The House of Dior Ltd v. David See Chai Lam and Another
Read the full judgment text of HCA 2564/1971 on BabelCite. This High Court CFI judgment was delivered on 12 March 1973.
1. This is an action relating to a plot of land in Shatin near Tai Po Road known as Demarcation District 187 Lot No.535: (hereinafter referred to as "Lot 535") in a dispute between the House of Dior Limited (hereinafter referred to as "the plaintiff") and David See Chai Lam (hereinafter referred to as "the 1st defendant"). The Ka Wah Bank Limited (hereinafter referred to as "the 2nd defendant") and Siu See Leong and Eva Siu (hereinafter referred to as "the 3rd defendant"), as to the shape and bo
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HCA002564/1971 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION ACTION NO.2564 OF 1971 -----------------
----------------- Coram: Li, J. in Court Date of Judgment: 12 March 1973 ----------------- JUDGMENT ----------------- 1. This is an action relating to a plot of land in Shatin near Tai Po Road known as Demarcation District 187 Lot No.535: (hereinafter referred to as "Lot 535") in a dispute between the House of Dior Limited (hereinafter referred to as "the plaintiff") and David See Chai Lam (hereinafter referred to as "the 1st defendant"). The Ka Wah Bank Limited (hereinafter referred to as "the 2nd defendant") and Siu See Leong and Eva Siu (hereinafter referred to as "the 3rd defendant"), as to the shape and boundary of Lot 535 should take. It is an action which would never be necessary and would never be brought but for the gross inefficiency on the part of the New Territories Administration and the complacency of those responsible for the issue of the Crown Lease. The history of this Lot 535 as supported by documentary exhibits put before me and the evidence produced is beyond dispute and is as follows:- 2. On the 15th of July, 1952, Lot 535 was put up for auction by the new District Commissioner of the New Territories as a garden lot. The Conditions of Sale with a site plan attached indicate that it had an area of 13,490 square feet in the shape which looked like a rectangle with a base of 71 feet north and south and two sites of 190 feet east and west as shown in Exhibit C1. 3. Clause 4 of the General Conditions of Sale provides:-
4. Clause 5 of the General Conditions of Sale provides:-
5. Clause 8 of the General Conditions of Sale provides:
6. Clause 13 of the General Conditions of Sale provides:-
7. Clause 14 of the General Conditions of Sale provides:-
8. By Memorandum of Agreement Lot 535 was sold on the 15th of July 1952 to the Hotel Edinburgh Limited - see Exhibit C2. 9. A house on the southern portion of Lot 535 was built by Hotel Edinburgh Limited in the years 1953/54. There is no precise evidence as to the date of completion of this house but I find on the balance of probabilities that this house must have been built within the year 1953/54 because the Conditions of Sale required that the house be completed in twenty-four calendar months' time, and that the architectural plans were received by the Building Ordinance Office on the 2nd of November 1953. This is further supported by the fact and document that on the 16th of February 1956 Hotel Edinburgh Limited sold a southern portion of Lot 535 with a house as shown in Memorandum Registration No. 134455 to one Mr. G.B. King. The southern portion with a house was carved out as Section A of Lot 535 and has a base of 71 feet in the southern boundary and a side of 65 feet east and west giving a total area of approximate 4,615 square feet. The remaining portion of Lot 535 on the north of Section A was sold by the Hotel Edinburgh Limited to one Lee Mok Cheuk Yin on the 23rd of February 1956. This is supported by the documentary evidence Exhibit C4, Memorial No. 134469 which showed the remaining portion has a base of 71 feet adjoining Section A on the south and the sides east and west, a line of 125 feet giving an area of approximate 8,875 square feet. 10. On the 22nd of June 1957 one half of the remaining portion (hereinafter referred to as Section B) was sold to Chan Yuen Foo. This is evidenced by Memorial No. 136436 Exhibit 6. The sale plan attached to the Memorial showed that it has a base of 71 feet adjoining Section A and the sides east and west of 62 ½ feet giving an approximate area of 4,437.5 square feet. 11. On the 22nd of July 1956 Madam Lee sold to the 1st defendant the remaining bit of the northern part of the remaining portion (hereinafter referred to now as the remaining portion) - see Exhibit 5, Memorial No. 138176. The sale plan attached thereto shows a base of 71 feet adjoining the northern boundary of Section B and the sides east and west of 62 ½ feet giving the approximate area of also 4,436.5 square feet. 12. Section B was subsequently re-sold by the executrix of Chan Yuen Foo to one Chan Yen Ling and Chan Wai Ling on the 28th of June 1965 - Exhibit C7. 13. Later, Section B was sold by Chan Yen Ling and Chan Wai Ling to the plaintiffs on the 13/8/70 and completion took place on the 14/9/70. Then on the 20th of July 1970 the 1st defendant contracted to sell the remaining portion to the 2nd defendant. 14. Pausing at this stage, it is pertinent to observe that by 1956, that is, four years after the original sale by auction the Conditions of Sale had been complied with. There should have been a survey and a Crown Lease issued. However, nothing was done. There is no evidence as to who was responsible for the delay. The 1st defendant completed his house on the remaining portion some time in the month of June 1959. This is evidenced because on the 18th of June 1959 there is a letter signed by the District Officer, Tai Po, and addressed to Mr. Li Fook Hon, the architect of the house in the remaining portion as well as to David See Chai Lam, the 1st defendant, in the following terms:-
and there was a postscript in the following terms:-
15. The 1st defendant promptly applied for a Crown Lease on the 13th of July 1959. In his letter addressed to the District Officer, Tai Po, he said:-
16. Apparently, nothing was done to survey the site Lot 535 for the purpose of issuing a Crown Lease. There is certainly no evidence addressed before me as to any step taken for that purpose except a letter dated the 15th of October 1964 addressed to the 1st defendant by the Crown Lands and Surveys Office. The letter is in the following terms:-
17. The reply by the 1st defendant to the Crown Lands and Surveys Office is as follows:-
18. In short, as we know now and supported by the aforesaid letters Exhibit A3 and Exhibit A4 respectively, no survey was done at all for the purposes of fixing the boundaries of Lot 535 despite that postscript in a letter signed by a District Officer dated the 18th of June 1959. 19. Coming back to the history of Lot 535, it will be observed that no survey was done to Lot 535 at all until October 1970 when the plaintiffs acquired Section B and applied for a survey. A survey was completed on the 22nd of December 1970. As a result the plan was completed in the form of Exhibit B9. By that time, it is shown that the shape of Lot 535 is that of a parallelogram instead of a rectangle which was a shape taken for granted by all parties. 20. Mr. Harland in his evidence for the plaintiff said that a Crown Lease could only be issued after a proper survey and the boundary of the lot determined. But up to date no Crown Lease has been issued in respect of Lot 535. Had there been a proper survey in 1954/55 or even in the year of 1959 as it was requested by the 1st defendant the parties will have been fully aware of their respective rights. The architect of the remaining portion never insisted that a Crown Lease be issued and indeed had not even asked for a survey. The 1st defendant asked for a Crown Lease in respect of Lot 535 remaining portion but none was given to him and no proper survey was conducted. However, he was generaous enough to praise the officer of the Crowns and Surveys Department in complimentary terms about the on-site discussion and suggested orientation of a boundary line between Lots 562 and 535. Indeed, I say that the 1st defendant was complacent because after all the meetings and site visits he never had what he originally applied for namely a Crown Lease for Lot 535 R.P. Had the New Territories Administration been efficient in their work and complied with the request of the 1st defendant in his letter dated the 13th of July 1959 Exhibit A2, a proper survey would have been conducted in that year to be followed by the issue of the Crown Lease. This would have determined the shape of Lot 535 or even the part of the shape of Lot 535. Had the 1st defendant been less complacent he would have insisted on a proper survey being conducted in 1959 and the shape of Lot 535 would have been finally determined following by the issue of a Crown Lease. 21. Had either of these events taken place, there should be no dispute as to the shape of Lot 535. As it stands, no survey had been done until after 18 years Lot 535 had been sold and after 16 years the first house on that Lot had been built. It is 20 years since the date of the auction and a Crown Lease had not been issued. This long delay is the basic reason for the present litigation. 22. The gravemen of the plaintiff's complaint is that the shape of Lot 535 should be in the form of the parallelogram as shown in Exhibit B9 and not a rectangle. On this basis the shape of Section A, Section B and the remaining portion of Lot 535 should all take the shape of a parallelogram as shown in Exhibit B9. It is the plaintiff's contention that the 1st and 2nd defendants as the equitable owner and the contractual purchaser respectively of the remaining portion of Lot 535 had encroached upon a strip of land on the north eastern corner of Section B to the extent of about 500 odd square feet as shown coloured pink and hatched in black in the plan attached to the Statement of Claim. The reason for the plaintiff's contention is that in 1959 the 1st defendant built a wall and some structure along that line from the west to the east on the southern boundary of the remaining portion near the line drawn between the points C2 and A1 as shown in Exhibit B9. 23. Further, and in the alternative, the plaintiff contends that if the shape of Lot 535 were that of a rectangle then the owner of Section A, namely, the 3rd defendants had encroached upon the southern border of Section B to the same extent as shown and coloured pink and crossed hatched black in a plan attached to the Statement of Claim. At the close of the evidence the plaintiff applied for leave to withdraw their claim against the 3rd defendant with no order as to costs. This appears to be inevitable in view of the fact that the only evidence adduced by the plaintiff was that the shape of Lot 535 should be that of a parallelogram as shown in Exhibit B9. The defence of the 1st and 2nd defendant is that they deny the shape of Lot 535 as that of a parallelogram. They contend that there had been no wrongful act on the part of the 1st defendant because the wall was built on the assumption that the site was a rectangle and that the southern wall was perpendicular from west to east. Further, when the wall was built in 1959 there was no protest from the predecessor in title of the plaintiff. It is the 1st and 2nd defendant's contention that there had been acquiescence and laches on the part of the plaintiff's predecessor in title and that binds the plaintiff as well. They further contend that on the balance of convenience and justice there should be no equitable relief in the form of a mandatory injunction. On the question of damages the 1st defendant allege that he did what was in the common belief that he was right and therefore all the plaintiff's would be entitled to are nominal damages even if the plaintiff's had proved their case. 24. In view of the pleadings, the issues before me are as follows:-
25. With reference to the 1st issue, it will be observed that no proper survey had been conducted by any proper authority until November/December 1970. By this time two boundary stones marking the northern border of Lot No.524 a plot of land immediately adjoining the southern border of Lot 535 had been laid. 26. Further, a house on the southern sub-division known as Section A of Lot 535 and owned by the 3rd defendants as well as another house on the northern sub-division known as the remaining portion of Lot 535 had been built. The plaintiff's land known as Section B of Lot 535 is right in the middle of the two sub-divisions, Section A and the remaining portion. Thus at the time of the survey in 1970 the surveyor, Mr. Hau King Chee, was presented with a fait accompli when he was asked to plot out the dimension of Lot 535. For the purposes of his survey he had the data supplied to him by the District Office, Tai Po, as to the length, the width and the approximate area of this Lot 535. All he could do was to use the two aforesaid boundary stones marking the southern and the northern boundaries of the two adjoining lot namely, Lot 535 and Lot 524 respectively. 27. Starting with the boundary stone marked C in Exhibit B9, he plotted a straight line between point C and the other boundary stone marked BS on Exhibit B9. Again, using point C as a pivot, he plotted a straight line in the north westerly direction to the length of a hundred and 90 feet between the frontage of the structures in Lot 535 and a public road known as King Hau Road thereby obtaining a point D in Exhibit B9. The line CD in Exhibit B9 then form a western boundary of Lot 535. Then from the line CD, he plotted a perpendicular line to CD eastward to the length of 71 feet thereby he obtained the point marked B on the line between point C and BS. From that point B, he plotted a straight line parallel to the line CD to the length of 190 feet. Thus he could determine, by his survey, the four corners of Lot 535 are in a position of ABC and D as shown and coloured pink in Exhibit B9. It now shows that the lot is in the shape of a parallelogram and gives a correct total area of 13,490 square feet approximately. 28. Although the District Commissioner is not concerned with the sub-divisions within Lot 535 yet certain measurements were taken of some points chosen at random. Four of these points are significant, namely point A1 and A2 along the line AB, C1 and C2 along the line CD. The distance between A to A1 is approximately 80 feet and that between D and C2 is approximately 70 feet. On Exhibit B9 there is a thin line indicating the southern wall of the remaining portion built in 1959. The eastern end of this wall is about 3 feet north of the point A1 and the western end of the same wall is about 8 feet from north of the point C2. Thus the eastern and the western ends of the southern wall of the remaining portion adjoining Section B are 77 feet on 62 feet respectively from the point A and point D. If the line AD were accepted as the northern boundary of Lot 535 and consequently the northern boundary of the remaining portion of Lot 535 then the total area now occupied by the 1st defendant on the remaining portion is approximately 4,935 square feet. However, according to the assignment in Exhibit C5 the 1st defendant is only entitled to a total area of approximately 4,437.5 square feet. Further, the east and west boundaries of the remaining portion, according to Exhibit C5, should be 62.5 feet each in length and not 77 feet and 62 feet respectively. 29. Again, on Exhibit B9, there is another line from the point C1 to A2 indicating a wall from west to east dividing the two subdivisions Section A and Section B of Lot 535. The distances between point B point A2 as well as that between point C and point C1 are both 65 feet long. A line from B perpendicular to western line of CD is 71 feet long. This gives the area of Section A, as bounded by the line drawn between point A2, point B, point C and C1, as approximately 4,615 square feet - a correct area supported by the instrument of assignment Exhibit C3 and an area that the 3rd defendants are entitled. Thus if Exhibit B9 were accepted as giving the correct dimensions and adopted as the site plan in the Crown lease to be issued to the plaintiff and the defendants, the following facts are established:-
30. According to the evidence of Jacob Wong, Architect, and another witness called by the plaintiff, Section D is short of 514 square feet in area. However, this is not of great significance in principle. Measurements are subject to marginal errors and at this stage I am considering the shape of Lot 535. The plaintiff relying on Exhibit B9 which is incorporated in a plan attached to the Statement of Claim allege that there has been an encroachment by the 1st defendant to their property to the extent of 497.5 square feet or 514.5 square feet of their property. The plan attached to the Statement of Claim show that the eastern boundary of the remaining portion extend to 77 feet instead of 62.5 feet. As I have said before and I repeat again up to date no boundary stones has been laid at the points A and D of Exhibit B9. Mr. Hau King Chee, the witness, who conducted the survey and prepared Exhibit B9 said that the setting out marks on points A and D were put in accordance with the materials and information supplied by the District Office, Tai Po and that once a setting out mark was put the boundary was final. But he also said that the boundary stones were to indicate the final determination of the boundary of a lot. In cross-examination he failed to give any reasons why the boundary stones were necessary in addition to setting-out marks. Perhaps the evidence of Mr. Anthony John Harland, Senior Estate Surveyor, District Office, Tai Po gives the explanation. He says that when there is an application for a Crown lease he will check the application and then refer the matter to the Crown Land and Surveys Division of the District Commission. Then a survey of the site will be done by the Crown Land and Survey Division. If after the survey, any discrepancy is found between the original sale plan and the proposed Crown lease plan, normally the differences will be settled by negotiation between the Crown and the Crown lessee. It is only after agreement between the Crown and the Crown lessee is reached then a Crown lease plan will be drawn up, boundary stones will then be set up in accordance with the agreed boundary or agreed plan, a Crown lease will be issued. Thus the setting-out marks referred to by Mr. Hau King Chee are really the basic points for the preparation of a setting-out plan for reference in drawing out a Crown lease plan. If the setting-out plan is different from the original sales plan then the differences are to be solved by a process of negotiation. Indeed, Mr. Harland says that in order to decide whether an encroachment on Crown land, and I repeat Crown land, has occurred he would refer to Exhibit B9. Mr. Harland also says that he is not concerned with any encroachment between one sub-division to another of the same lot. He says that before the issue of the Crown lease he will also consult Exhibit B9 in the present case. In cross-examination, however, Mr. Harland concedes that there had been no negotiation between the first or second defendant with the Crown as to the shape of Lot 535. He further concedes that in the contractual relations between the Crown and Crown lessee in this agreement there is still room for negotiation and that up to date no one can say with certainty as to what shape Lot 535 should take. Finally he says that it has not been decided that the shape of Lot 535 should be a parallelogram. The plan, Exhibit B9, is only a set-out plan. 31. In view of the evidence the following facts are established:
32. Up to date, some twenty years after the original sale, no Crown lease has been issued to any Crown lessee involved in Lot 535. In short, the shape of Lot 535 to date, has not been finally determined. On these facts, Mr. Mills-Owens for the first and second defendants contends that there has been no binding agreement relating to the shape of Lot 535 that it should be a parallelogram. There is certainly room for negotiation and without determining that the shape of Lot 535 it is impossible to say that the first defendant had encroached upon the plaintiff's land. Mr. Gittins, for the plaintiff, however, contends that the shape of the Lot 535 had already been determined by the Crown: Exhibit B9 is the only accurate plan for Lot 535, there is certainly no alternative proposal by either the first or the second defendant as to what shape the Lot 535 can take, and a parallelogram is the only practical shape that the lot can take. 33. Having regard to the evidence, particularly the evidence of Mr. Harland, before me I am of the opinion that there is force in Mr. Mills-Owens' argument. In this connection it may be significant to repeat Clause 14 of the Conditions of Sale. It provides that the exact area, boundaries and measurements of each lot shall be determined before the issue of the Crown lease, and the premium and Crown rent shall be when adjusted in accordance with the area and the amount of premium and Crown rent at which the lot was sold. Thus at the fall of the hammer, in the auction sale of Lot 535 in 1952 the so-called binding contract between the Crown and the successful bidder, the Edinburgh Hotel Ltd., was no more than an agreement to agree on the exact area, boundaries and measurement of such lot. 34. In the present case there was certainly a discrepancy regarding the shape of Lot 535 between the original sale plan and the proposed plan by the Crown. The final determination of the shape depends on negotiation between the Crown and the Crown lessee. Hitherto, there has been no negotiation and no finality as to the shape of this lot. There is no certainty as to what would happen after negotiation between the parties. I have no jurisdiction to decide for the parties as to what they may or may not agree, nor do I want to usurp the function of the New Territories Administration or propose to guess what the parties will agree. If the issue of a Crown lease could be delayed for a matter of some twenty years any conjecture as to the future is futile. 35. It is said that equity looks upon that as done which ought to be done or which is agreed to be done. But the maxim does not extend to things which might have been done nor will equity apply in favour of everybody but only those who have a right to pray that the thing should be done. Thus, where the obligation arises from contracts, what ought to be done is only treated as done in favour of some persons entitled to enforce the contract against the person liable to perform it. The true meaning of the maxim is that equity will treat the subject matter as to colateral consequences and incidents in the same manner as if the final acts contemplated by the parties had been done exactly as they ought to have been, but the contract itself is not valid. The doctrine does not make for the parties' contract different from those they have made for themselves. (See Vol.14 Halsbury's Laws of England, 3rd Edition Para. 1001). 36. Here the contract between the Crown and the Crown Lessee is that the measurements, boundaries and area of Lot 535 are to be determined before the issue of a Crown lease and the way to determine them is by negotiation. Such acts depend upon the parties to the contract and it is not for this court to spell out a contract for them. 37. There is something more than that. The legal estate of Lot 535 does not vest in the lessees until a Crown lease has been issued. At the fall of the hammer Hotel Edinburgh Limited was an equitable owner. They sub-sold to different persons who cannot have a better title than the original holder. Thus the plaintiffs and all the defendants have nearly an equitable interests as tenants in common in indivisible shares relating to the respective areas of Lot 535. The Crown is not concerned with sub-divisions within any lot of Crown land. It appears, therefore, that while each of the sub-purchasers of Edinburgh Hotel Limited may apply for a separate Crown lease yet any negotiation regarding the shape of Lot 535 as a whole requires the concerted action or agreement of all the Crown lessees. Up to now the plaintiffs have not applied for a Crown lease. Even if the plaintiffs had applied for one and applied the setting out plan in Exhibit B9 as the standard for the shape of Lot 535, one can well imagine that the first and second defendants will object to the adoption of Exhibit B9. In this way we are thrown back to negotiation between the Crown and the Crown lessees and we are back where we started. It is also for this reason that I say that I am not prepared to usurp the functions of the parties to the agreement. 38. For the aforesaid reasons, I feel that the action is premature and the plaintiff fails to establish that the shape of Lot 535 should be that of a parallelogram. Unless and until the shape of Lot 535 has been finally determined to be that of a parallelogram the plaintiff will fail on their own evidence to prove that there had been any encroachment and their action must be dismissed. That disposes of this action. 39. Once the answer to the first issue is in the negative the other issues are purely academic. However, evidence has been adduced and arguments directed to the various measurements in the subdivisions of Lot 535 and the damages suffered by the plaintiff. In deference to counsel's efforts and in the event that I am wrong, I would like briefly to refer to the other issues as well. 40. On the issue whether there is any encroachment on the part of the first defendants to Section B I do not have to consider the point whether Lot 535 should take the shape of a rectangle. The action against the third defendant has been withdrawn. If the shape of Lot 535 is definitely that of a parallelogram, it is obvious that there has been an encorachment upon the plaintiff's land in Section B. The encroachment can be easily worked out to be in the proximity of five hundred square feet. No less than three persons have worked out a measurement on the survey, namely Mr. Hau King Chee, Mr. Jacob Wong and Mr. David Anthony Bailey. Mr. Hau and Mr. Wong did their computation on the basis of Exhibit B9. They both came to the conclusion that the eastern boundary of the remaining portion, that is from Point A in Exhibit B9 to the wall is approximately 77 feet and that the western boundary of the remaining portion from Point D in Exhibit B9 to the wall is approximately 62 feet. Mr. Bailey used a tape measure and other instruments. The result of his measurements was that the eastern boundary of the remaining portion is approximately 77 feet 2 inches and the western boundary of the remaining portion is approximately 62 feet 4 ½ inches. Such measurements have not been successfully challenged, nor is there any evidence of other measurements adduced by the defendants. I have no doubt as to their accuracy. The actual extent of the encroachment can well be worked out by comparing these measurements with the measurements contained in the various deeds of assignment. 41. This leads me to consider further as to the proper remedies I should grant on the basis of the existence of such encroachment. For the first and second defendants, Mr. Mills-Owens contends that the predecessor in title of the plaintiffs had been guilty of laches and acquiescence. It is further contended that such conduct will bar the plaintiffs as successor in title to any equitable remedy even if there had been encroachments. The basis for this contention is that it was as long ago as 1959 that the wall between the remaining portion and Section B was built. No action was taken and no protest was made by the plaintiff's predecessor in title. As a result, the 1st defendant was led to believe that he was entitled to occupy that portion of the land in Section B which is now the subject matter of this action. A large number of authorities have been cited in support of this proposition, but I do not think that it is necessary to refer to all of them in detail. 42. In a case of Gaskin v. Balls 13 Ch.324 an order of injunction was refused to be extended to a house which had been allowed to remain for 5 years without any complaint. In that case, there was acquiescence on the part of the plaintiff or the plaintiff's predecessor in title who knew of the building covenant restricting the building of the house beyond a certain line. 43. In the case of Young v. Star Omnibus Co. Ltd. 86 Law Times 41 the plaintiff had knowledge of his right of way at the time the building was erected. Further there was no material damage and as a result an injunction was refused. 44. In a case of Shepherd Homes Ltd. v. Sandham 1970 3 W.L.R.348 an interim injunction was refused because the action for an injunction had commenced four months before the application for an interim injunction was made. Therefore laches on the part of the plaintiff. 45. In the case of Inwards v. Baker 1965 2 Q.B.29 an injunction sought by the plaintiff was refused because the plaintiff's predecessor in title gave permission to the defendant to build a house upon the land with full knowledge of the former's right and thereby induced the defendant to spend money in building the house under the impression that he would be allowed to live in the house as long as the defendant wished. Similarly, the case of Watt v. Curtland 1967 1 Ch.194 and E.R. Ives Investment Ltd. v. High 1967 2 Q.B.379 was decided on the same basis that the act done by the defendant was induced by the plaintiff or the plaintiff's predecessor in title with full knowledge of his own right and the concession. All these authorities go to show that be it acquiescence or laches they imply a knowledge of the encroachment on the part of the person who seeks the mandatory injunction. Thus in 14 Halsbury Laws of England 638 at para.1177 the meaning of the term of acquiescence is described. It says that:
46. In the present case, there is no evidence that either the plaintiff or the plaintiff's precedessor has any knowledge that the shape of Lot 535 is to be in the form of a parallelogram. If the shape of the lot is not in the form of a parallelogram, then there would have been no encroachment on the part of the 1st or 2nd defendant. The only indication that the shape of a lot might be in the form of a parallelogram did not arrive until 1970. Indeed, the evidence indicated that everybody took for granted that site was in the shape of a rectangle up to then. Indeed, to impute a such knowledge to the plaintiff or the plaintiff's predecessor amount to expecting the plaintiff to knowing the state of affairs which I do not know even now. 47. As soon as the plaintiff suspected that the shape is to be in the form of a parallelogram and therefore there has been encroachment on Section B they wrote to the 1st and the 2nd defendant about it and action was taken. For this reason, I hold that there was no acquiescence or laches on the part of the plaintiffs so as to bar them from any equitable remedy. But the absence of acquiescence and laches is not the only consideration. 48. In deciding whether equitable remedies should be granted, there are other factors such as the balance of convenience and whether the plaintiff can be adequately compensated by monetary damages. On the question whether damages is adequate compensation I am of opinion that clearly the plaintiff cannot be compensated by money in the damages the plaintiff suffered. 49. On the basis that the plaintiffs be given the adequate amount of land as the plaintiffs are entitled, three units of housing project may be built. If the encroachment is allowed to stand, then all the plaintiffs can build in their project is a 2-unit housing. Taking into consideration the Crown lease having some long years to run and the rise of the property market, I find it impossible to say that the plaintiff's damages by such a difference in units can be adequately compensated by even a substantial sum of money. It is obviously inconvenient for the 1st defendant to have to demolish the out houses, water tanks, septic tank and steps. However, I have visited the site and I can see that there are a lot of Crown land available beyond the eastern boundary at the rear of the remaining portion. Further, Crown land is available near and adjacent to the northern boundary of the remaining portion. These out-buildings and tanks can be diverted further down the slope towards and beyond the eastern boundary, provided the New Territories Administration is prepared to rectify the mistake by granting to the first defendant a little bit more of the Crown land. Alternatively, there can be room for extension towards the northern boundary. 50. Comparing the inconvenience to be suffered by either party, I am of opinion that the balance is in the plaintiffs' favour. It follows that if I have to decide that the shape of Lot 535 should be a parallelogram and therefore sub-division s.B and the remaining portion I would have come to the conclusion that there had been an encroachment on the part of the 1st and 2nd defendants. That being so, I would not hesitate to grant a mandatory injunction requiring the first and second defendants to remove the encroaching structures on s.B. 51. But the plaintiff's claim does not rest on the mandatory injunction. The plaintiff claims that they are entitled to damages for the delay of the building project caused them by the conduct of the 1st and 2nd defendants. On this issue I have to look at the plaintiffs' conduct as well. The plaintiff entered into an agreement of sale with their predecessor in title some time in the middle of August. The completion did not take place until the middle of September. There is evidence that the architect of the plaintiff, Mr. Jacob Wong, had surveyed the site some time near the end of August. Indeed he drew a plan to scale and he knew, or he should have known, at that time s.B was not in the shape of a parallelogram. He knew that something was wrong, or he ought to know, that something was wrong. This knowledge can be imputed to the officers of the plaintiff company. Once they knew, they should not have gone on with the completion of the transaction. Mr. Jacob Wong frankly admitted that having found that there had been an encroachment upon s.B he was expecting the encroaching party to rectify the position. There is, of course, nothing wrong in this form of expectation. He is certainly entitled to expect a grievance to be rectified, and a wrong to be put right. However, as a reasonable and prudent man he should have expected that even rectification takes time. He is not to expect the defendants to submit to his demand without any dispute whatever, particularly in view of the uncertainty of the shape of Lot 535. A limited company can only act through its agents and officers and the knowledge of the agent must be imputed to the knowledge of the plaintiff company. 52. I do not think that I am being unfair to the plaintiff when I say that some of their directors are solicitors and solicitor's clerks and they must have received a report from Mr. Jacob Wong and had the benefit of his professional knowledge and advice and to have received a copy of the plan of his survey in August 1970. Thus before completion they knew that there was something wrong with this site and some time would have to be spent in having the proper rectification. Nonetheless they decided to go on with the completion. In short, they were hoping that the rectification would come sooner, they were speculating and they have brought upon themselves a law suit. If a mandatory injunction were to issue they would have the position rectified. 53. I do not feel that they can justifiably complain for the delay. They should have expected that. On the claim for damages I would have granted a nominal damage only. If I am wrong in this decision then some inquiry would have to be made to work out the proper damages that the plaintiffs are entitled. 54. In conclusion, and in short, I find that this action is premature and must be dismissed, because I cannot find with certainty that the shape of Lot 535 should be in the form of a parallelogram. If there is no parallelogram there is no encroachment. However, if I am wrong in holding that I am not certain as to the shape of Lot 535 then I have to hold that there has been an encroachment and the plaintiff is entitled to a mandatory injunction for the removal of the structures that had been erected upon the encroached land in s.B. The plaintiffs, for reasons I have given, are not entitled to any substantial damage other than a nominal damage for the delay in rectifying the position. 55. In view of the aforesaid, the action by the plaintiff is therefore dismissed with costs.
Representation: Gittins, Q.C. and Denis Chang (Peter Mark and Co.) for plaintiff R. Mills-Owens (J.S.M.) for 1st and 2nd defendants Robert Tang (K.Y. Woo and Co.) for 3rd defendant. |