Asia All Parts Distributor Corporation v. Tom Lee Music Co Ltd

HCA 2379/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2379 OF 2004

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BETWEEN

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Before: Deputy High Court Judge Saunders in Chambers

Date of Hearing: 23 March 2005

Date of handing down Judgment: 4 April 2005

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J U D G M E N T

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1.The Defendant company, (Tom Lee Music), is well-known, having operated music stores in Hong Kong since the early 1950’s.  Since 1965, Tom Lee Music has occupied premises at No. 521, Hennessy Road Wanchai, (No. 521), owned by Stonehenge Limited, (Stonehenge), Tom Lee Music and Stonehenge, both being family companies of Mr Thomas Lee Tse Ven. 

2.In 1965, after Stonehenge purchased the shop at No. 521, and it was occupied by Tom Lee Music, a signboard was established on the exterior of No. 521, advertising the presence of Tom Lee Music.  In order to support the sign, horizontal bracings and tension wires from the sign to anchor bolts and brackets, were placed on the adjacent building, No. 519 Hennessy Road Wanchai, (No. 519).  In 2001, Tom Lee Music replaced the sign on No. 521.  New anchor points were established for the bracing and tension wires, and the old anchor points on No. 519 from then on became no longer in use.  However, at least three new anchor points were established on No. 519.

3.The sign is substantial, weighing in excess of 2½ tons and the measuring 6.5 metres wide, and 5.5 metres high.  It is not in dispute that the original signboard, and the subsequent signboard that replaced it, are both unauthorised building works, no permission having been given for their erection by the Building Authority pursuant to the provisions of the Buildings Ordinance Cap 123.

4.As a result of an inspection undertaken in early 2004, the Building Authority has issued a noticed requiring the demolition of the sign, and the reinstatement of the building in accordance with plans approved by the Building Authority.  An appeal has been lodged against that decision to the Appeal Tribunal (Buildings).  The appeal has yet to be determined. 

5.It is relevant to note that the whole of exterior wall of the building at No. 519 has now been demolished, save for that small portion of the wall upon which the present anchor points for the sign are, that location being directly adjacent to the exterior wall of No. 521.  I am also informed from the bar, although it is difficult to comprehend, that the whole of the exterior wall of No. 521 has been demolished, above the 1^st floor level, again save for that portion of the wall to which the sign is affixed.  Apparently the resolution of this and other litigation is required before the whole of the wall on both buildings can be demolished. 

6.According to the Statement of Claim, the Plaintiff is the owner of all of No. 519.  A company associated with the Plaintiff, Dragonland Limited, is said to be the owner of No. 521 save for the ground floor, owned by Stonehenge.

7.The Plaintiff in these proceedings, and Dragonland Limited, both claim their title to the respect of the buildings by way of the exercise of rights under a legal charge given by a company, Revodoor Hong Kong Limited, (Revodoor), which was apparently previously the owner of both buildings.  The Plaintiff and Dragonland are said to have taken title by a surrender of Revodoor’s rights in favour of the charge holders, the Plaintiff and Dragonland, by written notice in April 1999. 

8.The Plaintiff now asserts that the anchor brackets and boltsused for the horizontal bracing of the signboard constitute trespassing items which are annexed to the external wall of No. 519 without the consent of the Plaintiff.  The Plaintiff accordingly requires the removal of those items.  The Plaintiff seeks summary judgment by way of a declaration that Tom Lee Music has trespassed on the Plaintiff’s property at No. 519 and has caused nuisance or annoyance to the Plaintiff’s use, occupation and enjoyment of No. 519 including the external wall, and orders that Tom Lee Music remove the trespassing items and the anchor brackets and horizontal bracings. 

9.To resist summary judgment under Order 14, a defendant must satisfy the court that it has a fair and reasonable probability of showing a real or bona fide defence.  In the course of determining the matter, the court will determine disputed points of law provided the relevant facts are not in dispute.  Tom Lee Music has raised a number of defences.

10.First, they challenge the Plaintiff’s title to the land.  Tom Lee Music says that in HCA No. 11181 of 1999, First Pacific Bank Limited has brought proceedings against the Plaintiff in which it seeks an order that the disposition to the Plaintiff of the property at No. 519 be set aside, being a disposition of property by Revodoor with intent to defraud its creditors.  By this pleading, Tom Lee Music sets up a defence of jus tertii.  The Plaintiff does not respond to this pleading in the evidence.  In that circumstance, Tom Lee Music relies on the maxim omnia praesumuntur contra spoliatorem,as explained in Tullett and Tokyo International Securities Ltd v APC Securities Co. Ltd [2001] 2 HKC 713 at 723.

11.Mr Lawrence Ng for the Plaintiff says that it is simply not necessary for his client to give any evidence about the matter because Tom Lee Music is not entitled to set up the defence of jus tertii.  The usual circumstance in which a jus tertii is set up is when one sues another for money, and that other asserts that the money does not in fact belong to the first who has sued, but to some other.  It is well settled that in an action for trespass a defendant may not to set up a jus tertii: see Nicholas v Ely Beet Sugar Factory [1931] 2 Ch. 84 at 86.  The rule is described in Clerk & Lindsell on Torts, 18^th ed., para. 18-14, in the following terms:

“A de facto possession gives a right to retain the possession and undisturbed enjoyment as against all wrongdoers. 

He who has such a possession may, just as may the lawful owner, use a reasonable degree of force in its defence.  He may sue in trespass anyone who disturbs his possession, and in such an action it is no answer for the defendant to show that the title and right to possession is in another person, jus tertii is no defence to the action unless the defendant can show that the action was done with the authority of the true owner.  Nor does it matter how recently possession was acquired”

12.In response to this, Mr Kwok makes two points.  First, he says that the fact of possession requires physical possession and not mere ownership, and that the Plaintiff was not in physical possession of the property as it had been let to a tenant.  That cannot be right.  If the property is let to a tenant, the de facto owner will be entitled to the rent, it is not necessary that he actually physically occupy the land.  Second, Mr Kwok says that the rule cannot apply to one who has obtained possession of the land by way of fraud, as may be the case here.  But equally that cannot be right, for a de facto possession amounts to nothing more than “possession in fact” and not possession in law.  If the Plaintiff is in fact in possession, no matter how he got there, he is at law entitled to bring proceedings to eject a trespasser and a jus tertii is no defence to the action.  That being the case, I do not need to consider the applicability of the maxim omnia praesumuntur. Any defence based upon a challenge to the Plaintiff’s title to No. 519 must fail.

13.The next basis upon which Tom Lee Music asserts a defence is by way of adverse possession.  The evidence establishes, and I do not believe it to be in dispute, that Tom Lee Music has used the exterior wall of No. 519 for mounting anchor bolts to support the signboard since 1965.  It is equally not in dispute that in 2001, it ceased to use the anchor bolts then in use, and the fixed new brackets and bolts, also on the external wall, to support the signboard.  In the draft defence it is asserted in paragraph 13:

“By virtue of section 7(2) of the Limitation Ordinance (Cap. 347), the Plaintiff’s title to the material part of the walls (if any) derived through its predecessors in title has been extinguished before the commencement of this action.”

14.Insofar as the pleading is one which appears to assert that the wall, or at least the points at which the anchors and bolts existed, have become the lawful property of Tom Lee Music consequent upon adverse possession, pursuant to the provisions of the Limitation Ordinance, the proposition must be wrong.  It simply cannot be, that the mere fixing of bolts to a wall for a period of time, would result in title to the whole of the wall going to the person who fixed the bolts to the wall.   No authority was suggested for the proposition that there could somehow be a separate title for those points of the wall at which the bolts were inserted.  The pleading is based upon a fundamental misunderstanding of the concept of title by adverse possession.

15.However, it is clear that an easement may be obtained by prescription, or by the doctrine of lost modern grant.  That plea is made in paragraph 19 of the intended defence.  Mr Ng was quite right in his contention that, an assertion by Mr Lee, the director of the Defendant, that, had there been a challenge to his affixing bolts to the wall in 1965, he would have defended his right to that action, would be an answer to a claim that the Plaintiff’s title was extinguished by adverse possession.  Such an assertion is an assertion that Tom Lee Music had a lawful right to fix and maintain the bolts to the wall of No. 519.  It is clear that for there to be adverse possession the claim must be “as of wrong”, not “as of right”:  see Wong Tak Yue v Kung Kwok Wai David & anther [1998] 1 HKC 1 at 13 and 14.  The assertion of such a right by Mr Lee is directly contrary to any claim pursuant to adverse possession.

16.But the position is quite different in respect of the establishment of an easement by prescription.  In order to support a prescriptive claim under the doctrine of prescription at common law the user or enjoyment of an alleged right, such as an easement must be shown to have been a user “as of right”:  Halsbury’s Laws of England, 4^th ed., volume 14, para. 83.  User as of right is precisely what Mr. Lee asserts in his affidavit.

17.Running parallel with the doctrine of easement by prescription is the doctrine of lost modern grant.  Although somewhat uncomfortably and unfortunately literally pleaded, the matter is dealt with in paragraph 19 of the intended defence.

18.The fact that in 2001, Tom Lee Music ceased to use the specific mounting brackets and bolts that had been established in 1965, and established new ones, in different places on the wall, is a matter that calls into question the nature and terms of any prescriptive easement that may have been acquired.  That is an issue that must be determined by the court, under either the doctrine of easement by prescription or lost modern grant.  But that is plainly a matter for trial.

19.I am satisfied that the Defendant has an arguable case based upon an easement by prescription, or lost modern grant, to resist the Plaintiff’s claim.  That being the case, I do not need to consider the other matter raised of the estoppel by convention.

20.Mr Ng argued further that, even if Tom Lee Music had an arguable case for equitable relief by way of easement by prescription or lost modern grant, then the fact that the signboard was an unauthorized building work was a complete answer to the matter as the court would not give its sanction to a breach of a statute.

21.While that submission by itself is correct, it does not reflect the reality in this situation.  In the first place, there is an appeal underway against the order requiring the removal of the sign.  If the appeal was successful and the order to remove the sign is set aside, then notwithstanding the fact that the work is unauthorized, the sign would be entitled to remain.  That must be a matter which the court would take into account in the exercise of its discretion to grant to the Plaintiff the equitable relief it seeks.

22.Even if the appeal is not successful, the whole general attitude of the Buildings Department to the enforcement of the rules in relation to such signboards, and particularly the lack of enforcement action, is also a matter relevant to the exercise of discretion.

23.I am accordingly satisfied that the Defendant has made out an arguable case for a defence and that the application for summary judgment must be dismissed.  There will be an order nisi that the Defendant’s costs on the application will be in the cause.

Mr Lawrence Ng, instructed by  Messrs Chan & Cheng, for the Plaintiff

Mr Tim Kwok, instructed by Messrs Kenneth C C Man & Co., for the Defendant