Wu Yim Kwong Kindwind v. Manhood Development Ltd

DCCJ 3839/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3839 OF 2012

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JUDGMENT

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Introduction

1.By this action, the plaintiff claims the possessory title of 2 lots of land in Sai Kung, namely, Lot 330 and 331 in Demarcation District (“DD”) 247 (“the disputed land”).

The disputed land and the surrounding lots

2.The disputed land is situated in Ho Chung, Sai Kung. Lot 330 has an area of about 123.10 square metres whereas Lot 331 has an area of about 160.90 square metres. Lot 330 is lying in the north of Lot 331. In between the 2 lots, there is a strip of government land.

3.It is the plaintiff’s evidence that he and members of his family own 6 lots of land which are on the south eastern side of the disputed land, namely, Lot 326, 334, 335, 336, Section A of Lot 337 and the Remaining Portion of Lot 337 in DD247.

4.For ease of reference, a Lot Index Plan of the area is annexed to this judgment.

The plaintiff’s case

5.The plaintiff claims the disputed land had been used and occupied by him and/or his representative(s)/tenant(s) who erected structure(s) and/or hoarding(s) to enclose the disputed land to the exclusion of others since about 1994.

The defendant’s case

6.The defence case is simple. It denies that the plaintiff had been using or occupying the disputed land since 1994.  By relying on the aerial photographs of the disputed land, the defendant says that prior to June 2012, there was no hoarding around the whole perimeter of the disputed land. Also, prior to the middle of 2010, there was no structure on the disputed land.

7.The defendant also counterclaims for the costs wasted on 8 August 2012 in the sum of $35,000 because the plaintiff obstructed the clearance of the disputed land; the sum of $32,000 incurred on 17 November 2012 for the purpose of removing the hoardings placed on the disputed land by the plaintiff and loss of rent at the rate of $15,000 per month from October 2012.

Ownership of the disputed land

8.At one stage, the disputed land was owned by Mr Wu Yim Chung (“Wu YC”), the brother of the plaintiff. The following is the history of ownership of the disputed land since then:

Date	Owner
13/5/1988	Wu YC
21/12/1988	Formative Fair Investment Limited
2/3/1992	Yu King Kwok
8/4/2003	Kwong Shook Ling (as Executrix)
16/11/2011	Saturn Limited (“Saturn”)
30/7/2012	Manhood Development Limited (“the defendant”)

The issues

9.The issues for determination by this trail are the following :-

(1) Whether the plaintiff has acquired possession of the disputed land since 1994;

(2) If so, whether the plaintiff has the requisite intention to possess;

(3) Whether the defendant is entitled to the wasted costs of clearance in the sum of $35,000 on 8 August 2012;

(4) Whether the defendant is entitled to the costs of clearance in the sum of $32,000 incurred on 17 November 2012; and

(5) Whether the defendant is entitled to loss of rent at the rate of $15,000 per month from October 2012.

Legal principles on adverse possession

10.To establish adverse possession, the plaintiff must show to have both possession and the requisite intention to possess : see Wong Tak Yue v Kung Kwok Wai (No.2) (1997-98) 1 HKCFAR 55.

11.Section 7(2) of the Limitation (Amendment) Ordinance 1991 provides :-

“(2) No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person …”

12.Section 17 of the Limitation Ordinance provides for the legal consequence of not bringing an action within the limitation period :-

“Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

13.Slade J in the leading case of Powell v McFarlane (1977) 38 P & CR 452 at 470-471 usefully summarized the principle on possession :-

“Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. In the case of open land, absolute physical control is normally impracticable, if only because it is generally impossible to secure every part of a boundary so as to prevent intrusion. “What is a sufficient degree of sole possession and user must be measured according to an objective standard, related to no doubt to the nature and situation of the land involved but not subject to variation according to the resources or status of the claimants”: West Bank Estates Ltd v Arthur, per Lord Wilberforce. It is clearly settled that acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole. Whether or not acts of possession done on parts of an area establish title to the whole area must, however, be a matter of degree. It is impossible to generalise with any precision as to what acts will or will not suffice to evidence factual possession … Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.”

14.Likewise, His Lordship usefully summarized the principle on intention to possess, in its Latin tag, animus possidendi, in the following passage at 471-476 :-

“… What is really meant, in my judgment, is that the animus possidendi involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow … The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner … A number of cases illustrate the principle just stated and show how heavy an onus of proof falls on the person whose alleged possession originated in a trespass … In my judgment it is consistent with principle as well as authority that a person who originally entered another’s land as a trespasser, but later seeks to show that he has dispossessed the owner, should be required to adduce compelling evidence that he had the requisite animus possidendi in any case where his use of the land was equivocal, in the sense that it did not necessarily, by itself, betoken an intention on his part to claim the land as his own and exclude the true owner … I would add one further observation in relation to animus possidendi. Though past or present declarations as to his intentions, made by a person claiming that he had possession of land on a particular date, may provide compelling evidence that he did not have the requisite animus possidendi, in my judgment statements made by such a person, on giving oral evidence in court, to the effect that at a particular time he intended to take exclusive possession of the land, are of very little evidential value, because they are obviously easily capable of being merely self-serving, while at the same time they may be very difficult for the paper owner positively to refute.”

Limitation period

15.The plaintiff claims that he has acquired possession of the disputed land since 1994.  The relevant limitation period at the material time was 12 years.  There is no dispute between the parties on this issue.

The plaintiff’s application to amend the statement of claim and to elaborate on his witness statement

16.In the course of the plaintiff’s evidence-in-chief, Mr Wong for the plaintiff applied for amending the statement of claim to the effect that the occupation of the disputed land was from 1992 instead of 1994 and consequently for leave to allow the plaintiff to elaborate on his witness statement.

17.The applications were objected to by Mr Kwong for the defendant.

18.The applications were no doubt made at a very late stage.  The amendment application purported to change the plaintiff’s pleaded case substantially. The plaintiff was all along represented. Mr Wong appeared for the plaintiff at the pre-trial review (“PTR”). However, no such application was made by Mr Wong at the PTR. The defendant was caught by surprise by the application.

19.If the applications were allowed, the defendant should be allowed time to respond to the plaintiff’s newly pleaded case and fresh evidence. This would result in the adjournment of the trial, which is against the underlying objectives of the Civil Justice Reform.

20.The plaintiff’s applications were therefore refused.

Whether the plaintiff has acquired possession of the disputed land since 1994?

21.The plaintiff’s evidence is that after the sale of the disputed land by his brother in December 1988, he together with Wu YC purchased the Remaining Portion of Lot 337 in DD 247 in January 1989.  His family began to use the said piece of land together with the land adjacent thereto (namely, Lots 326, 334, 335, 336 and Section A of 337) which were owned by members of his family, to operate the business of open storage and garage.

22.The said business was expanding and more space was needed. Therefore, in about 1994, he cleared up the disputed land for the use of his family business as car park and temporary storage. Mesh fences and hoardings were erected to enclose the area of his business together with certain government land and the disputed land in order to protect the goods and materials stored thereon. In doing so, he did not obtain the consent of the then owner or owners nor making any payment.

23.In his evidence in court, the plaintiff said he rented out the disputed land to one Tai Fat Company (大發公司) (“Tai Fat”) in 1993 to 1994. In 1995 to 1996, the disputed land was for the use of his company for storing materials and the parking of cars. From 1997 to 2012, the disputed land was rented to one Mr Chow Yat Kwong (周日光) (“Chow”).

24.In relation to the findings of the joint land surveying expert, Mr Joseph YC Wong, on the historical aerial photographs, the plaintiff gave the following elaborations :-

Year	Expert’s findings	The plaintiff’s elaborations
1994	“The Suit Land” was vacant and parked with a few cars.	The cars belonged to his company. He enclosed Lots 330 and 331 together with the government land in between the 2 lots. He also paved a road on Lot 332 for people to walk past.
1995	Same findings as year 1994 photo.	The cars belonged to his company.
1996	Same findings as year 1994 photo.	Ditto
1997	Same findings as year 1993 photo except “the Suit Land” was fully parked with cars.	The cars belonged to his tenant Chow, Lee Loy Limited (利來有限公司) (“Lee Loy”)
1998	A sharp corner structure was seen inside Lot 330, but as half of this structure was hidden under the trees, it cannot be identified.	It was a canopy erected by Lee Loy, for repairing vehicles.
1999	Same findings as year 1998 photo except “the Suit Land” was parked with trucks.	The trucks belonged to Lee Loy.
2000	“The Suit Land” was left vacant with a few trucks parked by the north-eastern side. Fences were seen along “the Road” with a gate (“the Gate”) at the eastern entrance of “the Suit Land”. Alignment of “the Road” remained the same.	The trucks at the north-eastern side belonged to Lee Loy. He paved the vacant land with concrete at the request of Lee Loy. The fences were erected by his company. The gate at the eastern side was there before, which was built by him.
2001	Same findings as year 2000 photo except “the Suit Land” was fully vacant.	The customers had retrieved the cars from Lee Loy after repair.
2002	Same findings as year 2001 photo.	Ditto
2003	Same findings as year 2001 photo except a car and a container were seen at the south by the side of “the road” inside “the Suit Land”.	The car and container belonged to Lee Loy.
2004	“The Suit Land” was parked with cars and trucks. “The Gate” was not seen but the fences remained in the same locations. The alignment of “the Road” also remained the same.	Ditto
2005	The concrete area inside “the Suit Land” has expanded that the whole area became a concrete open area. The fences and the alignment of “the Road” remained the same.	The land was not expanded, just clearing up of the weeds.
2006	Same findings as year 2005 photo.	Nil
2007	Same findings as year 2005 photo. Besides, there appeared to be a new track (“the Track”) running around “the Suit Land” at its north.	“The Track” was built by Mr Fong Man Sang (“Fong”).
2008	Same findings as year 2007 photo and “the Track” was now clearly seen.	Agreed
2009	“The Track” was paved with concrete. The fences were replaced by new hoarding with a gate at the approximate location of “the Gate”. A container was seen at the western side of “the Suit Land”. A canopy was newly erected and there were a car and a truck parked underneath the canopy.	Fong paved the Track with concrete. His company replaced the fences with hoardings. The Canopy was erected by Lee Loy. The car and the container belonged to Lee Loy.
2010	“The Road” was blocked by hoarding. It appeared that “the Track” has replaced “the Road” as an access road to further west of “the Suit Land”. Conditions inside “the Suit Land” remained the same.	The Road was blocked by Fong. The Track was used as access road.
2011	Same findings as year 2010 photo.	Nil
2012	Same findings as year 2010 photo.	Nil
2013	“The Suit Land” together with “the Road” became a vacant site. “The Gate” and the hoarding along the southern side of “the Suit Land” were removed. Fences were erected in between “the Track” and “the Suit Land” with another gate erected at the western end of “the Suit Land”.	It was left vacant due to the 2012 incident.

25.The main thrust of the plaintiff’s case is that due to the expansion of his family’s business, in about 1994, he enclosed not only the land of his family where they did their storage and garage business, but also certain government land and the disputed land. The purpose of the fences and hoardings was to protect the goods and materials stored thereon.

26.As Walker LJ in Simpson v Fergus (1999) 79 P & CR 398 at 402 pointed out :-

“Possession is a legal concept which depends on the performance of overt acts, and not on intention (although intention is no doubt a necessary ingredient in the concept of adverse possession) … Actual occupation and enclosure by fencing is the clearest, and perhaps the most classic, way of establishing exclusive possession (though even enclosure is not invariably enough: see Marsden v Miller (1992) 64 P & CR 239.”

27.Therefore, if the plaintiff is able to establish this fact, he would have asserted exclusive possession of the disputed land.

28.At the first glance, the plaintiff seems to be saying that he included the disputed land into the province of his family’s business to accommodate the need of the expanding business.

29.However, as can be seen in paragraph 23 hereof, between 1994 and 2012, the plaintiff only made use of the disputed land for 2 years. For the remaining 16 years, the disputed land was for the use of the business of someone else, namely, Tai Fat and Lee Loy. The use of land for business and the use of land for lease are completely different in nature. The plaintiff is contradicting himself.

30.The plaintiff said in about 1994, he erected mesh fences and hoardings to enclose the land of his family where he did business together with certain government land and the disputed land. From the Lot Index Plan, it can be seen that Lots 324, 325, 332 and 333 are lying in between the land of the plaintiff’s family and the disputed land. It should be noted that Lot 332 was owned by Fong which he bought in 1987.

31.If what the plaintiff is saying is true, he must also have enclosed those lots into the province of his business, which did not belong to his family. But the plaintiff has not said so in his evidence.

32.Most importantly, according to the findings of the joint expert, the disputed land was neither enclosed independently nor together with the land of the plaintiff’s family in 1994. Fences were first identified from the aerial photograph of 2000 which was along “the Road” with a gate at the eastern entrance. “The Road” was on the southern boundary of Lot 331. According to the survey sheet prepared by the Lands Department, there were fences at the south of the disputed land in September 1999. Hence, the disputed land was not enclosed in the way as described by the plaintiff.

33.Lee Loy or Chow was named by the plaintiff as his tenant between 1997 and 2012. According to his evidence in court, Lee Loy was engaged in car repair business.

34.As a matter of fact, in December 2011 when Saturn became the owner of the disputed land, it was discovered that 6 vehicles which belonged to one Winson Professional Pest Control Co Ltd (“Winson”) were parked on the disputed land. Winson wrote to Saturn’s solicitors on 6 January 2012, saying that it was given to understand by its landlord that he or she had bought in land in the neighbourhood for years. Winson requested Saturn to engage land surveyor to identify the boundary of the lots. On 8 February 2012, the plaintiff wrote to Saturn’s solicitors, informing Saturn that Winson had moved out of the land complained of. The plaintiff further said that he had bought in land in the neighbourhood of the disputed land for years. He was informed of the land boundary by the previous owner. He requested Saturn to engage land surveyor to identify the land boundary of the lots.

35.As such, it is more likely than not that Winson parked the vehicles on the disputed land at the direction of its landlord, who was in fact the plaintiff. Further, the plaintiff regarded the parking area was the land that he bought in for years. Therefore, both the plaintiff and Winson requested Saturn to engage a land surveyor to mark the land boundary.

36.In cross-examination, it was put to the plaintiff that a container was placed on the disputed land by Winson for its use. The plaintiff whilst agreeing, explained that Lee Loy sublet the disputed land to Winson without his knowledge. Such answer was inconsistent with what was disclosed by the letters of Winson and the plaintiff to the solicitors of Saturn. I find his evidence not credible.

37.When the plaintiff was asked to show the Tenancy Agreement with Lee Loy, he replied that the Tenancy Agreement was in relation to Lot 334 but the tenant was allowed to use the disputed land and the rent for the disputed land was added to the rent for Lot 334.

38.As can be seen from the Lot Index Plan, Lot 334 is in the south eastern side of the disputed land with Lots 332, 326, 324 and 333 lying in between.

39.Firstly, I am in doubt if any tenant would have agreed to rent lots that were separated by other lots. This is particularly so because according to the plaintiff, the tenant, Lee Loy, was engaged in the car repair business and the disputed land was used by Lee Loy as such. According to the Lot Index Plan, Lot 334 was used for open storage, which is an entirely different type of land usage. If Lot 334 were let to Lee Loy for open storage, it is doubtful that it would want to rent the disputed land which could not be used as a whole with Lot 334. If Lee Loy was engaged in the car repair business, why would it want to rent Lot 334, which was larger in area compared to the disputed land and the land usage was totally different? The answers of the plaintiff have led to more doubts than certainties.

40.Secondly, even if the Tenancy Agreement were for the lease of Lot 334 and the disputed land, it must have to be expressly stated. I am in even greater doubt if the tenant (Lee Loy in this case) would have agreed to enter into such an agreement which is ambiguous and exposing it to an obvious disadvantage. I find the evidence of the plaintiff incredible.

41.As a footnote, it was not until questioned by this court as to the identity of the landlord that the plaintiff disclosed that his younger brother, Wu YC, was also one of the landlords. The plaintiff has not been forthcoming to tell the truth.

42.The plaintiff has on one hand claimed that he enclosed the disputed land in 1994, on the other, he also claimed that his company had erected fences as identified by the joint expert in the 2000 aerial photograph. If fences were already erected in 1994, the erection of fences 6 years later defies logic. Indeed, according to the survey sheet of the Lands Department prepared in September 1999, fences were already there along the south of the disputed land. The plaintiff has given me the impression that he was tailoring his evidence according to the findings of the joint expert. Similarly, the plaintiff’s claim that his company replaced the fences with hoardings in 2009 was a convenient way to suit his evidence to the expert’s findings.

43.Mr Lau Sai Fung was authorized both by Saturn and the defendant to look after the disputed land since December 2011.  His evidence was that soon after the authorization by Saturn, he discovered that 6 vehicles which belonged to Winson were parked on the disputed land. His evidence was not challenged by the plaintiff. Thus, taking the plaintiff’s case to the highest, he had allowed Winson to occupy the disputed land by parking vehicles thereon in December 2011. There is no evidence to suggest when Winson started to park its vehicles on the disputed land.

44.Having considered the evidence of the plaintiff, I find that he is not a truthful witness. I am not satisfied that he had dealt with the disputed land as he claimed. I am not satisfied that he had dealt with the disputed land as an occupying owner before Winson parked the vehicles thereon. Accordingly, I reject the plaintiff’s claim that he had acquired exclusive possession of the disputed land in about 1994. Further, I am not satisfied that the plaintiff had acquired exclusive possession of the disputed land for 12 years next before the commencement of the present action on 1 November 2012.

Whether the plaintiff has the requisite intention to possess?

45.In view of my findings at paragraph 44 hereof, the plaintiff’s claim must fail.

46.However, for completeness sake, I shall deal with the plaintiff’s intention to possess the disputed land.

47.In response to Saturn’s warning letters regarding the unlawful parking of vehicles on the disputed land, on 6 January 2012, Winson wrote to the solicitors of Saturn, saying that it was given to understand by its landlord that he or she had bought in land in the neighbourhood for years. Winson requested Saturn to engage land surveyor to identify the boundary of the lots. The same stand and request were repeated by the plaintiff in his letter to Saturn’s solicitors dated 8 February 2012. He further added that once the land boundary was identified, he would act according to the request of Saturn’s solicitors.

48.In other words, the plaintiff had taken the stand that he was not sure as to the boundary of the land that he had purchased for years. He was under the impression that the disputed land was within the boundary of the land that was owned by him as he was so informed by the previous owner. Obviously, the plaintiff was saying that he was only using his own land. Once it was confirmed by land surveyor that the disputed land was not within his own boundary, he was prepared to move out. As such, the plaintiff has not demonstrated an intention to exclude owner with paper title, namely, Saturn, at the material time. Apart from the fact that he had not claimed that he had already acquired possession, he had also not made it clear to the world at large (Winson and Saturn in particular) that he had the intention to possess the disputed land. The abrupt change in stand as shown in the letter from his solicitors dated 30 March 2012 to Saturn’s solicitors, in my view, could not reverse the position as demonstrated by his overt acts.

49.In my judgment, the letter of the plaintiff to Saturn’s solicitors dated 8 February 2012 was a statement as to his intention and such statement was against his interest. In the light of the speech of Li CJ in Wong Tak Yue v Kung Kwok Wai (No 2) (1997-98) 1 HKCFAR 55 at 69B, such statement of the plaintiff should be given considerable weight.

50.Fong, the shareholder and director of the defendant, testified that after the defendant became the owner of the disputed land, on 9 August 2012, he engaged workers to clear up the disputed land. One Madam Kan claimed to be the owner of the disputed land and that one of the hoardings belonged to her. The plaintiff in his witness statement was silent about the said Madam Kan. He only mentioned that the hoardings belonged to the plaintiff. In any event, he had not made it clear to Fong that he had acquired possession of the disputed land and that it was his intention to exclude the defendant.

51.For the above reasons, I find that the plaintiff did not have the requisite intention to possess the disputed land.

Whether the defendant is entitled to the wasted costs of clearance in the sum of $35,000 on 8 August 2012?

52.Paragraph 22 of the Defence and Counterclaim pleaded the following :-

“On 8^th August 2012, the Defendant instructed the said Fong Kee Removal and Demolition Co. Ltd. to clear the Suit Land at the costs of $35,000.00. The Plaintiff unlawfully obstructed the said clearance, with the result that clearance could not take place. The Defendant thereby suffered HK$35,000.00”

53.However, it is Fong’s evidence that on 9 August 2012 when he engaged workers to clear up the disputed land, one Madam Kan obstructed the work.

54.In such circumstances, even if the clearance was obstructed, it was by the said Madam Kan and not the plaintiff.

55.I do not accept that the plaintiff can be made liable for such wasted costs.

Whether the defendant is entitled to the costs of clearance in the sum of $32,000 incurred on 17 November 2012?

56.Paragraph 23 of the Defence and Counterclaim pleaded the following :-

“On or about 2^nd November 2012 and 3^rd November 2012, the Plaintiff has by himself or via his agents placed some hoardings on the Suit Land without the consent of the Defendant. The Defendant spent HK$32,000.00 on 17^th November 2012 to have those hoardings removed via Fong Kee Removal and Demolition Co. Ltd.”

57.In his witness statement, Fong stated that after the clearance of the disputed land on 1 November 2012, the plaintiff placed illegal objects thereon again.

58.No evidence was led to support the defendant’s case that it was the plaintiff who placed the illegal objects on the disputed land. Nor was it clarified what were the “illegal objects”.

59.On the evidence before me, I am not satisfied that the plaintiff can be held liable.

Whether the defendant is entitled to loss of rent at the rate of $15,000 per month from October 2012?

60.Paragraph 24 of the Defence and Counterclaim pleaded the following :-

“Towards the end of October 2012, the Defendant had instructed Parich Property Consultant Co. to lease out the Suit Land at HK$15,000.00 per month. Because of the present litigation since 1^st November 2012 and the fact that a vehicle, bearing registration no.DR6531 with an expired licence has been parked inside the Suit Land up to the date of this counterclaim, the Suit Land cannot be leased out and the Defendant is suffering HK$15,000.00 per month since end October 2012 and continuing.”

61.Firstly, there is no evidence to relate the vehicle bearing registration number DR6531 to the plaintiff. Nor is there evidence to suggest that it was the plaintiff who placed the said vehicle on the disputed land.

62.Secondly, under cross-examination, Fong disclosed that the disputed land was leased out from the end of 2013 at the rent of $10,000 per month. That being the case, it cannot be said that the defendant could not lease out the disputed land because of the present action.

63.On the evidence before me, therefore, I find that the counterclaim under this head is unsubstantiated.

Conclusion and Order

64.For the foregoing reasons, both the plaintiff’s claim and the defendant’s counterclaim are dismissed.

Costs

65.Although both the claim and the counterclaim are dismissed, the defendant remains the substantial winner.

66.Therefore, I make an Order nisi that the plaintiff shall bear 80% of the defendant’s costs of this action, to be taxed if not agreed. In the absence of an application for variation, the Order nisi shall become absolute upon the expiration of 14 days from the date of this judgment.

Mr Kenneth Y F Wong, instructed by Wong, Hui & Co, for the plaintiff

Mr Paul Kwong, of Paul Kwong & Co, for the defendant