Hang Tat Sing Investment Co Ltd v. Chi Wo Tan Ltd and Another

HCA 2989/2016

[2026] HKCFI 5487

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2989 OF 2016

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D E C I S I O N

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INTRODUCTION

1.On 13 January 2026, I handed down the judgment in this action: see [2026] HKCFI 129.  I shall adopt below the defined terms and paragraph numbers used in that judgment.

2.I held that the 1^st defendant failed to establish (1) adverse possession in respect of the four coloured areas, and (2) proprietary estoppel in respect of the same.  The 1^st defendant was found liable for trespass in respect of the yellow area, pink area and green area since about 2006.  I therefore upheld the plaintiff’s claim and dismissed the 1^st defendant’s counterclaim.  I ordered the 1^st defendant to deliver vacant possession of the three areas to the plaintiff.  I also granted a mandatory injunction ordering the 1^st defendant to demolish the structures built on those three areas.  Liberty to apply was granted.  Nominal damages for trespass were awarded.

3.By notice of appeal dated 10 February 2026, the 1^st defendant seeks to appeal against the judgment.

4.Arising from the appeal, there are now two summonses before the court:

(1)  By summons of the same date as the notice of appeal, the 1^st defendant applies for stay of execution pending its appeal.

(2)  By summons dated 6 March 2026, the plaintiff applies for an indemnity to be given by the 1^st defendant against all claims and losses as a result of, arising from or in connection with the Structures until the 1^st defendant’s full compliance of the order of vacant possession and the mandatory injunction.

5.By consent of the parties, the summonses are dealt with by paper disposal.

THE 1^ST DEFENDANT’S STAY SUMMONS

6.In respect of the stay summons, it was agreed by the parties at the call-over hearing on 27 March 2026 that the only issue which falls to be determined is whether the 1^st defendant’s grounds of appeal are reasonably arguable, ie with reasonable prospects of success, which is the threshold laid down in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84, para 9(6).  In other words, if I find that the grounds are reasonably arguable, it was agreed that a stay of execution should be granted pending the appeal.  Conversely, if I find that none of the grounds is reasonably arguable, then no stay should be granted.

7.The grounds of appeal are lengthy, running to about 23 pages.  They are structured as follows:

(1)  Grounds 1, 1A, 1B and 1C challenge my rulings on adverse possession.

(2)  Grounds 2A, 2B and 2C challenge my rulings on proprietary estoppel.

(3)  Ground 3 challenges the grant of the mandatory injunction.

8.The grounds do not raise any point of law.  They are all directed at the factual findings made by me and, in respect of Ground 3, my exercise of the discretion on the grant of the injunctive relief.

Legal principles

9.For appeals of this nature, the approach of the appellate court is well-established.  Mr Erik Shum and Ms Evelyn Cheng, counsel for the plaintiff, have referred me to the decision in China Gold Finance Ltd v CIL Holdings Ltd CACV 11/2015, 27 November 2015 and summarised the principles (from paras 10 to 19), which I shall adopt.

10.In an appeal against findings of fact:

(1)  The Court of Appeal can only intervene in findings of fact of the trial judge when they are plainly wrong.

(2)  The appellant must identify palpable errors in the judgment.  Palpable errors are errors of such nature that warrants intervention from the Court of Appeal.

(3)  The mere assertion that the finding of the judge is against the weight of the evidence or that the judge should have reached another conclusion because of points advanced in closing submissions of the trial are not palpable errors.

(4)  Where a trial has reached a conclusion on the primary facts, it is only in a rare case, such as where that conclusion was one (a) which there was no evidence to support, (b) which was based on a misunderstanding of the evidence, or (c) which no reasonable judge could have reached, that an appellate court will interfere with it.

(5)  The appellate process is not designed to give a litigant a platform for regurgitating his closing submissions on the evidence and the factual aspects of the case again with the hope that the appeal judges may come to a different view to that of the trial judge.  It is a misuse of the appellate process to try to overturn the findings of fact of the trial judge by merely re-running before the Court of Appeal arguments which had been considered but rejected by the trial judge.

Ground 1

11.Under Ground 1, the 1^st defendant contends that my finding that it failed to prove the structures or activities said to have been taking place on the four coloured areas prior to 2006 was wrong as it was based on a misapprehension of the evidence.

12.This is a generic ground and its success will turn on whether Grounds 1A, 1B and/or 1C are made out.  There is no need to deal with Ground 1 independently.

Ground 1A

13.Under Ground 1A, the 1^st defendant challenges my factual findings in relation to the yellow area and contends that they are unsustainable on a proper understanding of the evidence. 

14.This ground takes up over seven pages of the notice of appeal.  I do not propose to summarise what is stated there.  In gist, there are three broad complaints.  The first relates to the survey evidence on the yellow area, the second concerns the factual evidence of Tong Wai Lop and Law Wai Mui, and the third relates to the presumption of continued possession.

15.As regards the complaint concerning the survey evidence, it is contended that I paid no attention to the survey sheets from 1976 to 2006 and ignored the agreed evidence of the surveying experts on them.  I reproduce the agreed evidence below:

“With reference to the survey sheet of 1976, the northern and eastern parts of the Yellow Area was shown as part of the larger platform (to its east) erected with a section of fence at the south-eastern corner.  In 1978-2006 survey sheets, the eastern part of the Yellow Area was shown being enclosed with fence.”

16.Mr Albert Chan, counsel for the 1^st defendant, submits that had I taken into account the above survey sheets, I would have concluded that the alleged land platform could be seen in the yellow area in the 40 years since 1963.  This was a fundamental error, which led to the ultimate factual findings concerning the yellow area being flawed.

17.I do not consider that this complaint is validly made. 

18.First, the agreed expert evidence on the survey sheets was recited in para 100(5) of the judgment.

19.Second, I raised a query with the 1^st defendant on the survey sheets in opening submissions.  The survey sheets over the years showed a fence running across the yellow area, rather than going around it.  On its face, what the survey sheets showed did not align with the 1^st defendant’s case on the yellow area, according to which the entire yellow area should be enclosed within the fence.  See para 46 for the 1^st defendant’s case:

“By not later than the 1960s, the founders had levelled the third area (ie including the yellow area), which became a large raised open-air platform in the monastery.  It had an elevation of about 6 ft from the fourth area.  It was used as a level grass field and a garden, with a retaining wall bounding it.  Metal wire fencing was erected on the outer edge of the platform.” (underline added)

20.The agreed expert evidence described in words what was shown on the face of the survey sheets.  And what was shown was that only a (small) part of the yellow area was enclosed by the fence.  I raised the point with Mr CY Li, SC, who then was representing the 1^st defendant with Mr Albert Chan.[2] He disagreed that the survey sheets were inconsistent with his case as they did show that some activities were going on in the yellow area.  Notwithstanding the answer, it remained to be the case that the survey sheets, on their, face, did not support the 1^st defendant’s case of the entire yellow area being part of the larger land platform.  In his written closing submissions, Mr Li simply recited the evidence on the survey sheets without following up on the query raised by the court. 

21.Given the above, it is incorrect for Mr Chan to now say that I had paid no attention to or had ignored the survey sheets and the agreed expert evidence on them.

22.As regards the complaint concerning the 1^st defendant’s factual evidence, it is now contended that I was wrong in disregarding the evidence of Tong Wai Lop and Law Wai Mui on the use and occupation of the Occupied Areas.  This part of Ground 1A recites the evidence of the two factual witnesses and concludes that I failed to give proper weight to their evidence, as a result of which I arrived at faulty findings.

23.This complaint is a re-run of the arguments already made at the trial and rejected in the judgment.  The 1^st defendant has failed to pinpoint any palpable error which warrants the intervention of the Court of Appeal.  This is not permissible.  This complaint does not amount to a proper ground of appeal.

24.As regards the third complaint, the 1^st defendant contends that I erred in describing its case on the yellow area as based on a presumption of continued possession (see paras 150 to 151) when it had never relied on such a presumption, and that I ought to have found that the land platform continued to be in place since 1963 (up to 2003).

25.While the 1^st defendant did not formally invoke any presumption, its surveying expert and its counsel were in substance inviting the court to assume that the land platform had remained in place, absent any contrary indication: see para 151.  In any event, I dealt with and resolved the factual issue in paras 147 to 155 by examining the evidence before the court.  The 1^st defendant fails to point to any palpable error in the process.  This complaint is therefore not valid.

26.To conclude, Ground 1A is not reasonably arguable.

Ground 1B

27.Under Ground 1B, the 1^st defendant challenges my factual findings in relation to the green area and contends that I failed to properly understand and analyse the evidence.  The ground recites the evidence adduced in respect of the green area at the trial.

28.This is, again, a re-run of the arguments already made at the trial and rejected in the judgment, without the identification of any palpable error which warrants the intervention of the Court of Appeal.  Ground 1B is not a proper ground of appeal and is not reasonably arguable.

Ground 1C

29.Under Ground 1C, the 1^st defendant challenges my factual findings in relation to the pink area and the blue area, and contends that I failed to properly understand and analyse the evidence.  The 1^st defendant relies on Grounds 1A and 1B in support of this ground on the basis that the acts of possession of the yellow area and the green area can be used to support its case on the use of the pink area and the blue area.

30.As I have found that neither Ground 1A nor Ground 1B is reasonably arguable, it follows that Ground 1C is similarly not reasonably arguable.

Ground 2A

31.Under Ground 2A, the 1^st defendant argues that I erred in framing its claim of proprietary estoppel as limited exclusively to that of the “standing by” type (see para 11) when it was not.  It was also asserting a case of proprietary estoppel by representation, which arose from the fact that the plaintiff never made use of the Occupied Areas, which had been occupied by the 1^st defendant for decades, and the plaintiff stood by without taking any action.  This amounted to a representation that the plaintiff would not enforce its rights against the Occupied Areas.  Under this type of proprietary estoppel, the 1^st defendant’s mistaken belief and the plaintiff’s knowledge of that belief were not essential elements.  And I erred in considering them to be part of the requirements for establishing proprietary estoppel in this case.

32.What case of proprietary estoppel the 1^st defendant had put forward must be a matter of interpretation of its pleadings.  It is therefore necessary to examine the relevant pleas, which are to be found in paras 18(5) and 21 of the re-re-amended defence and counterclaim.

33.Para 18(5) read:

“(5) Further and/or in the further alternative, even if, which is not admitted, the Building Works were erected or built upon a portion of Lot 472B, the 1^st Defendant refers to the matters set out in Paragraphs 21(1)-(9), including Paragraph 21.(2A), herein below and avers that in the premises:-

(a) the Plaintiff had/has stood by without taking any action, and therefore represented that it would not object to and/or enforce its rights against the Building Works;

(b) the 1^st Defendant had acted to its detriment in reliance upon the same (as well as upon its mistaken belief as pleaded in Paragraph 21.(2A) below), including by expending monies on the erection and maintenance of the Building Works;

(c) It would be unconscionable to permit the Plaintiff to obtain the relief now sought; and

(d) The Plaintiff is estopped from asserting its proprietary right over Lot 472B and the Building Works erected thereon against the 1^st Defendant.” (underline added)

34.Paras 21(1) to (3) read (the rest of para 21 concerns the other elements of estoppel which are not presently relevant):

“21. The 1^st Defendant avers that it would, for the following reasons, be oppressive to the 1^st Defendant for the Plaintiff to be granted the mandatory injunctions sought by the Plaintiff:-

(1) The Plaintiff has never made use of the Land;

(2) As pleaded herein above, the 1^st Defendant and the 1^st Defendant’s Predecessors have been in continuous occupation of the Land through the operation of the Monastery since 1956, or in the alternative, at a subsequent date as pleaded above, (and in any event not later than about 2006, as pleaded in Paragraph 2);

(2A) The aforesaid continuous occupation of the Land by the 1^st Defendant and the 1^st Defendant’s Predecessors was a result of and/or rooted in their mistaken belief that they were entitled to the Land and Occupied Areas, having regard to their acquisition of Lots 485, 486, 848, 867 and their continuous occupation of the Land and Occupied Areas for a significant period of time thereafter ( as already pleaded in this Re-Re-Amended Defence and Counterclaim);

(3) At the time of the building and/or erecting of 1^st Defendant’s Paragraph 2 Works, the Plaintiff was well aware of the 1^st Defendant’s ongoing construction in and of its right to Lot 472B (and the Plaintiff was therefore aware and/or must have been aware of the 1^st Defendant’s mistaken belief that they were entitled to the Land and Occupied Areas). Notwithstanding the same, the Plaintiff did not object to the 2006 Construction Works and in such circumstance, the 2006 Construction Works continued to be carried out and were duly completed in March 2006. Thereafter, the Plaintiff only complained of such matters in or around June, 2011.” (underline added)

35.It is plain from the pleas, especially the parts underlined above, that the 1^st defendant’s mistaken belief was a material part of its case on proprietary estoppel.  Importantly, as pleaded, there is no separate or independent case of estoppel which was based solely on representation without any mistaken belief, as now suggested by the 1^st defendant.

36.This was also made clear by the 1^st defendant’s own closing submissions.  The topic of proprietary estoppel was dealt with in paras 109 to 136.  In para 109, it was unequivocally stated that the 1^st defendant’s case was “based on estoppel by standing by (i.e. silence, inaction, or acquiescence)”.  The element of mistaken belief was discussed at different stages of the analysis in the written submissions.  Counsel did not present a separate or independent case based on the “representation” type of estoppel alone.

37.That was how the 1^st defendant presented its case of proprietary estoppel in its pleadings and at the trial.  It is wrong for it to now go back on that and complain that the court had wrongly framed its case in the judgment. 

38.There is no merit in Ground 2A.

Grounds 2B and 2C

39.Grounds 2B and 2C can be conveniently dealt with together.  These grounds challenge my findings that the 1^st defendant failed to make out its case of mistaken belief (Ground 2B) and its case of the plaintiff’s knowledge of such mistaken belief (Ground 2C).

40.These grounds recite the evidence adduced at the trial and go on to say that I failed to properly analyse the evidence.

41.Again, a rehash of the points made at the trial and rejected by the court without pinpointing any palpable error does not amount to a proper ground of appeal.  Grounds 2B and 2C are accordingly not reasonably arguable.

Ground 3

42.Under Ground 3, the 1^st defendant says that I erred in my exercise of discretion to grant the mandatory injunction instead of awarding only damages to the plaintiff.  Such exercise of discretion was unreasonable as my decision was patently wrong.  The 1^st defendant also says that I applied the wrong burden of proof on the issue of safety of the retaining wall (see paras 201 to 203).

43.Again, this ground is a repetition of the arguments made on the issue of reliefs at the trial and is advanced in the hope that the Court of Appeal may exercise the discretion afresh.  No palpable error has however been identified by the 1^st defendant.  The ground is not a proper ground of appeal and is not reasonably arguable.

Conclusion

44.None of the grounds of appeal is reasonably arguable.  In accordance with the agreed approach, the stay summons should be dismissed.

THE PLAINTIFF’S INDEMNITY SUMMONS

45.I now turn to the plaintiff’s summons seeking an indemnity against the 1^st defendant

“against all claims, demands, losses, damages, costs, and expenses which the Plaintiff may incur or suffer as a result of, arising from or in connection with the Structures … until the 1^st Defendant’s full compliance of paragraphs 247(1) and (2) of the said Judgment”

46.The application was not accompanied by any supporting affidavit.  In his written submissions, Mr Shum explains that the existence of the UBWs continues indefinitely until demolition and in the meantime that poses a threat to the plaintiff and the public with the risk of collapse, potential occupiers’ liabilities, and law enforcement actions by the Buildings Department.  As a result of the 1^st defendant’s stay application, the plaintiff anticipates that the time for the 1^st defendant to comply with the mandatory order would be prolonged.  It is for this reason that there is a need for the plaintiff to seek an indemnity to protect its position against the risks.  The indemnity should be granted regardless of the outcome of the stay application.

47.The indemnity sought is crafted in extremely wide terms.  If granted, the plaintiff is effectively indemnified for any claim arising from the Structures, regardless of the reason causing such claim, eg, whether the 1^st defendant is at fault or not.

48.It is unclear to me what the legal basis is for seeking such an all-embracing indemnity, and that is, in my view, fatal to the plaintiff’s application.

49.In the margin of the summons, the inherent jurisdiction of the court is cited as the basis of the application.  However, Mr Shum now makes it clear that the plaintiff is relying on the “liberty to apply” granted by the court in the judgment as the basis of the application.  Inherent jurisdiction is no longer relied on.  It is contended that the general reliefs granted by the court do not address the possible interim position that the 1^st defendant fails or refuses to comply with the injunction, and this is exactly the type of situation in which the plaintiff may seek further and specific orders arising from any non-compliance pursuant to the “liberty to apply”.

50.I do not accept that contention.  Liberty to apply is usually given together with an order which, by its nature, requires working out, and the working out involves matters on which it may be necessary to obtain the decision of the court: see, eg, Re GW Electronics Co Ltd [2022] 5 HKLRD 857, [2022] HKCA 1590, para 53.

51.The indemnity sought by the plaintiff can hardly be said to be for the working out of the mandatory injunction.  Rather, it creates substantive rights and obligations of the parties.  I reject the contention that the “liberty to apply” covers the plaintiff’s application.  In the absence of any identifiable proper legal basis underpinning the application, it should be refused.

52.For completeness, I should add that if the 1^st defendant is now saying that the indemnity should be granted as part of the reliefs arising from the 1^st defendant’s trespass, that relief should have been sought in its pleadings and at the trial.  That did not happen.  The court is now functus on this matter.  

ORDERS

53.I dismiss the 1^st defendant’s stay summons and the plaintiff’s indemnity summons.

54.I make a costs order nisi that the plaintiff do have costs of the stay summons, and the 1^st defendant do have costs of the indemnity summons, and in each case the costs should include all reserved costs and will be summarily assessed if not agreed, with a certificate for two counsel.  The 1^st defendant has already lodged its statements of costs.  I direct that (1) the plaintiff do lodge its statement of costs within 14 days, (2) the plaintiff and the 1^st defendant do lodge their respective lists of objections (which should be within two pages) within 14 days after that, and (3) summary assessment be conducted on the papers after the deadline.

Written submissions by Mr Erik Shum and Ms Evelyn Cheng, instructed by Kao, Lee & Yip, for the plaintiff

Written submissions by Mr Albert Chan, instructed by Allen Chan & Co, for the 1^st defendant