Chi Yum Buddhist Hall Association Ltd v. Yu Lik Wai William and Another

DCCJ 642/2019

[2022] HKDC 282

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 642 OF 2019

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JUDGMENT

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INTRODUCTION

1.These proceedings are concerned with a piece of land in Demarcation District No 226 more particularly delineated and coloured on Plan No SKM9152a annexed to Government Land Licence S12116 (“Licence”) issued by the Lands Department which is also known as “No 14 Lung Wo Tsuen, Tseng Lan Shue, Sai Kung, New Territories, Hong Kong” (“Land”).  In around 1963, a Chinese Buddhist Hall in the name of “慈蔭精舍” (“Buddhist Hall”) was built on the Land.  The Land and the Buddhist Hall are collectively referred to as “Property”.

2.The plaintiff is a Hong Kong company.  Madam Lau Pik Kwan Echo (“Lau”) and her husband Mr Tsang Yuk Piu (“Tsang”) are and were at the material time the directors of the plaintiff.  The plaintiff has since 1 November 2017 been the licensee of the Land pursuant to the Licence.  Lau and Tsang are respectively the 2^nd and 3^rd defendants by Counterclaim.

3.The 1^st defendant (“Yu”) and the 2^nd defendant (“Kong”) are and were at all material times respectively the sole director and only shareholder of the 4^th defendant (“Shun Yu”), a Cayman company.  Yu, Kong and Shun Yu are collectively referred to as “Named Defendants”.

4.Although a number of relief, including monetary ones, are sought in its Amended Statement of Claim,[1] the plaintiff only pursued an order for possession of the Property and an injunction restraining the defendants from entering, remaining or in other way trespassing the Property.  The plaintiff’s claim for possession of the Property is disputed by the Named Defendants, as it is their case, inter alia, that Shun Yu and Kong (and their agents including Yu) have a contractual right to occupy the Property pursuant to an agreement made on or about 1 November 2010 between Shun Yu and Kong on the one hand and the plaintiff, Tsang and Lau on the other.  The Named Defendants counterclaim against the plaintiff, Lau and Tsang for, inter alia, an injunction restraining the plaintiff, Lau and Tsang from preventing, hindering of interfering with the occupation of the Property.

5.The plaintiff, Lau and Tsang were represented by Mr Dickson Chan and Ms Malanie Chan both of counsel.  The Named Defendants were not represented and did not appear at the trial.

6.Before I deal with the substantive issues, I should first deal with two housekeeping matters.  The first is in relation to my decision that the trial should proceed in the absence of the Named Defendants.  The other is in relation to an application by the plaintiff for leave to amend its Statement of Claim which was made and granted at the trial.

ABSENCE OF THE NAMED DEFENDANTS AND ITS CONSEQUENCE

7.The pre-trial review of the present case was heard on 12 July 2021 and the trial was fixed to commence on 13 September 2021.

8.The Named Defendants were clearly aware of the pre-trial review and the trial.  Between May and September 2021, a number of letters were sent by the Named Defendants to the court seeking an adjournment of these proceedings.  A brief chronology is as follows.

9.On 12 May 2021,[2] Yu and Kong each sent a letter to the Registry seeking an adjournment of the pre-trial review and the trial on the basis that they were stranded in Malaysia, purportedly by reason of the measures which the Malaysian government had put in place in response to COVID-19, one of which allegedly was to prevent any person from leaving and entering Malaysia.  Kong’s letter was expressly stated to be sent also on behalf of Shun Yu, as, despite no leave having been obtained, Kong was purportedly representing Shun Yu.[3]

10.By their letter dated 9 June 2021, the plaintiff’s solicitors (“DYC”) objected to the Named Defendants’ application for an adjournment.  DYC’s letter pointed out, inter alia, that the measures imposed by the Malaysian government did not prevent travelers from leaving Malaysia, and in any event, even if Yu and Kong were stranded in Malaysia, an application for the pre-trial review and the trial to be heard by video conferencing facilities (“VCF”) could be made and for the Named Defendants to justify.

11.On 22 June 2021, DDJ Tara Liao responded to application of the Named Defendants in the following terms:-

“PTR and trial are milestone dates which shall not be disturbed save in exceptional circumstances. No application to adjourn such will be entertained unless and until there is a proper application by way of summons together with supporting affidavit evidence.”

12.On 29 June 2021, Kong and Yu sent a joint letter to the clerk of DDJ Tara Liao.  In that letter, they explained that as there was a lockdown in place, they were unable to travel to any attorney’s office to prepare an affirmation in support of their inability to travel to Hong Kong in time for the pre-trial review.  It was further pointed out that as vaccination was not widely available in Malaysia, even if they were able to travel to Hong Kong, they would have to be held an isolation and be quarantined for 21 days.

13.On 2 July 2021, Kong and Yu wrote again to the clerk of DDJ Tara Liao and attached the Emergency Movement Control Order which was in place in Malaysia.  I note that the said order did not have the effect contended for by Kong and Yu, namely that it would prevent them from travelling to an attorney’s office to prepare an affirmation in support.

14.On 7 July 2021, DYC responded to Kong and Yu’s letters of 29 June and 2 July 2021.  It was pointed out, inter alia, that no application was made for VCF and that the plaintiff would apply to provisionally strike out the Named Defendants’ counterclaim pursuant to RDC Order 25, rule 1C(2) at the pre-trial review.

15.At the pre-trial review on 12 July 2021, DDJ Rebecca Li ordered, inter alia, that the Named Defendants’ counterclaim be provisionally struck out. The Named Defendants’ former solicitors, Messrs Bough & Company, on the instructions of the Named Defendants, made an inquiry with DYC on 27 July 2021 of the outcome of the pre-trial review.

16.On 6 September 2021, Kong wrote to the Registry (endorsed by Yu) seeking an adjournment of the trial, on the basis that they were still stranded in Malaysia and Kong’s inquiry “last week” ascertained that the quarantine hotels in Hong Kong were fully booked and the earliest date she was able to reserve any available room was 26 October 2021.

17.At the trial, Mr Chan resisted the application to adjourn the trial and referred me to Ng Nim Chung, deceased & Anor v Ng Wing Man Terry [2021] HKCFI 2423 §§13-20. 

18.As stated in Ng Nim Chung, whether an adjournment should be granted is a matter to be decided on the facts of each case.  However, one of the important considerations is whether or not a defendant applying for an adjournment is dilatory or has demonstrated no genuine intention to defend. The court will also take into consideration the cogency and the promptness of the defendant’s explanation, but recognizing that the pandemic was no longer new and that alternatives were available to enable a trial to take place.  For example, as noted at Ng Nim Chung §19, there was in place a mechanism whereby application might be made to the Department of Justice with a view to special mandatory quarantine requirement upon arrival at Hong Kong.

19.In the present case, like Ng Nim Chung, notwithstanding the provisional striking out of their counterclaim at the pre-trial review on 12 July 2021, the Named Defendants did not take any step to seek to restore it.  At Ng Nim Chung §14, DHCJ Leung regarded such fact to be indicative of defendant’s lack of any genuine intention to defend the trial.  I hold the same view as regards the present case.

20.Further, the Named Defendants did not address or adequately address the plaintiff’s challenge that the measures imposed by the Malaysian government did not have the effect of preventing Kong and Yu from returning to Hong Kong.  Even if it did, there was no or no proper explanation by the Named Defendants as to why it was impracticable for them to attend the trial by VCF or as to why no application for the same was considered or made, despite it having been raised by DYC even before the pre-trial review.

21.In addition, like Ng Nim Chung, if quarantine was an impediment, there was no material to show that the Named Defendants had sought to explore an application for special mandatory quarantine requirement upon arrival at Hong Kong (§18 above) or that Kong and Yu were for any reason not eligible.

22.For the above reasons, I did not grant an adjournment on the first day of the trial and decided to proceed in the absence of the Named Defendants.

23.As stated at Jotz, Klaus-Berhard Markus v Hamaway, Trarek MahMoud & Anor, HCA 1150 of 2013, 30 June 2017 §4, where I have decided to proceed in the absence of the Named Defendants, the proper approach to adopt is to require the plaintiff to prove its case as pleaded, having due regard where appropriate to the pleaded case by way of defence of the Named Defendants.

24.As regards the Named Defendants’ counterclaim, in the absence of Yu and Kong coming forward to give evidence to support the counterclaim and any application for restoration of the counterclaim, I am of the view that the counterclaim should stand dismissed. 

AMENDMENT APPLICATION

25.During the trial, I granted leave to the plaintiff to amend the Statement of Claim.  The amendment essentially consisted of amending the references to Shun Yu already pleaded in the Statement of Claim to make it clear that Shun Yu was the 4^th Defendant.

26.The present proceedings were commenced by the plaintiff against Kong, Yu and the 3^rd defendant (ie the unknown occupiers).  The parties to the Original Action was therefore the plaintiff, Kong, Yu and the 3^rd defendant.  By Counterclaim, only Kong and Yu originally counterclaimed against Lau, Tsang and the plaintiff.

27.On 13 July 2020, by consent, Master B Mak granted leave for Shun Yu to be added as the 4^th defendant in the Original Action and the 3^rd plaintiff by Counterclaim.  Leave was granted to the Named Defendants to amend the Defence and Counterclaim and to the plaintiff, Lau and Tsang to amend the Reply and Defence to Counterclaim.  The exclusion of Shun Yu as a party was precipitated by the fact that it had been struck off by the Cayman Registrar at the time of the commencement of the present action.  Shun Yu was subsequently reinstated on Kong’s application.

28.The parties in their joint application did not seek an order to amend the Statement of Claim, despite their agreement to add Shun Yu as the 4^th defendant in the original action.  However, despite that oversight, it appears clear that, since the reinstatement of Shun Yu, the parties have always proceeded on the basis that the plaintiff’s claim are also directed at Shun Yu, it being the corporate vehicle of Kong and Yu.

29.As submitted by Mr Chan, the general principle on amendment before the limitation period has expired is that all such amendments ought to be made for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings.

30.In the present case, there is no issue of time bar, as the plaintiff only obtained the Licence on 1 November 2017 in respect of the Land. I do not see how any prejudice can be caused to the Named Defendants by the clarifications that the references to Shun Yu pleaded in the Statement of Claim (originally only as part of the factual background) are also directed at it after its reinstatement from being struck off from the Cayman Registrar of Companies.

31.I also accept Mr Chan’s submission that, where, as here, the parties have always proceeded on the basis that the relief sought the is a dispute between the parties including Shun Yu and the Named Defendants have not come forward to actively defend their case, this is a suitable case where dispensation of service of the Amended Statement of Claim should also be granted.

32.For the above reasons, I allowed the plaintiff’s application to amend the Statement of Claim at the trial with no order as to costs.

THE PARTIES’ RESPECTIVE PLEADED CASE

33.The plaintiff’s pleaded case is relatively straightforward.  In its capacity as Licensee of the Land since 1 November 2017, it seeks an order for possession of the Property and an injunction restraining the Named Defendants from entering, remaining, or in other way trespassing the Property.

34.The pleaded defence is as follows.

35.First, it is said that an agreement was made in 2010 partly in writing and partly orally (“Alleged Agreement”).  In so far as the Alleged Agreement was made in writing, it was contained in a written agreement dated 1 November 2010 made between Shun Yu and the plaintiff (“Written Agreement”).  The oral part was made in conversations between Kong, Lau and Tsang in 2010.  Under the Alleged Agreement and its implied terms, Shun Yu and Kong had the sole right to occupy the Property and also the obligation to fund its operation including the maintenance and upkeep of the Property and the plaintiff would permit Shun Yu, Kong and/or their agents to occupy the Property during the pendency of the Licence.

36.Secondly, Shun Yu relies on proprietary estoppel.  It is said that in reliance on and pursuant to the Alleged Agreement, Shun Yu had occupied the Property and operated the Buddhist Hall since 2010.  The plaintiff through Lau and Tsang was well aware of Shun Yu’s performance of its obligations under the Alleged Agreement and encouraged Shun Yu to incur substantial expenditure in running and refurbishing the Buddhist Hall over the years.  Shun Yu is entitled, by virtue of proprietary estoppel, to occupy the Property through its agents, employees or licensees during the pendency of the Licence.

37.Thirdly, in the alternative, the plaintiff had acquiesced in Shun Yu expending substantial sums on the operation and the refurbishment of the Buddhist Hall when in occupation of the Property since 2010.

THE PLAINTIFF’S EVIDENCE

38.The plaintiff called Tsang and Lau.  Although Tsang was called first, it is fair to say that Lau was the main witness, and Tsang’s evidence was more corroborative in nature.  The scope of the issues at the trial was narrowed by reason of (1) the plaintiff not pursuing a number of issues (ie mistake and misrepresentation to vitiate the Written Agreement) and relief and (2) the dismissal of the Named Defendants’ counterclaim.  In this section, I will only set out the evidence germane to the issues requiring my determination, namely the plaintiff’s claim for possession of the Property and the related injunctive relief.

(a) Lau’s evidence

39.In 1963, by Government Land Licence No S3636 (“Original Licence”), the Land was licenced to four individuals, namely Kwan Yiu Shing (“Aunt Kwan”), Ng Sau Fong, Cheng Yuk Chi and Fung Hui Yue (collectively “Founders”).  The Founders were all Buddhist followers and the Buddhist Hall was built on the Land following the granting of the Original Licence.

40.Lau is the grandniece of Madam Liu Loh (“Grand Aunt”). Grand Aunt was the only disciple (入室弟子) of Aunt Kwan.

41.On 16 August 1964, the plaintiff was incorporated.  Aunt Kwan was one of the first directors of the plaintiff.  In July or August 1968, the plaintiff registered the Buddhist Hall as a Chinese Temple as required under section 5 of the Chinese Temple Ordinance Cap 153.

42.Lau was born in Guangzhou in 1971 and came to Hong Kong when she was 13 years old.  She lived with Grand Aunt and Aunt Kwan and followed them to attend rituals and events in the Buddhist Hall.  She married Tsang in 2000.

43.In 1996, the Founders raised concern over the future management of the Buddhist Hall due to their advanced age.  They therefore engaged a company named Buddha Light Association of HK Limited (香港佛光協會) (“Buddha Light”) in August 1996 to manage the Buddhist Hall and to take care of the aging elderly members who resided there.  Buddha Light delegated the duties to its employee, Wong Sik Hung (“Wong”). 

44.However, in June 2001, the Social Welfare Department did not approve Buddha Light’s provision of elderly home services, resulting in the plaintiff terminating the engagement of Buddha Light.  At the time, there were still around 4 to 5 elderly members residing at the Buddhist Hall.  Aunt Kwan accepted Wong’s proposal that he could continue to live at the Buddhist Hall on the condition that he continued to take care of the elderly members and the Property.

45.Aunt Kwan passed away in 2003 and Grand Aunt became the successor to all of Aunt Kwan’s properties.  At that time, Grant Aunt was 77 years old. In late 2003, at the request of Grand Aunt, Lau and Tsang became directors of the plaintiff.  Grand Aunt passed away on 7 October 2016, and since then, Lau and Tsang have been the only persons running the plaintiff. 

46.In late 2008, the last elderly member residing at the Buddhist Hall passed away.  Wong asked Grand Aunt that he be allowed to continue living at the Buddhist Hall rent free and in return he would take care of the Property. Grand Aunt was sympathetic towards Wong’s circumstances and acceded to Wong’s proposal.  At the time, the Buddhist Hall was rather run down without any worshippers.  Lau and Tsang therefore only made very occasional visits to the Property after 2008, as Lau was busy taking care of her children born in 2002 and 2006 and Tsang was a pre-occupied with his job as a civil servant.

47.In around late June 2010, in one of their visits to the Property and to their surprise, Lau and Tsang discovered that building works were being carried out in the Buddhist Hall, including the construction of columbarium shelves.  The erection of the columbarium shelves were not authorized by them and was in breach of the Special Conditions of the Original Licence.  Special Condition 4 provided that “No grave or columbarium shall be erected or made within the Licenced Area, nor shall any human remains or animal remains whether in earthenware jars, cinerary urns or otherwise be interred therein or deposited thereon.”

48.Lau and Tsang confronted Wong.  Wong admitted that he had entered into an agreement with Shun Yu to allow the latter to construct columbarium shelves on the Land with a view to sell and/or lease for profits.  Wong further admitted that he had allowed Yu, Kong and Shun Yu to occupy the Property and/or operate the columbarium business, allegedly on the persuasion of Yu and Kong (“Wong’s Arrangement”).

49.Lau and Tsang were extremely upset by Wong’s Arrangement and Tsang told Wong to pack and leave immediately, which he did.  Lau and Tsang have not seen or heard from Wong since then.

50.After the departure of Wong, in or around July 2010, Lau and Tsang met Kong and Yu a few times at the Property in the hope to persuade them to remove the columbarium shelves, reinstate the Buddhist Hall and leave the Property.

51.In those meetings, Kong and Yu complained that they had been misled by Wong that he had full authority to deal with the Property.  Due to Wong’s misrepresentations, Kong and Yu had procured Shun Yu to spend substantial sums on renovating the Buddhist Hall and building the columbarium shelves.  Kong and Yu asked if the plaintiff would run the columbarium business at the Buddhist Hall, which request was refused by Lau and Tsang as such activity was in contravention of the Special Conditions of the Original Licence. 

52.Kong and Yu then suggested that since the Property was being renovated, instead of wasting the money which had already been spent, the plaintiff should join force with them to turn the Property into a venue for worship and charity functions so that more people can benefit. 

53.In addition, Kong and Yu further said that they could assist the plaintiff with the process of transferring the Original Licence to the plaintiff as the Founders had all passed away.  They further reminded Kong and Tsang that since the plaintiff was not the holder of the Original Licence they had no right to occupy the Land and hence had no right to evict Shun Yu in any event.

54.Prior to signing the Written Agreement, Kong and Yu represented to Lau and Tsang, inter alia, as follows.

(1)     Through their connections, they could assist in the licence transfer application.

(2)     They would procure Shun Yu to remove the columbarium shelves. However, the renovation works of the Buddhist Hall, which had almost been completed, should remain and be used for entertaining elderly for charity purposes and for Buddhist followers to worship.

(3)     The day-to-day operations of the Property could be entrusted to a charitable organization “香港愛護長者協會” (“Organization”) and the profits arising therefrom should be paid to Shun Yu as reimbursement of the renovation money it has spent, with a small portion to be paid to the plaintiff to cover its running costs.

(4)     In order for Shun Yu to stay on and properly complete the rest of the renovation and demolition works, the plaintiff had to sign an agreement with it.

55.On 1 November 2010, the plaintiff entered into the Written Agreement with Shun Yu.  In the Written Agreement, Shun Yu and the plaintiff are referred respective to as “甲方” and “乙方”.

56.The relevant terms of the Written Agreement are as follows.

(1)     Recital B: “該地段的業權人屬香港政府，以牌照形式批予牌照持有人使用，並受 Licence No S3636的條款所規管（“該牌照”）。”

(2)     Recital D：“由於該牌照之原持有人已年紀老邁，加上過去多年該地段及該建築的日常管理與運作，已全權交由乙方負責，乙方現已擬向有關政府部門申請，將該牌照轉名至乙方名下。”

(3)     Clause 2：“甲方於簽署本協議後儘快完成正在該地段及該建築的修葺及維修工程，並協助乙方申請該牌照之轉名手續。”

(4)     Clause 3：“乙方承諾於簽署本協議後與香港愛護長者協會（或甲方指定之機構或公司）（“該管理機構”）簽訂一份管理協議書，聘請該管理機構由簽署管理協議書日開始直至該牌照終止日全權負責該地段及該建築之管理及運作。”

(5)     Clause 5：“甲、乙雙方同意該管理機構可全權營運及操作該地段及該建築，營運及操作該地段及該建築所得利益或盈利（如有的話），在扣除修葺及維修工程費用和該管理機構的所有開支後，餘款按下列比例分配於甲、乙雙方 [甲方：85% 乙方：15%]。”

57.In the Written Agreement, the removal of the columbarium shelves was simply termed as修葺及維修工程as Lau and Tsang were afraid that any express reference to columbarium shelves might create an impression that the plaintiff had authorized the building of such at the Land.

58.No agreement with the Organization was entered into pursuant to Clause 3 and Shun Yu did not nominate another entity for the purpose of entering into a management agreement.

59.In around August 2010 to early 2011, Kong and Lau had two to three meetings with the staff of the District Lands Office (“DLO”) in Sai Kung.  In those meetings, the staff repeatedly reminded them that the columbarium shelves had to be removed prior to any application of transfer. Instead of acting according to the request of the DLO, Kong kept seeking to persuade the DLO to approve the columbarium business and thereby prolonged and jeopardized the process.  The DLO even posed a warning notice outside the Property.

60.Between 2011 and 2017, Tsang and Lau made repeated request to Yu and Kong to remove the columbarium shelves and to leave the Property.  It had become increasingly difficult to evict Kong and Yu after guard dogs were kept and caretaker was engaged since mid-2011.

61.On 29 August 2016, Lau was informed by the DLO that the Original Licence was not transferable but that they would consider allowing direct relatives or religious organizations such as the plaintiff to obtain a new licence upon revoking the Original Licence.

62.On 8 September 2017, Lau met with Yu and Kong in a restaurant in Festival Walk.  Kong repeatedly emphasized that the columbarium business should not be conducted on the Land, but Yu and Kong brought up the Wong’s Arrangement again.  At one point, Yu and Kong suggested that they could purchase the plaintiff or Lau and Tsang could buy out Yu and Kong.  Lau rejected the offer and told Kong that she should keep her promise to demolish the columbarium shelves and leave the Property.

63.On 9 November 2017, Lau managed to get the DLO to issue the Licence upon her own efforts.  Hence, the plaintiff replaced the Founders as payee of the licence fees.  The Licence are subject to similar Special Conditions as the Original Licence.

64.In early 2018, Lau and Tsang consulted DYC on how to recover possession of the Property.

65.On 21 February 2018, Lau and Tsang went to the Property together with their friend Mr Tsang Chau Hoi.  They brought the Licence with them, with a hope to show to Yu and Kong and formally re-enter and retake possession of the Property.  Yu later arrived at the Buddhist Hall but altercations ensued, leading to a report being made to the police.

66.On 1 March 2018, DYC issued a letter to the DLO, hoping that the DLO would assist in evicting Yu and Kong.  However, the officer of the DLO considered that the complaint was a private issue and declined to take action. Nevertheless, the DLO conducted a site inspection.  On 23 March 2018, the DLO sent a letter to Lau notifying her of unauthorized building structures which were used to keep what appeared to be animal remains and stating that such amounted to a breach of the Licence which might lead to revocation of the Licence.

(b) Tsang’s evidence

67.Tsang’s evidence was consistent with that of Lau’s.  He gave further details of the altercations which happened on 21 February 2018 and his discovery that Yu and Kong continued to organize profit-making activities in the Buddhist Hall after the commencement of these proceedings.

68.There was no challenge against the evidence of Lau and Tsang and the material aspects of their evidence is consistent with the cotemporaneous documents.  I accept their evidence in their entirety.

ANALYSIS

69.On the pleadings, there is no dispute between the parties that since early 2011, Kong and Yu had engaged a caretaker to occupy the Property to the exclusion of the plaintiff: Amended Statement of Claim §20 and Amended Defence and Counterclaim §25. 

70.As submitted by Mr Chan, which I accept, the plaintiff, as a licensee under the License which is not in occupation, may claim possession against a trespasser if that is a necessary remedy to vindicate and give effect to such rights of occupation as by contract with its licensor it enjoys: Manchester Airport Plc v Dutton [2000] QB 133 at 150A-C.

71.The issues for my determination are therefore (1) whether the Named Defendants are permitted to occupy the Property by reason of the Alleged Agreement, (2) if the Named Defendants are not permitted to occupy the Property under the Alleged Agreement, is the plaintiff nevertheless estopped from denying the Named Defendants’ right to occupy the Property by reason of proprietary estoppel and (3) in the alternative, was there an acquiescence on the plaintiff’s part so as to justify the Named Defendants’ occupation of the Property.

(a) The Alleged Agreement

72.As stated earlier, the Alleged Agreement was said by the Named Defendants to have been made partly in writing (as evidenced by the Written Agreement) and partly orally.  Whilst the plaintiff accepts that it entered into the Written Agreement with Shun Yu, there is no evidence to support the oral part of the Alleged Agreement.

73.I therefore proceed on the basis that the only agreement between the Named Defendants and the plaintiff was the Written Agreement (which was an agreement only between Shun Yu and the plaintiff).  As canvassed above, in so far as relevant, the content of the pre-contractual discussions was consistent with express terms of the Written Agreement.

74.In my view, the express terms of the Written Agreement did not confer a contractual right to Shun Yu (or the other Named Defendants) to occupy the Property.  The Written Agreement clearly contemplated that the Property would be managed by the Organization or an entity nominated by Shun Yu, but only upon the execution of a management agreement between the Organization (or the nominated entity as the case may be) and the plaintiff.  As I have found above, no management agreement was ever entered into between the Organization and the plaintiff and no entity was nominated by Shun Yu in place of the Organization.

75.Given that the only operative agreement was the Written Agreement (and the relevant factual matrix was consistent with the terms of the Written Agreement), I fail to see how a term that can be implied to the effect that the plaintiff would cooperate with Shun Yu and Kong or their agents and the plaintiff would not interfere with, prevent or hinder the occupation of the Property by Shun Yu or Kong or their agents including Yu as long as they maintained the Property at their expense: Amended Defence and Counterclaim §23.  The alleged implied term is not consistent with the express terms of the Written Agreement, as any occupation was expressly contemplated to be by the Organization or a party nominated by Shun Yu but only after the execution of a management agreement with the plaintiff.  Indeed, the Named Defendant does not plead on what basis that the alleged term was to be implied, whether by reason of business efficacy, necessity or operation of law.  In any event, even if such a term was to be implied, one would have thought that reasonableness would dictate that the Named Defendants would not put the License at risk by conducting activities which were in breach of its Special Conditions.  As I have found above, even as late as on 23 March 2018, the DLO discovered activities which contravened the Special Conditions were being carried out.

76.For the above reasons, I find that the Written Agreement does not confer a contractual right to Shun Yu to occupy the Property.

(b) Proprietary estoppel

77.At Amended Defence and Counterclaim §§29A and 29B, the Named Respondents case of proprietary is pleaded as follows:-

(1)     in reliance on and pursuant to the Alleged Agreement, Shun Yu has occupied the Property and operated the Buddhist Hall since about 2010;

(2)     the plaintiff was aware of Shun Yu’s performance of its obligation under the Agreement and encouraged Shun Yu to incur substantial expenditure in running and refurbishing the Buddhist Hall over the years;

(3)     the detriment which is said to have been suffered by Shun Yu included a sum of HK$260,000 paid to Lau, the professional fees incurred for the purpose of the application for the licence including legal fees and surveyor’s fees in the sum of HK$10,000,000 and the sums expended on the maintenance, renovation and repairs of the Buddhist Hall.

78.I agree with Mr Chan’s submissions that the Named Defendants’ case on proprietary estoppel is fraught with difficulties.

79.First, the Named Defendants have failed to prove the Alleged Agreement, which is pleaded to be the premise upon which Shun has occupied the Property since about 2010.

80.Secondly, as set out at Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 §54, proprietary estoppel is inapplicable where, as here, the plaintiff is not an owner but merely a licensee and as such not in a position to confer a proprietary interest.

81.Thirdly, even were I to allow the Named Defendants to depart from its pleading to reply on promissory estoppel, there is no evidence to support a clear and unequivocal promise or assurance on the plaintiff’s part to Shun Yu that the plaintiff would not enforce or exercise its rights to occupation, which only accrued when the plaintiff obtained the Licence on 1 November 2017: Luo Xing Juan §55.

82.Fourthly, there is no evidence to support the monetary detriment pleaded to have been suffered by Shun Yu.  In particular, in so far as the construction works carried out at the Buddhist Hall are concerned, I have found that they were incurred for the most part before the execution of the Written Agreement.  It is therefore not that case that the plaintiff had encouraged Shun Yu to incur substantial expense in refurbishing the Buddhist Hall whether before or after the Written Agreement.  The plaintiff’s evidence, which I accept, is that the majority of the construction works were carried out on the strength of the Wong’s Arrangement in which the plaintiff, Lau and Tsang played no part.

83.For the above reasons, I do not accept the Named Defendants’ case on proprietary estoppel.

(c) Acquiescence

84.Amended Defence and Counterclaim §29A also pleads that, in the alternative to the plaintiff encouraging Shun Yu to incur substantial expenditure, the plaintiff had acquiesced in Shun Yu doing do.  Viewed thus, the plea of acquiescence is only an alternative factual plea within the rubric of the Named Defendants’ plea of proprietary estoppel.

85.As such, the observations set out at §§79 to 82 are applicable.

86.Further, as submitted by Mr Chan, the acquiescence-branch of proprietary estoppel applies where B adopts a particular course of conduct on a mistaken belief as to B’s current rights and A, knowing both B’s belief and of the existence of A’s own, inconsistent right, fails to assert that right against B.  If B would then suffer a detriment if A were free to enforce A’s right, the principle applies: Snell’s Equity, 34^th ed at §12-034.  The application can be seen in Ramsden v Dyson (1886) LR 1 HL 129 at 140-141 that:-

“[i]f a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own.”

87.There is no evidence that to show that the plaintiff knew that Shun Yu’s alleged expenditure was expended on the basis of Shun Yu’s mistaken belief.  As I have found above, the bulk of the construction at the Buddhist was carried out before the execution of the Written Agreement, and more likely than not, pursuant to the Wong’s Arrangement for which the plaintiff was not responsible.  Indeed, as the material time (§53 above), the contemporaneous view of the Named Defendants was that the plaintiff was not a licensee of the Land and had no right to evict Shun Yu.

88.I therefore find that the plea of acquiescence does not add to the Named Defendants’ defence.

CONCLUSION

89.For all the above reasons, I enter judgment against the Named Defendants and the 3^rd defendant in respect of Relief 4 and 5 pleaded in the Amended Statement of Claim, namely (1) possession of the Property and (2) an injunction restraining the Named Defendants and the 3^rd defendant from entering, remaining, or in other way trespassing the Property.  As stated earlier, I dismiss the counterclaim made by the Named Defendants.

90.I also make a costs order nisi that (1) the Named Defendants do pay the costs of the action to the plaintiff and (2) the Named Defendants do pay the costs of the Counterclaim to the plaintiff, Lau and Tsang to be taxed if not agreed with a certificate for one counsel.

91.I thank counsel for their assistance.

Mr Dickson Chan & Ms Manalie Chan, instructed by Danny K H Yu & Co, for the plaintiff (by Original Action) and for the 1^st to 3^rd defendants (by Counterclaim)

The 1^st to 4^th defendants (by Original Action) and the 1^st to 3^rd plaintiffs (by Counterclaim) were not represented and did not appear