Geoffrey Holdings Ltd v. Personal Representative(S) of Lam Shek (林石) Alias Lam Shek Tau (林石頭), Deceased
Read the full judgment text of DCCJ 5054/2017 on BabelCite. This District Court judgment was delivered on 17 June 2022.
2. The current site condition of the Occupied Areas
Cited by 1 case · Cites 10 cases
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DCCJ 5054 /2017 [2022] HKDC 551 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 5054 OF 2017 ---------------------------------------------- BETWEEN
AND BETWEEN
(By original Writ and Order to carry on made by Mr. Registrar Ho dated 7th February 2018) ---------------------------------------------- DCCJ 5053/2017 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 5053 OF 2017 ---------------------------------------------- BETWEEN
(Consolidated pursuant to the Order of Mr. Registrar Ho dated 7th February 2018) ---------------------------------------------- Before: Deputy District Judge Jonathan Wong in Court Dates of Hearing: 21, 23 and 25 February 2022 Date of Judgment: 17 June 2022 --------------------------- JUDGMENT --------------------------- 1.Introduction 1.1The plaintiff has since 3 April 1990 been the registered owner of (1) the Remaining Portion of Section C of Subsection 3 of Section C of Lot No 1212 and (2) the Remaining Portion of Subsection 1 of Section C of Subsection 3 of Section C of Lot No 1212 both in Demarcation District No 115, Yuen Long, New Territories (collectively “Land”). 1.2The Land is adjacent to Subsection 2 of Section C of Lot No 1212 in Demarcation District No 115 (“Deceased’s Land”) which is and was at all material times owned by Mr Lam Shek alias Lam Shek Tau (“Deceased”) and formed part of his estate following his demise. The Deceased passed away on 30 March 2017 at the age of 88. 1.3On 6 April 2017, the District Lands Office issued a letter to the plaintiff complaining of structures having been erected on the Land without its approval, which contravention constituted a breach of the conditions in the Government lease. 1.4On 3 October 2017, the plaintiff’s solicitors issued two letters, one addressed to the occupiers of the Land and the other to the Deceased, by which the addressees were demanded, inter alia, to remove and demolish the unauthorized structures and to deliver vacant possession of the Land on or before 9 October 2017. 1.5As the demands were not met, on 14 November 2017, the plaintiff commenced two sets of proceedings to recover possession of the occupied areas of the Land and damages. DCCJ 5053 of 2017 was commenced against the occupiers of what is defined in evidence as the Red Area of the Land. DCCJ 5054 of 2017 was instituted against the personal representatives of the Deceased in respect of what is defined in evidence as the Green Area of the Land. The Red Area and the Green Area are collectively referred to as the Occupied Areas. 1.6The two sets of proceedings were consolidated by an order dated 7 February 2018. By that order, Mr Lam Che Chung (“Lam”), the youngest son of the Deceased, was appointed to represent the estate of the Deceased. Prior to the consolidation, Lam became an additional defendant in DCCJ 5053 of 2017. In these consolidated proceedings, the estate of the Deceased is the 1st defendant, Lam the 2nd defendant and the occupiers of the Red Area the 3rd defendant. Only the 1st and 2nd defendants appeared to contest these proceedings (“Relevant Defendants”). 1.7The Joint List of Issues identifies, in gist, the following matters for determination:-
1.8At the trial, the plaintiff was represented by counsel Mr Derek JY Chan and the Relevant Defendants by Mr Martin Lau. 1.9Mr Lau in closing helpfully curtailed and crystallized the issues for determination. In essence, upon Mr Lau’s clarification:-
1.10In terms of witnesses, the plaintiff did not call any factual evidence but obtained leave to call expert evidence on three areas, namely land surveying, rental value and demolition costs. The experts engaged by the plaintiff for the three disciplines were respectively Mr Joseph Wong Yiu Cho (“Joseph Wong”), Mr Chan Yat Hei, (“YH Chan”) and Mr Wong Kin Piu (“KP Wong”). Conversely, the Relevant Defendants elected not to adduce expert evidence and called the 2nd defendant as their only factual witness. 1.11YH Chan was unable to attend the trial as his domestic helper tested positive for COVID-19 shortly before the commencement of the trial. Mr Lau was content to have the valuation expert’s evidence admitted into evidence without calling him and deal with the same in submissions. 1.12The evidence relevant to the issue of liability is that of the 2nd defendant and Joseph Wong. The evidence of YH Chan and KP Wong relates primarily to quantum. 2.The current site condition of the Occupied Areas 2.1As described by YH Chan in his report, the Occupied Areas are located on the north-eastern side of a private residential development known as The Parcville and the northern side of Shan Pui Hung Tin Tsuen. The Occupied Areas consists of two portions of agricultural land and their neighbourhood comprises mainly low-rise village-type houses and private residential buildings. 2.2Annex 1 of Joseph Wong’s report is a plan of the Occupied Areas (“Plan”) and it is reproduced as an attachment to this judgment. It is common ground that the Plan represents the correct identification of the Occupied Areas. 2.3As narrated by Joseph Wong and by reference to the Plan, the Red Area is in two portions. The southern portion is part of a narrow footpath leading to a larger footpath to the northern portion. At the southern end of the footpath is a metal gate with lock. The northern portion and the adjoining private lots are surrounded by hoardings and walls and altogether ten number of temporary structures are within the northern portion of which nine are used for residential purposes and one as a storeroom. The storeroom adjoins the Green Area with a door. The Green Area is occupied by a temporary structure and a canopy attached to the external wall of a house (No 241 Shan Pui Hung Tin Tsuen) (“House”) with the remainder being an open space fenced off by a fence wall. The House is located within the Deceased’s Land and stated in the 2nd defendant’s witness statements to be his address. 3.Summary of the parties’ positions (on liability issues) 3.1As highlighted by Mr Lau in opening, the present proceedings concern disputes between owners of neighbouring plots. As stated at §1.9 (1) above, Mr Lau placed emphasis on two periods, namely 2008 and 2014 respectively for the Green Area and the Red Area. This is because, as observed by Joseph Wong, the Green Area was fully enclosed within walls from February 2008 onwards and the Red Area within fences since 2014. 3.2The Relevant Defendants’ position in closing may be summarized as follows:-
3.3Mr Chan disagreed. The gist of the plaintiff’s arguments is as follows:-
3.4I shall first summarize the evidence relating to the liability issues, namely that of the 2nd defendant and Joseph Wong. 4.The 2nd defendant’s evidence 4.1The following matters are not in dispute.
4.2According to the 2nd defendant, some time before 1977, the Deceased and his family started to reside at a stone house erected on the Deceased’s land. The evidence in relation to their possession of the Occupied Areas is set out in very brief terms at the 2nd defendant’s first statement §§14-17. 4.3At his first statement §14, the 2nd defendant said, amongst other things:-
4.4Mr Lau relied heavily on the following part of the 2nd defendant’s first statement §15, which reads:-
4.5At his first statement §16, the 2nd defendant said:-
4.6The 2nd defendant’s first witness statement §17 reads:-
4.7As I understand the evidence, the 2nd defendant’s first statement §17 refers to the demolition of the stone house erected on the Deceased’s Land referred to at §4.2 above and the construction of the House in its place.[5] 4.8As regards the evidence pertaining to the Relevant Defendants’ case on estoppel by standing by, as observed Mr Chan, the 2nd defendant was silent on the plaintiff’s knowledge of the activities which took place at the Occupied Areas after 2008 and no evidence was adduced on the expenditures and maintenance incurred by the Relevant Defendants from 2008 onwards. Mr Lau did not contend otherwise. 4.9The 2nd defendant gave the following evidence when cross-examined by Mr Chan.
5.Joseph Wong’s evidence 5.1At the Relevant Defendants’ Written Closing §44, it was accepted that the precise scope and location of the fencing cannot be delineated in the evidence. In the light of the Relevant Defendants’ concession, it seems to me that it is not necessary to refer to Joseph Wong’s evidence in any great detail. Indeed, Mr Chan in his written closing hardly made any reference to Joseph Wong’s evidence. 5.2Mr Lau relied on the following aspects of Joseph Wong’s evidence as being consistent with the Relevant Defendants’ case.
5.3I do not believe that Mr Lau’s characterization of Joseph Wong’s evidence was disputed by Mr Chan. I do not, however, agree with Mr Lau that §§5.2(1) and (2) above are consistent with the Relevant Defendants’ case. 5.4As regards §5.2(1) above, Joseph Wong’s observation was that a portion of the Green Area was covered with wild vegetation. As invited by Mr Lau,[8] I have considered the relevant aerial photographs and there was no discernible “pattern” of the vegetation in the Green Area which appears to me to be more consistent with wild instead of cultivated vegetation. I also note that Mr Lau did not put to Joseph Wong that his characterization of wild vegetation was erroneous. 5.5In relation to §5.2(2) above, Joseph Wong’s evidence was that reconstruction works were carried out to a portion of the structures within the Deceased’s Land in 1979. Mr Lau did not put to Joseph Wong that the reconstruction works took place in the Occupied Areas. Further, the timing is inconsistent with the 2nd defendant’s evidence that the demolition of the pigsty took place in early 1980s: §4.5 above. 6.The Relevant Defendants’ case on estoppel 6.1The applicable principles are not in dispute. 6.2As explained by Recorder H Wong SC at Best Star Holdings Limited v Lam Chun Hing & Ors, HCA 409 of 2008, 22 February 2012 §136, a proprietary estoppel by standing by may arise in the following circumstances:-
6.3It is common ground that the touchstone of the doctrine is unconscionability. At Li Kwok Ching v Secretary for Justice, CACV 88 of 2015, 13 January 2016 §32, Lam VP (as he then was) formulated the principle as this: it is unconscionable that a landowner should knowingly stand by while a stranger incurs a detriment or disadvantage acting upon some misapprehension of his legal position regarding the land. 6.4Mr Chan made a forensic observation that the Relevant Defendants had in closing decided to shift its primary case from adverse possession to proprietary estoppel. That proprietary estoppel was originally the Relevant Defendants’ secondary case in opening was, Mr Chan submitted, a recognition of its weakness and it has become even weaker following the close of evidence. 6.5On the issue of whether an estoppel is made out, Mr Chan made the following points.
6.6In my view, Mr Chan is right in his first submission. The Relevant Defendants’ case on proprietary estoppel is pleaded at Amended Consolidated Defence and Counterclaim §12 (in respect of the Green Area) and §24 (in respect of the Red Area).[9] There is no plea that the Relevant Defendants acted upon some misapprehension of their legal position regarding the Occupied Areas. 6.7Further, as set out at §4.9(5) above, the 2nd defendant accepted that he knew that he did not own the Occupied Areas, at least from 2008 onwards. In these circumstances, the observations of Lam VP (as he then was) at Li Kwok Ching §§21 and 33 to 35 are apposite. At those paragraphs, the Court of Appeal upheld the findings by the court below that it was not unconscionable for the Government to assert its title over the land in question. In particular at §35, Lam VP (as he then was) said:-
6.8The present case is factually even more advantageous to the plaintiff, as unlike the factual findings in Li Kwok Ching (where there was an absence of explanation by the plaintiff in that case of his belief), there is an express acceptance by the 2nd defendant that there was no mistaken belief. On this ground alone, the Relevant Defendants’ case on estoppel by standing by fails. 6.9In so far as it is necessary, I also agree with Mr Chan’s second submission. As stated at §4.8 above, no evidence has been adduced by the Relevant Defendants on the plaintiff’s knowledge of the activities which took place at the Occupied Areas after 2008. Whilst the 2nd defendant’s evidence made reference to certain works being carried out by the plaintiff shortly after its acquisition of the Land in 1990, the 2nd defendant expressly did not adduce any evidence on the plaintiff’s knowledge of the activities carried out in 2008 or thereafter on which the Relevant Defendants relied in closing. Where there is no such evidence adduced by the Relevant Defendants, I decline to accede to Mr Lau’s invitation to draw an adverse inference against the plaintiff, on the basis that no factual evidence was adduced by it, to the effect that it did have knowledge and yet stood by the Relevant Defendants’ enclosure and building activities in 2008 and 2014. 6.10Even if an estoppel by standing by were made out, as set out at §4.8 above, no evidence was adduced by the Relevant Defendants on the expenditures and maintenance incurred by the Relevant Defendants from 2008 onwards. There is equally no evidence adduced by the Relevant Defendants as to whether the structures erected on the Occupied Areas (at least in the Red Area) were incoming producing. I believe Mr Lau was cognizant of the difficulties in this part of his case caused by the lack of evidence, as he submitted that the Relevant Defendants are entirely in the court’s hand as to what is the appropriate relief. 6.11There is no real quarrel between the parties that in determining what is the appropriate relief, the court will seek the minimum equity to do justice to the party relying on the estoppel and there must be proportionality between the expectation and the detriment: Crabb v Arun District Council [1976] Ch 179 at 198G and Sledmore v Dalby (1996) 72 P&CR 196 at 209. 6.12I bear in mind that the present case does not involve the abode of the 2nd defendant and his family, as the House is not within the Occupied Areas: §2.3 above. There is no evidence on who are the users of the temporary structures in the Red Area and the structures in the Green Area are peripheral to the use of the House as a residence (for storage and recreational use). Also by reason of the matters stated at §6.10 above, I am therefore not in any position to properly assess the proportionality between the expectation and the detriment in respect of the Red Area and it appears to me that any detriment as regards the Green Area cannot be said to be substantial. In these circumstances, I do not see how the Relevant Defendants can satisfy me that the minimum equity lies in the Relevant Defendants’ primary position, namely the plaintiff is estopped from asserting its right to evict the Relevant Defendants: §3.2(1) above. 6.13Had it been necessary to grant relief, I would have accepted Mr Chan’s submission that even if I were to accede to Mr Lau’s secondary position, namely to grant the Relevant Defendants a licence to remain on the Occupied Areas revocable on reasonable notice, such notice would have expired by now given the fact that the writs were issued in November 2017. 6.14For the reasons stated in this section, I reject the Relevant Defendants’ case on estoppel by standing by. 7.The Relevant Defendants’ case on adverse possession and/or encroachment 7.1There is again no real difference between counsel on the applicable principles. They may be summarized as follows. 7.2In Richlands Properties Ltd v Occupiers of Lot 1347 of DD102 & Anor [2021] 4 HKLRD 262 at §§22-25, DDJ Zabrina Lau observed that:-
7.3The evidence required to establish the essential elements of adverse possession must be “compelling”, which gives recognition to the serious consequence of a finding that the title of a paper owner is displaced by an adverse possessor, although the standard of proof is still the normal civil standard, ie on a balance of probabilities: Tsang Foo (aka Fu) Keung and Key Kwong Development Ltd v Chu Jim Mi Jimmy [2015] 6 HKC 200 at §42 per Chow J; Tsang Foo Keung v Chu Jim Mi Jimmy [2017] 3 HKC 527 at §22(4) per Harris J. 7.4It is a further common ground between the parties that the relevant limitation period is 20 years as the Relevant Defendants’ possession of the Occupied Areas is alleged to have commenced before 1 July 1991: sections 7(2) and 38A of the Limitation Ordinance Cap 347. 7.5Yet another common ground is that the defence of encroachment can only get off the ground if the Relevant Defendants are able to succeed on a case of adverse possession although the relief between the two is different: Secretary for Justice v Chau Ka Chik Tso (2011) 14 HKCFAR 889 at §§20 and 59. As stated at Jourdan & Radley-Gardner: Adverse Possession (2nd Edn) §25-42:-
7.6As stated at §3.2(2) above, the Relevant Defendants only pursue their fall-back case on adverse possession or encroachment in respect of the Green Area. 7.7In closing, the predominant evidence referred to by Mr Lau which was said to be supportive of the Relevant Defendants’ case on factual possession was a part of the 2nd defendant’s first statement §15: §4.4 above.[10] Mr Lau submitted that this part of the 2nd defendant’s evidence was not seriously challenged and therefore sufficient evidence has been adduced to establish a claim for adverse possession of the Green Area. 7.8I am unable to agree that such scanty bare assertions can amount to compelling evidence to support the essential elements of adverse possession. 7.9The activities alleged at relevant parts of the 2nd defendant’s first statement §15 are: (1) raising pigs at the pigsty, (2) rearing chickens and pigeons, (3) growing various fruit trees and (4) family’s recreational activities. I am not satisfied that the foregoing activities, whether individually or collectively, can amount to sufficient evidence of continuous exclusive possession of the Green Area for the requisite time period for the following reasons.
7.10It must be emphasized that the part of 2nd defendant’s statement §15 relied upon by Mr Lau is, at best, evidence of use and not evidence of exclusive possession. As Lam VP (as he then was) said at Gotland Enterprises Ltd v Kwok Chi Yau, CACV 260 of 2014, 19 Jan 2016 §§36 to 37:-
7.11Where, as here, the evidence is conceded by Mr Lau to demonstrate that fencing was only erected at the southern end of the Green Area in 1992 or 1994,[13] I do not believe that there is any or any sufficient evidence of the steps that were taken by the Relevant Defendants to exclude the world at large for the requisite duration. 7.12In view of the findings made above, I do not find it necessary to draw any adverse inference against the Relevant Defendants for their failure to call any of the 2nd defendant’s siblings to come forward to give evidence. 7.13For completeness, I also deal with Mr Chan’s argument that the occupation by the Relevant Defendants of the Occupied Areas was more likely than not pursuant to a licence granted by KF Lam prior to the acquisition of the Land by the plaintiff in April 1990. By reason of how the Relevant Defendants have put their case, I do not regard this issue as relevant. As the writs were issued In November 2017, the relevant limitation period of 20 years began to run in November 1997. This is not a case where the Relevant Defendants require the alleged “licence period” (ie pre April 1990) to make up sufficient time for the 20-year limitation period. 7.14For the reasons stated in this section, I reject the Relevant Defendants’ case on adverse possession, and as a result, also their case on encroachment in respect of the Green Area. 8.Relief claimed by the plaintiff 8.1The plaintiff claims mesne profits, demolition costs and possession of the Occupied Areas. Mr Lau did not dispute that the plaintiff is entitled to the claimed relief should the Relevant Defendants fail to establish their case on estoppel and encroachment. 8.2As a general observation, as I understand Mr Lau, his cross-examination and submissions made in closing sought to raise a number of queries in relation to the correctness of the plaintiff’s expert evidence, and flowing from the foregoing, the Relevant Defendants invited me to decline to award any damages or to award only nominal damages to the plaintiff. In this process, as the Relevant Defendants did not adduce any of their own expert evidence, they have not proffered an alternative assessment on the basis that the query raised by them were valid. With respect, it seems to me that the line taken by the Relevant Respondents is not the most attractive approach. Mesne profits 8.3The plaintiff relies on the expert opinion of YH Chan. It will be recalled that he was unable to attend the trial: §1.11 above. 8.4The methodology employed by YH Chan was direct comparison which involved identification and analysis of rental transactions that are of similar nature as the Occupied Areas. Mr Lau did not argue that this an inappropriate methodology. 8.5As YH Chan was of the view that the existing use of the Occupied Areas seemed to be garden or storage use of the House,[14] he therefore gathered relevant short term tenancies for garden use entered into between occupiers and the government in the Yuen Long District as comparables. After the assemble of comparables, he made necessary adjustments in respect of time, quantum and location so as to derive an appropriate unit rent of the Red Area and the Green Area. 8.6Mr Lau criticized YH Chan’s opinion on the following aspects.
8.7I do not regard Mr Lau’s criticisms as well-founded. 8.8In relation to Mr Lau’s first complaint, as pointed out by Mr Chan, the Green Area and the Red Area were treated largely as distinct by the Relevant Defendants themselves. They were fenced off at different times[15] and their uses were also different: §2.3 above. 8.9Even if there should be an adjustment by reference to land size, every 1,000 ft2 difference would, according to YH Chan, cause only 1% upward or downward adjustment depending on whether the comparable is larger or smaller in area.[16] Mr Lau did not attempt to show that his criticism, even if valid, cannot be dealt with by a small adjustment (say 1 or 2%) to the figures assessed by YH Chan. None of the 10 comparables[17] (ranging from 102 to 872 ft2) were larger or smaller than the Green Area (580 ft2) and the Red Area (821 ft2) by 1,000 ft2. 8.10In relation to Mr Lau’s second complaint, there is no evidence that the neighbouring lot owned by the plaintiff has been rented out. I am unable to accept Mr Lau’s submission that, as the neighbouring lot was left vacant, it tended to show that the Occupied Areas might not have an available market at all, as there was simply no evidence that the plaintiff had attempted to rent out the neighbouring lot but failed. 8.11Further, as Mr Lau accepted that direct comparison (with adjustments for factors such as location) was an appropriate methodology, I fail to see why the non-inclusion of the plaintiff’s neighbouring lot as a comparable is relevant. If it is the Relevant Defendants’ case that the Occupied Areas were not (or less) marketable, one would have thought that this may be demonstrated by comparing the features of the Occupied Areas with the comparables selected by YH Chan. Mr Lau did not attempt to do so. 8.12I further do not accept Mr Lau’s criticism of YH Chan’s choice of using Government leases as comparables. As pointed out at Fan Chun Keung v The Secretary for the Environment, Transport and Works, LDMR 5 of 2004, 2 November 2005 §10, in valuation exercises, the comparables chosen are bound to differ in certain aspects from the subject site. Apart from raising a query, there is no evidence proffered, and no submissions made, by the Relevant Defendants that rents for private leases are habitually lower than those for Government leases and therefore YH Chan’s assessment represented an inflated claim. 8.13I therefore accept the YH Chan’s valuation of the monthly rent of the Red Area and the Green Area. 8.14In relation to the duration for which mesne profits should be awarded, the plaintiff submitted as follows (to which the Relevant Defendants did not submit to the contrary).
8.15I will assess the plaintiff’s claim in accordance with the preceding paragraph. 8.16Mesne profits for the Green Area from 1 December 2011 to 31 May 2022 are therefore assessed as follows.
8.17Mesne profits for the Red Area from 1 January 2014 to 31 May 2022 are therefore assessed as follows.
8.18For the period after 31 May 2022, mesne profits are to continue at the 2022 monthly rent until possession of the of the Green Area and the Red Area is delivered by the Relevant Defendants to the plaintiff. Demolition costs 8.19There is no dispute between the parties on the scope of the demolition works. According to KP Wong, the works entailed the demolition of four temporary structures (totaling 59.9 m2) and a canopy (16 m2). At §4.7 of his Report, KP Wong estimated that the costs of the demolition works were in the sum of HK$311,985.20. 8.20Mr Lau challenged KP Wong’s evidence on two aspects. First, it was said that KP Wong had over-estimated the resources required to carry out the demolition works. Secondly, he complained that the profit margin built into KP Wong’s assessment was excessive. 8.21KP Wong estimated that 106 man-days are required to demolish the five unauthorized structures and to clear all debris from site. The Relevant Defendants did not adduce any evidence on what instead should be a reasonable estimate. Instead, Mr Lau made a number of forensic observations. 8.22First, Mr Lau submitted that it was KP Wong’s own evidence that the demolition works were simple. I do not see how that assists the Relevant Defendants, as time is still required carry out simple works. 8.23Secondly, Mr Lau submitted that as the insurance premium was only HK$12,000, it is improbable that an insurer would be willing to accept a premium for as low as around HK$100 per man day. I am not in a position to assess the correctness of that submission, as there is simply no evidence before me as to how insurance premiums are calculated or how its amount can shed light on the number of man-days required for a particular task. One would have thought that even if a job required one man-day, the associated risks (such as working in an inherently risky environment involving the use of hazardous tools) would have a significant bearing on the insurance premium. 8.24Thirdly, Mr Lau referred to the Lands Department’s demand that the unauthorized structure had to be demolished within 28 days and submitted an estimate of 106 man-days would make it impossible to comply with the demand. In my view, Mr Lau’s submission is not a cogent one. First, it ignores KP Wong’s evidence that four workers would be on site to carry out the demolition works. The 26.5 days (106 man-days divided by four) therefore required is within the 28 day period stated in the Lands Department’s demand, even if it were a real or hard deadline. There is however no evidence before the court that the time period imposed by the Lands Department was as a result of assessment of time required carried out by it (as opposed to a standard demand) or that time extensions are not ordinarily given by the Lands Department. 8.25Mr Lau next submitted that the 30% profit margin estimated by KP Wong is excessive. I note that this is a gross profit margin as no overhead was built into any of the costs item (namely Items 1 to 10 of KP Wong’s table at §4.7 of his report). I am unable to say that this is unreasonable and the Relevant Defendants have certainly not adduced any evidence to suggest that it is. 8.26For the reasons stated above, I do not regard any of the tangential criticisms made by Mr Lau to be valid and I accept KP Wong’s estimate (ie HKD 311,985.20 (“Assessed Demolition Costs”)). The Red Area should be apportioned a greater portion of the Assessed Demolition Costs, as the bulk of the unauthorized structures are situated in the Red Area. Doing the best I can, it seems to me that 60% of the Assessed Demolition Costs should be attributed to the Red Area. 8.27As a further general observation, where, as set out in the paragraph following, the Relevant Defendants made an open counter-offer at the trial to carrying out the demolition works, one would have expected that they would have looked into the costs to do so. Even if the Relevant Defendants were not minded to engage expert witness, evidence of quotations obtained by them would have been the direct evidence to challenge KP Wong’s estimate. There is no evidence adduced by them that the demolition works can be carried out at lower costs. 8.28The Relevant Defendants made a counter-offer to undertake to demolish the unauthorized structures and to indemnify the plaintiff should the they fail to do so within the time period ordered by the court. Similar submissions were made at the hearing before Master Maurice Lam on 30 October 2020[18] to (unsuccessfully) resist the plaintiff’s application to adduce expert evidence on demolition costs. In addition to the observation made in the preceding paragraph (namely there is no evidence that the Relevant Defendants would benefit financially from the counter-offer), I consider the following matters set out by the Master in his Decision and repeated by Mr Chan in closing are cogent reasons for not acceding to the counter-offer.
Order for possession 8.29In the event that the Relevant Defendants are not required or given the opportunity to demolish the unauthorized structures themselves, they asked for 14 days for them to deliver possession of the Occupied Areas to the plaintiff. I do not regard this to be an unreasonable period. 9.Conclusion 9.1For the reasons stated above, I reject the Relevant Defendants’ defence and enter judgment in favour of the plaintiff.
9.2The plaintiff does not seek pre-judgment interest. Interest on §§9.1(2), (3), (5) and (6) above will therefore run at the judgment rate until payment. 9.3The Relevant Defendants’ counterclaims are dismissed. 9.4I also make a costs order nisi that the Relevant Defendants do pay to the plaintiff the costs of the consolidated action and the counterclaims (including any costs reserved), to be taxed if not agreed with a certificate for counsel. 9.5I thank both counsel for their helpful assistance.
Mr Derek JY Chan, instructed by Foo & Li, for the plaintiff Mr Martin Lau, instructed by Y.S. Lau & Partners, for the 1st and 2nd defendants The 3rd defendant was not represented and did not appear
[1] In view of the Relevant Defendants’ evidence on adverse possession, Mr Lau did not make submissions as to whether all the necessary parties have been joined in order for the counterclaim to succeed. However, this is not material in the light of the conclusions reached in this judgment. [2] Clarified in viva voce evidence to be between 1977 to 1980. [3] Clarified in viva voce evidence to be the early 1980s. [4] The date was corrected by the 2nd defendant’s second statement from 4 June to 4 April 2001. [5] Exhibit D1. [6] The 2nd defendant was asked in re-examination about the photographs. The photographs referred to by him are all undated and there was no attempt to identify the locations captured in the photographs. [7] §§4.4 and 4.5 above. [8] By reference to Tang Wong Loi & Ors v Chan Sam Kiu & Anor [2018] HKDC 234 §22. [9] Not settled by Mr Lau. [10] By reason of Mr Lau’s concession set out at §5.1 above, he did not in closing place reliance on the 2nd defendant’s evidence on fencing set out at §4.3 above. [11] For example, those at C/605-632. [12] Answers to Request for Furthers and Better Particulars of Amended Consolidated Defence and Counterclaim §(9). [13] §§5.1 and 5.2(3) above. [14] YH Chan and Joseph Wong appear to have come to different views on the existing use of the temporary structures in at least the Red Area: §2.3 above. It has not been suggested by Mr Lau that YH Chan’s view that they were for storage (as opposed to Joseph Wong’s view that nine of the temporary structures were for residential uses) would prejudice the Relevant Defendants on the assessment of mesne profits. For completeness, the site photographs in KP Wong’s report do suggest that the temporary structures in the Read Area are used for residential purposes. [15] §3.1 above. [16] Not disputed by Mr Lau. [17] Appendices VII and VIII of YH Chan’s Report. [19] Mr Chan in closing sought an order for possession instead of vacant possession. [20] See §8.26 above. Further, it seems to me that the plaintiff cannot realistically carry out the demolition works until possession is delivered. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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