during the said period of time. 131.In The Incorporated Owners of Chungking Mansions v Shamdasani, Murli Pessumal [1991] 2 HKC 342, the learned Judge held that:
132.I agree with the view of the learned Judge. 133.The same conclusion can be reached even without the guidance given in The Incorporated Owners of Chungking Mansions. In the circumstances of the present case, in my view, the Mutual Aid Committee must be aware of Mr Tam Senior’s usage of the common area at the back lane of the Building back in 1976 when the said Committee was first established, and there must have been discussion between Mr Tam Senior and the Mutual Aid Committee at that time about the collection of the Subsidiary Management Fees. The fact that such fees were charged by the Mutual Aid Committee shows that the Mutual Aid Committee permitted Mr Tam Senior’s occupation of the said area. On the other hand, Mr Tam Senior’s agreement to pay such fees, in my view, shows that his possession was not adverse at all. 134.Mr Mak relied on the case of Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464 and argued that there is no rule of law that the elements of adverse possession “cannot be established for a person who mistakenly believes that he has good title”. 135.In my view, this authority does not assist him. Attention should be paid to the following statement made by Saville LJ in Hughes v Cork [1994] EGCS 25 which was quoted by Kwan JA (as she then was) in paragraph 12 of the Judgment in Cheung Kwong Yuen:
136.As mentioned above, it is the evidence of the defendant that Mr Tam Senior knew that the 大業主 had permitted 黃少波 to run his business at the wooden huts, and 黃少波 in turn allowed Mr Tam Senior to use the back lane. Subsidiary Management Fees were then paid. In these circumstances, the defendant cannot establish that his father had any intention to exclude the 大業主. 137.Mr Mak also submitted that there was no evidence on whether the Mutual Aid Committee had authority of all the owners of the Building to collect Subsidiary Management Fees from Mr Tam Senior. With respect, whether it had authority or not is neither here nor there. We are not concerned with whether Mr Tam Senior should have been liable to pay such fees, but the implication of his payments which were made pursuant to the request of the said committee. 138.The defendant further argued that the payment of Subsidiary Management Fees on the part of Mr Tam Senior was only for the purpose of obtaining the service of watchmen patrolling around the back lane and the use of the toilet inside the Building. I do not accept his evidence on this. 139.As the defendant accepted in court, the watchmen are still seen patrolling the back lane currently. The relationship between the payment of management fees and the patrolling duties of the watermen is therefore not established. 140.On the use of toilet, the defendant stated in paragraph 18 of his witness statement:
141.I do not think the defendant’s evidence in terms of the aforesaid paragraph alone is adequate in establishing that there was any link between the conversation on the use of toilet and the refusal on the part of the plaintiff to receive further management fees. 142.On the other hand, Mr Chan, who had been a member of the Management Committee since 2003, told the court that the plaintiff had refrained from collecting further management fees from Mr Tam Senior some years later because it was considered inappropriate to do so. I accept his evidence in this regard. 143.I therefore do not accept the defendant’s argument that the collection and payment of management fees (or Subsidiary Management Fees) had nothing to do with the animus possidendi on the part of Mr Tam Senior. 144.Pausing here, I note that there is a difference between the parties’ respective cases as to when the plaintiff stopped collecting management fees from Mr Tam Senior. The plaintiff alleged that it was in 2007, while the defendant stated that it was in March 2006. 145.In this regard, the following pieces of evidence are relevant:
146.While Mr Tam Senior had paid management fees / Subsidiary Management Fees for around 30 years, only 5 receipts in relation thereto had been exhibited to the defendant’s witness statement. Those receipts were dated 29 October 1976, 25 February 1977, 12 May 1997, 30 August 1999 and 26 February 2006 respectively. There was no explanation as to why only those receipts were so exhibited. These show that Mr Tam Senior had been paying management fees at least up to February 2006, but it does not mean per se that he did not pay further management fees afterwards. 147.While it was the defendant’s evidence that the plaintiff had stopped receiving management fees from his father since March 2006, this was contradicted by (i) Mr Chan’s evidence and (ii) the Lands Department’s Letter. Given the long lapse of time, I think the court should give more weight to documentary evidence. The Lands Department’s Letter referred to the management company’s letter dated 10 July 2006 which Mr Chan said he could not find among the plaintiff’s documents. From my reading of the Lands Department’s Letter, it appears that the management company had by virtue of its letter dated 10 July 2006 raised some issues on Mr Tam Senior’s occupation of the back lane of the Building, and indicated that it did not intend to collect further management fees from him (“現不欲再向此鞋舖收取費用”). This implied that when the letter dated 10 July 2006 was issued, the Management Committee was still collecting management fees from Mr. Tam Senior. 148.This is consistent with Mr Chan’s evidence that it was only in October 2006 that it was proposed in the Management Committee meeting that no further management fees should be collected from Mr Tam Senior. According to Mr Chan’s witness statement set out above, it was decided that no further management fees should be collected from Mr Tam Senior with immediate effect. 149.It is therefore my finding that Mr Tam Senior had paid management fees up to October 2006. 150.Hence, up to at least October 2006, there was no requisite animus possidendi on the part of Mr Tam Senior. 151.What about the period thereafter? 152.In my view, even though no management fee was demanded to be paid from November 2006 onwards, and no such payment was made, it does not necessarily mean that Mr Tam Senior had the requisite animus possidendi immediately. The defendant has to prove that his father’s possession was “adverse”, for example, by showing that even if the plaintiff had asked for such payment again, his father would have refused to pay; or alternatively, his father did not agree to leave despite being asked to do so. 153.According to Mr Chan, in 2007, as the plaintiff was preparing to undertake a major renovation project at the Building, they wanted Mr Tam Senior to leave. However, taking into account Mr Tam Senior’s old age and the expectation that he might be retiring soon, the Management Committee decided only to ask him to leave orally without taking further actions. 154.On the basis of the aforesaid evidence, it is this court’s finding that Mr Tam Senior had refused to leave despite the oral requests made by the plaintiff in 2007. 155.Therefore, I am satisfied that Mr Tam Senior had the requisite intention sometime from 2007 onwards. However, for reasons to be explained below, the above analysis is only applicable to Part 1, Part 2 and Part 3 of the Structure. Part 4 of the Structure 156.The above analysis is not applicable to Part 4 of the Structure in the sense that, given the circumstances of the case, I do not think the defendant can successfully prove that Mr Tam Senior had the requisite intention in relation to Part 4 of the Structure as from 2007. 157.To recap, Part 4 was first used by Mr Tam Senior in 1990s when he placed the First Iron Box there. The defendant accepted that, unlike Part 1, Part 2 and Part 3, the area of Part 4 was not enclosed at the time. Anyone could enter Part 4 freely. Theoretically, anyone could take the First Iron Box away, even though it was a very heavy box, and would require 4 persons to move it even if it was empty. The First Iron Box was subsequently replaced by the New Iron Box in around 2010. It was at that time that Part 4 was enclosed. 158.In Powell c McFarlane (1977) 38 P & CR 452, Slade J said that:
159.He then continued:
160.In my view, it is inadequate for Mr Tam Senior to “make his intentions sufficiently clear” by placing a box on an open space without enclosure. Even though Mr Tam Senior had at the material time enclosed Part 1, Part 2 and Part 3 of the Structure, and had demonstrated his intention to treat those parts of the back lane as his own from 2007 onwards, an objective informed observer would probably have inferred that Mr Tam Senior, by placing the box there as he did, was simply using the area of Part 4 for convenience but without any intention to appropriate the land. 161.The situation only changed in 2010 when Mr Tam Senior enclosed Part 4 of the Structure. 162.I therefore find that, as far as Part 4 of the Structure is concerned, Mr Tam Senior only had the requisite intention from 2010 onwards. Conclusion on the claim of adverse possession 163.To sum up my findings above:
Whether the defendant can rely on Mr Tam Senior’s act 164.In the light of my conclusion above, I will only deal briefly with this issue. 165.When I dealt with the plaintiff’s second “pleading point”, I had already expressed my view that the defendant had pleaded adequately his case that he had joined his father in the continuous and exclusive possession of the Structure since late 2013, and carried on with what Mr Tam Senior had been doing after his demise. 166.Having heard the evidence, I accept that the defendant had proved what he pleaded as referred to in the preceding paragraph. He remained in possession of the Structure after the death of Mr Tam Senior. The defendant could therefore rely on his father’s adverse possession and may apply for a declaration in his own right. 167.Mr Yeung argued that there is no objective evidence that Mr Tam Senior had allowed the defendant to enter into the possession of the Shoes Shop. That may be so. However, there is no reason for me to doubt the defendant’s evidence in this regard. Necessity of a grant of probate 168.For the above reason, there is no need for the defendant to obtain a grant of probate. ACQUIESCENCE AND ESTOPPEL 169.In Mr Mak’s written closing submissions, he stated that:
170.Mr Yeung submitted that the defendant has not pleaded the basis for any estoppel at all in his Defence and Counterclaim. No representation or detriment had ever been pleaded and particularised. I agree with this submission. I would not allow an improperly pleaded issue to be “slipped-in” in this way. 171.In any event, there is nothing in the evidence which supports any allegation that the expansion of the Structure or the payment of management fees and various other charges had anything to do with any promise given by the plaintiff or on the basis of any inaction on the part of the plaintiff or other owners. 172.The defence of estoppel must therefore fail. 173.On the question of acquiescence, in The Incorporated Owners of Champion Court v Pang Ping Fan Peter & Another [2008] 5 HKC 312 (the Court of Appeal’s Judgment starts at page 319), Yuen JA had the following to say:
174. The Incorporated Owners of Champion Court was followed in The Incorporated Owners of Triumph Court v Law Ping Patsy The [2020] 4 HKC 100, in which Yuen JA stated that:
175.In the present case, the Building Authority had, on 6 November 2014, issued the Superseding Order under section 24(1) of the Buildings Ordinance (Cap.123, Laws of Hong Kong), informing the plaintiff that there was “a structure erected on the side lane on G/F leading to Tung Lo Wan Road”. According to the plan annexed to the Superseding Order, the said structure occupied from one end of the back lane all the way up to a door. Comparing this plan to the photographs produced in the present case, I am satisfied that that that door was the back door of the Building. In other words, the “structure” mentioned in the Superseding Order is the entire Structure which is the subject matter of the present case. 176.It is stated in the Superseding Order that the “structure” covered by the said order had been built without first obtaining approval from the Building Authority. The plaintiff was therefore ordered to demolish the said structure. 177.There is therefore no doubt that the Structure is an illegal structure. 178.Pursuant to section 18(1)(b) of the BMO, the plaintiff is obliged to carry out such work as may be ordered in respect of the common parts of the Building by any public officer or public body in exercise of the powers conferred by any Ordinance. 179.In such circumstances, the defendant’s reliance on acquiescence must fail. Indeed, in his reply submissions, Mr Mak was unable to answer Mr Yeung’s argument at all. 180.Mr Mak has also argued that the plaintiff is not entitled to its claim since Mr Tam Senior is not a party herein. I do not understand why that is so. If anything, it only shows that the defendant is not entitled to raise a defence which is only available to his father (as to which I do not agree). THE PLAINTIFF’S CLAIM OF DAMAGES 181.There cannot be any dispute that:
182.The plaintiff now claims against the defendant for reimbursement of the fine of $6,000 as damages for the defendant’s breach of the DMC. Under Clause 9 thereof, it is stipulated that:
183.As discussed under the section “Are the defendant and his father bound by the DMC” above, Mr Tam Senior and the defendant are bound by the DMC because they have not extinguished the owners’ title. 184.Mr Mak argued that:
185.With greatest respect to Mr Mak, these arguments are totally unmeritorious. 186.I see nothing wrong even if it was the plaintiff who informed the Buildings Authority about the existence of the Structure which led to the issuance of the Superseding Order. After all, the plaintiff had a duty pursuant to section 18(1) of the BMO to do all things reasonably necessary for the enforcement of the obligations contained in the DMC. 187.This conduct on the part of the plaintiff would not be “tainted” even if it had any “ulterior motive” to evict Mr Tam Senior and the defendant at the material time. 188.Further, the fact that the Superseding Order and the Summons were not issued to the defendant or his father is totally irrelevant. 189.Neither is the point on “safety concern” relevant. Whether the Structure is safe or not, it cannot be denied that it is an illegal structure which has to be removed pursuant to the Superseding Order. 190.I therefore hold that the defendant is liable to reimburse the plaintiff for the sum of $6,000. ORDER 191.By reasons of the aforesaid, I make the following orders:
COSTS 192.I make a costs order nisi that the defendant shall bear the plaintiff’s costs of the action (including all costs reserved, if any), with certificate for counsel. 193.The above order nisi shall become absolute in the absence of application to vary (which shall be made by letter, if any) within 14 days hereof. Any application to vary the costs order nisi shall, with the consent of the parties[11], be dealt with on papers.
Mr Geoffrey Yeung, instructed by C W Chan & Co, for the plaintiff Mr Andrew Mak, instructed by Chung & Kwan, for the defendant [1] There were originally other proposed issues concerning the safety of the Structure and the defendant’s claim of easement. These are no longer pursued. [2] There was probably a typo in the list of issues prepared by the parties – the date should be November 1972 [3] Paragraph 59 of the defendant’s written closing submissions [4] Paragraph 132 of the defendant’s written closing submissions [5] Paragraph 70 of the plaintiff’s written closing submissions [6] Paragraphs 78 to 83 of the Judgment [7] Paragraph 70 of the plaintiff’s written closing submissions [8] Paragraph 134(3) of the defendant’s written closing submissions [9] Tsang Foo (also known as Fu) Keung and Key Kwong Development Limited v Chu Jim Mi Jimmy being sued as the personal representative of the estate of Yu Lai Ying, deceased and the personal representative of the estate of Chu Kwok Chung, deceased & Others [2017] 3 HKC 527, at paragraph 22(4) [10] Altogether 5 receipts had been produced in this action. Apart from the receipts dated 29 October 1976 and 25 February 1977 which described the payments as “Subsidiary Management Fees”, all the other more recent receipts (dated 12 May 1997, 30 August 1999 and 26 February 2006 respectively) described the payments as “management fees” [11] Parties have given their consent at the trial | ||||||||||||||||
Summaries and metadata are generated from the judgment. Report an error
Cases cited in this judgment
大埔道民安大廈業主立案法團 v. 擅自佔用九龍大埔道79, 79a, 81, 83, 83a, 85號民安大廈天台的人士 and Others
永樂大廈業主立案法團 v. 林穎欣經營珠珠找換店
The Incorporated Owners of Kwai Fong Terrace v. Chan Lai Mei t/a Lui Kee
Chiu Suet Ying v. The Incorporated Owners of Kiu Yu and Kiu Fat Mansions
The Incorporated Owners of Kam Luk Building v. Poon Mui Sang and Others
Fong Kai Sing v. Chan Chi Wai Alex and Others
Chan Ching Mui, By Poon Chi Ming, Her Next Friend v. City Breeze Ltd
The Incorporated Owners of Po Hang Building v. Sam Woo Marine Works Ltd
Yick Fung Holdings Ltd v. Sandwood Ltd
Wan Kin Shing v. The Incorporated Owners of City Centre Building and Others
Yeung Kam Heung v. Yu Yi Shek
Lee Yin Mui Catherine v. Lau Sau Kong John and Others
Yeung Mau Cheung and Another v. The Incorporated Owners of Ka Ming Court, Castle Peak Road
The Incorporated Owners of Kin Yuen Mansion v. Chan Tin Kwong and Others
Mung Chi Fai and Another v. Tat Fung Enterprises Co Ltd
Li Yuet Wan (in Both Her Personal Capacity and in Her Capacity As Personal Representative of the Estate of Leung Tze Man, Deceased) v. The Personal Representative of Wong Shiu Chui Formerly Known As Sun Wong Shiu Chui (Deceased)
The Incorporated Owners of Po Hang Building v. Sam Woo Marine Works Ltd
On Yip Property Development Co Ltd v. Kwok Tai Kuen Alan
The Incorporated Owners of Mountain View Mansion v. Heart Cuisine and Others
Wong Hon Wing (黃漢榮), Wong Wai Sun (黃維新) and Wong Man Hing (黃文興) As Managers of Wong Tung I or Yi Tong (Alias Tung Yi Tong) (黃同義堂) (別名 同義堂) 對person(S) Unknown in Occupation of the Area Known As or Referred As Sub-section 4 of Section a of Lot No. 2039 and The Remaining Portion of Section a of Lot No. 2039 in Both Demarcation District No. 120, Yuen Long, New Territories 及另一人
Other judgments that cite this case