Bothlink Ltd v. King Glare Ltd and Another

HCA 1978/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1978 OF 2013

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J U D G M E N T

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A.  INTRODUCTION

1.The plaintiff (“Bothlink”) claims against the 1^st defendant (“King Glare”) and the 2^nd defendant (“Convey”) in trespass and nuisance.

B.  THE FACTS

2.Save as indicated, the following facts are not in dispute.

B1.  The wall

3.Hong Kong Mansion, 1 Yee Wo Street, Causeway Bay (“the Building”), is situated at the intersection of Great George Street and Yee Wo Street in Causeway Bay.  The external wall on the west side of the Building faces Hennessy Road in a busy area of Causeway Bay.

4.The 4^th to 19^th floors of the wall on the west side of the Building (“the Wall”) (and the external wall of the Building on the east side) were acquired by Mr Leung Shum (“Mr Leung”) in 1980.  The 3^rd floor of the wall was owned by the Incorporated Owners of the Building (“the IO”) at all material times (“the 3/F Wall”).

5.The units with windows on the west side of the Building are all “A” units.  Relevant to the present case are the units on the 3^rd, 4^th and 5^th floors (“Unit 3A, Unit 4A and Unit 5A” respectively). Outside Unit 3A on the west side of the building on the 3^rd floor there is a flat roof (“the 3/F Flat Roof”).

B2.  The contractual arrangements

6.In October 1990, Mr Leung granted a three‑year licence to King Glare to install advertising boards at three positions on the external walls of the Building which were owned by him, for a monthly fee of $20,000.

7.In December 1994, Mr Leung granted another three‑year licence (from June 1994) to King Glare to install advertising boards at two locations, this time limited to the Wall, for a monthly fee of $62,000.

8.In September 1997, Mr Leung granted another three‑year licence (from June 1997) to King Glare to install advertising boards at two locations on the Wall, for a monthly fee of $88,000.

9.Some time thereafter, Mr Leung incorporated Bothlink, and in September 2000 he assigned the Wall to Bothlink.

10.On 19 July 2006, Bothlink granted a licence to King Glare to use the Wall for three years, from 1 March 2005 to 28 February 2008 (“the Licence”).  The Licence referred to the fact that Bothlink had previously granted a licence to King Glare to use the Wall for advertising purposes, and that King Glare had erected metal frames and supporting equipment on the Wall, at four separate locations, for the purpose of affixing and displaying advertisements for its customers.  Pursuant to the Licence:

(1) King Glare was to pay a monthly licence fee of $90,000 per month (clause 2.1);

(2) on expiry or earlier determination of the Licence, and within 30 days thereof, King Glare was (at its own cost and expense) to demolish and remove the Old Structures and any other additional erections or fixtures, and to reinstate the Wall to its original state in good, clean, substantial and proper condition, making good any damage caused by the removal (clause 3.8).

11.Upon expiry of the term under the Licence, Bothlink and King Glare agreed to continue the licence arrangement on a monthly basis, with the monthly fee increased to $108,000, but otherwise on the same terms as the Licence.  References below to the “Licence” include references to the licence arrangement as continued.

12.By three written agreements of 1 March 2007, 19 February 2008 and 26 February 2009, King Glare sub‑licensed its right to use the Wall to Convey for the period from 1 March 2007 to 28 February 2010 for a licence fee of $129,600 per month (“the Sub‑Licences”)[1]. It was Convey’s case that the sub‑licence arrangement was terminated on 27 April 2009; King Glare initially contended for some other date but in its closing, adopted the same date.

B3.  The structures erected, and advertisements displayed, on the Wall over the years

13.Under the licence agreement between Mr Leung and King Glare in October 1990, King Glare was permitted to erect a number of structures on the Wall for the purpose of displaying advertisements.  By the time of the Licence in July 1996, there was a large rectangular metal frame mounted on the Wall which spanned the width of the Wall and in terms of height ran from about the 3^rd to the 5^th floors.  I will refer to this as “Old Frame C” as it was labelled “C” in the plan attached to the Licence.  On either side of Old Frame C were two smaller rectangular frames, which relied on Old Frame C for support.  These smaller frames projected out from the Building and overhung the pavements below, on the north and south sides of the Building respectively.  Separately, there was another tall, narrow rectangular frame mounted above these three frames, at one side of the Wall (where the Wall met the south external wall).  This frame projected partly over the pavement on the south side of the Building, and ran from about the 6^th to 11^th floors.

14.Advertisements were displayed in each of these four frames.

15.It was Mr Leung’s understanding that the structures, frames and advertisements which were in place as at the time of the termination of the Licence on 31 May 2009 had been erected by King Glare, but the witness called by Convey (Mr Ma Wing Kui, its former project director (“Mr Ma”)) testified that they had in fact been erected by Convey, pursuant to the Sub‑Licences granted by King Glare.  I do not think it matters for the purpose of this case which was the case, but I consider it more likely that Mr Ma would have known which was correct given his position, and I find that the structures, frames and advertisements were erected by Convey pursuant to the Sub‑Licences.

16.I will refer to the aforesaid structures, frames and advertisements as “the Old Structures”.

17.Starting from about April 2009, the IO arranged for a renovation of the entirety of the external walls of the Building.  In the course of the renovation, the Old Structures were removed.  There is some dispute as to exactly when this was done, and I will return to this below.  The external walls of the Building were also covered with scaffolding, enclosed by green netting, for the purpose of the renovation.  Subsequently, with the consent of the IO, Convey erected an additional scaffolding structure over the green netting at the west of the Building.  The scaffolding structure spanned the width of the west external wall of the Building and ran from the 3^rd floor upwards for several floors — it was essentially located where Old Frame C had once been, but was taller and slightly narrower.

18.With the consent of the IO, advertisements were displayed by Convey on the green netting, and the additional scaffolding structure, at various times throughout the course of the renovation.  I return to this below.

19.I will refer to these structures, and the advertisements thereon, as “the Temporary Structures”.

20.After the renovation was completed, Convey erected a new structure for the display of advertising.  It consisted of, inter alia, metal brackets attached to the 3/F Flat Roof and the 3/F Wall; metal beams bolted onto the external wall on the north and south sides of the Building which projected into the air; metal beams anchored inside Unit 5A; metal beams attached to the anchors in Unit 5A which projected out from the windows of Unit 5A (which windows were kept permanently open); and a metal crossbeam which joined the two metal beams projecting out of the windows. Onto this structure, and onto the pipes and drains of the Wall, was attached an elaborate three‑dimensional network of scaffolding, the outer part of which formed a three‑sided frame for the display of advertising.  Once put up on the frame, the advertising surrounded and obscured the view of the external wall of the Building at the 3^rd, 4^th and 5^th floors from the street below.  Apparently, the design intention behind the elaborate and complicated structure and scaffolding was to avoid contact between them and any part of the Wall (namely that owned by Bothlink).

21.At the hearing, there was a dispute as to whether:

(1) a metal bracket attached to the 6^th floor of the Wall and the metal cable coming out from it; and

(2) a security camera and spot light, and associated wiring, mounted at the 5^th floor of the Wall,

formed part of the items installed by Convey as part of the new structure for the display of advertising.  I deal with these below.

22.I will refer to the aforesaid new structure, scaffolding and advertisements thereon (and also the aforesaid disputed items, where the context so requires), as “the New Structures”.

B4.  Agreements between Convey and owners of other parts of the Building

23.In order for Convey to erect and maintain the New Structures, it had to enter into various agreements with other parties, as follows.  These agreements do not cover the full period for which the New Structures have been erected; it was not clear if there were other similar agreements for the periods unaccounted for.

B4.1  Agreements with the owner of the 3/F Wall, namely the IO

24.On 30 April 2008, Convey entered into a “Property Leasing Agreement” with the IO to lease the 3/F Wall, for two years from 1 May 2008 to 30 April 2010, at a monthly rent of $35,000.

25.After its expiry, Convey entered into a further “Property Licence Agreement” with the IO for the use of the 3/F Wall and the “main structure of the 4^th floor and up to the 23^rd floor inclusive, saving the rendering layers thereof” (and the corresponding parts on the east side), for two years from 1 January 2011 to 31 December 2013, at a monthly rent of 40% of the gross income received from advertisements displayed at the licensed locations.  It can be seen that the position taken by the parties to this agreement was that Bothlink’s ownership of the Wall did not extend beyond the “rendering layers” of the external wall.

26.Subsequently, there was a further and similar “Property Licence Agreement” with the IO for the use of the same property, for two years from 1 January 2014 to 31 December 2015, at a monthly rent of 40% of the gross income received from advertisements displayed at the licensed locations.

B4.2  Agreements with the owner of Unit 3A and the 3/F Flat Roof, Madam Lee Kwok Wah

27.On 15 July 2011, Convey entered into a tenancy agreement with Madam Lee Kwok Wah (“Madam Lee”) to lease Unit 3A and the 3/F Flat Roof, for two years from 1 August 2011 to 31 July 2013, at a monthly rent of $55,000.  When cross examined by Mr Dennis Law, Bothlink’s counsel, Mr Ma said that under this agreement, Convey obtained the use of Unit 3A (including the right to block the windows thereof) and the 3/F Flat Roof.

28.On 20 August 2013, Convey entered into a further and similar agreement with Madam Lee to lease the same property, for two years from 1 September 2013 to 31 August 2015, at a monthly rent of $58,000.

B4.3  Agreements with the owner of Unit 4A, Madam Chu Si Yuk

29.On 1 January 2010, Convey entered into a tenancy agreement with Madam Chu Si Yuk (“Madam Chu”) to lease Unit 4A, for two years from 1 November 2010 to 31 October 2012, at a monthly rent of $11,500.

30.On 28 September 2012, Convey entered into a further tenancy agreement with Madam Chu, again to lease Unit 4A, for two years from 1 November 2012 to 31 October 2014, at a monthly rent of $16,000.

31.Shortly prior to this second tenancy agreement, on 16 August 2012, Convey entered into a further agreement with Madam Chu, this time for the right to install advertising light boards on the windows of Unit 4A, for three years from 1 November 2012 to 31 October 2015, at a monthly rent of $6,000. This agreement ran concurrently with the tenancy agreement of 28 September 2012.

B4.4  Agreements with the owner of Unit 5A, King Glare

32.No formal agreement between Convey and King Glare regarding the use of Unit 5A was placed before the court.  However, there were a number of debit notes[2] from King Glare which charged Convey for a “rental fee” or “frontlit signage”.  The amounts charged varied.  Mr Ma said that the Convey rented Unit 5A from King Glare.

33.My impression was that Mr Ma was not entirely forthcoming about the arrangement between Convey and King Glare in relation to the use of Unit 5A. In cross examination by Mr Law, Mr Ma said at one point that he was not involved in the negotiations with King Glare regarding the use of Unit 5A, and therefore could not shed light on various features of the debit notes from King Glare to Convey.  He also initially said that he could not explain why the debit notes were for different amounts in different months.  However, upon further probing, he revealed that this was because King Glare was given a 20% share of the gross income from the display of advertisements.  Neither King Glare nor Convey called further evidence to suggest otherwise.

B5.  These proceedings

34.From November 2008, King Glare stopped paying the licence fee under the Licence.  Bothlink made various demands, and ultimately on 22 May 2009 issued (through solicitors) a letter terminating the Licence.  It is an agreed fact that the effect of the letter was to terminate the Licence with effect from 31 May 2009.

35.Bothlink then commenced the present proceedings, seeking the outstanding arrears of the licence fee from King Glare.

36.Bothlink applied for summary judgment against King Glare.  By consent, a partial judgment was entered on 9 November 2011 against King Glare in the sum of $756,000 together with interest thereon, being the arrears of licence fee for the period up to and including 31 May 2009.

37.King Glare has counterclaimed against Bothlink for the deposit of $180,000 paid under the Licence.  Bothlink has indicated that it does not object to setting this off against whatever sum may be found due to it.  King Glare has also counterclaimed against Convey for unpaid sub‑licence fees from February to May 2009.  According to King Glare, this counterclaim (against Convey) was abandoned shortly prior to the commencement of trial.

C.  THE PARTIES’ CASES

38.It is Bothlink’s case that the Old Structures, the Temporary Structures and the New Structures constituted a trespass and/or a nuisance by King Glare and/or Convey from 1 June 2009 up to the present, and continue as such.

39.It is King Glare’s case that:

(1) as regards the Old Structures, it was not in occupation or possession of the Wall as it had entered into the Sub‑Licences with Convey; and

(2) it had no involvement with either the Temporary Structures or the New Structures.

40.It is Convey’s case that:

(1) it was King Glare’s responsibility to remove the Old Structures;

(2) as regards the Temporary Structures:

i. The IO had given consent to Convey to display the advertisements complained of;

ii. Bothlink was in any event not able to use the Wall to display advertisements during the period of time when the Temporary Structures were in place; and

iii.  Convey did not display advertisements throughout the entire period when the Building was being renovated;

(3)  as regards the New Structures:

i. they are not affixed to the Wall;

ii. the New Structures are a legitimate use by the owners of Units 3A, 4A and 5A (and the IO) of their proprietary rights;

iii. any interference with Bothlink’s rights was not unreasonable;

iv. Bothlink could not use the Wall in the way that it was used with the Old Structures, so that Convey is not the cause of Bothlink’s alleged loss; and

v. even if there was any trespass, it is de minimis in nature and attracts nominal damages at most, and/or any damages awarded should be based on Convey’s valuation evidence.

D.  THE MAIN FACTUAL DISPUTES

41.The factual disputes between the parties related mainly to the following:

(1) when the Old Structures were demolished;

(2) for what period Convey used the Temporary Structures to display advertising;

(3) when the New Structures were erected;

(4) whether the New Structures have any contact with the Wall and if so the nature of that contact; and

(5) whether King Glare had any involvement in the Old Structures, Temporary Structures or New Structures.

42.I will set out my findings on these matters before addressing the issue of whether there was any trespass or nuisance.

D1.  When were the Old Structures demolished?

43.The Old Structures were built by Convey pursuant to the Sub‑Licences from King Glare.  King Glare and Convey say that the Old Structures were demolished by August 2009.  Bothlink says that they were not demolished until later.

44.The evidence before me included photographs of the west external wall of the Building taken at different dates.  The parties were in agreement that the dates displayed on the photographs were an accurate indication of the dates when the photographs were taken.

45.From the photographs, it is clear that all of the Old Structures were still in place on 11 August 2009, and indeed advertisements were still being displayed in the frames.

46.There are photos from 15, 19 August 2009 and 19 September 2009 which show that the Old Structures were in the course of being removed, and that scaffolding and green netting had been put up all around the external wall of the Building for the purpose of renovation.

47.There are no further photos until 2 December 2009, by which time all of the Old Structures had clearly been removed (and Bothlink did not suggest otherwise).

48.There were also a number of letters produced to the court regarding a building order which had been issued by the Buildings Department in 2004.  The parties were agreed that the order had required the demolition of the Old Structures.  The Buildings Department had written to Convey on 20 August 2009 saying that a recent inspection had revealed that scaffolding was found erected to the signboards (which were the subject of the order).  There was however no indication as to when the inspection had taken place, so this letter does not give direct assistance as to when the Old Structures were demolished.  There was then a letter of 26 August 2009 from Convey in reply to the Buildings Department, enclosing a copy of a letter from King Glare’s solicitors of 5 August 2009 to the Building Department’s appointed contractor.  The latter indicated that demolition works under the building order would commence on 13 August 2009 and be completed by September 2009.  Convey, in its letter of 26 August 2009 to the Buildings Department, indicated that it was adopting King Glare’s programme of works.  This correspondence would therefore indicate that: as at 26 August 2009, the demolition work for the Old Structures had not been completed, and it was anticipated that the work would be completed by the end of September 2009.

49.In addition to the documentary evidence, Mr Ma gave evidence about the demolition of the Old Structures.  He initially said that the Old Structures were demolished in about August 2009, but when shown the photograph of 19 September 2009 in cross examination by Mr Billy Poon (counsel for King Glare), Mr Ma said that the Old Structures were in the process of demolition at that date.  When cross examined by Mr Law, Mr Ma said that he could not remember very clearly when the Old Structures were removed.  Mr Ma had also said that the demolition process took two to three weeks, but the photographs show that the process was probably slightly longer.

50.Mr Leung’s evidence was that as far as he could remember, the removal of Old Frame C was done at some point roughly between October and November 2009.  He did not, however, have any independent matter to corroborate this.

51.I consider that the photographs and correspondence with the Buildings Department provide contemporaneous and the most reliable evidence as to when the Old Structures were demolished, and I find that they were not demolished until the end of September 2009.

D2.  For what period did the Temporary Structures display advertising?

52.In the light of my views as explained in section E2 below, the issue of when the Temporary Structures in fact displayed advertising does not arise, but in case I am wrong in that approach, I will set out my findings on this issue as well.

53.In his witness statement, Mr Ma said that with the agreement of the IO, Convey displayed advertising on the Building’s scaffolding from 27 April 2009 to 26 February 2010, but not from 27 February 2010 to 31 December 2010.  From the photographs and Mr Ma’s descriptions in the witness box, his reference to scaffolding in this regard was plainly to both the scaffolding erected by the IO for the renovation, and the additional scaffolding structure erected over the green netting at the west of the Building after Old Frame C was removed.

54.Mr Ma acknowledged that the advertisement for “ISA” was put up by Convey.  The photographs show that this particular advertisement was on the Temporary Structures as late as 22 February 2010.  There are no further photographs for February 2010.  The photographs from March 2010 show that the “ISA” advertisement had been removed by then.  I therefore find that advertising was displayed by Convey on the Temporary Structures from 27 April 2009 to 26 February 2010 as claimed by Convey.

55.In cross examination by Mr Law, Mr Ma accepted that the reason why advertisements were not displayed after 26 February 2010 on the Temporary Structures was because Convey was unable to find customers.  Mr Ma also acknowledged, and I find, that Convey continued to maintain the additional scaffolding structure over the green netting at the west external wall of the Building, for the purpose of displaying advertising in the event that Convey could secure customers.

56.I note from the photographs that the green netting and Convey’s additional scaffolding thereon remained in place until at least 7 June 2010.  The green netting was removed by 19 August 2010, but the renovation scaffolding, and also, it appears, Convey’s additional scaffolding (for displaying advertising), were still in place at that time.  By 14 September 2010, much of the renovation scaffolding had been removed, although there still some at the lower floors.  The additional scaffolding had been removed by then.  I therefore find that Convey’s additional scaffolding remained in place until at least 19 August 2010.

D3.  When were the New Structures erected?

57.Bothlink’s pleaded case is that the New Structures were erected from about November 2010, although in closing it was said that the date was about December 2010.  Convey’s pleaded case is that they were erected from 1 January 2011.  King Glare denies involvement in the New Structures.

58.From the photographs, it can be seen that by 31 December 2010, the New Structures had been fully completed and an advertisement was already on display.  In cross examination, Mr Ma said that the construction process took one to two weeks.  In closing submissions, Mr Andy Hung, counsel for Convey, accepted that the structures were in place by some time in December 2010.

59.I find that Bothlink has established that the New Structures were erected at the latest by 17 December 2010 (on the basis that it took two weeks to erect them).

60.I should add that from the photographs, it appeared that from time to time, some changes may have been made to parts of the New Structures, in that the advertisements displayed sometimes ran from the 5^th floor down to the 3^rd, but sometimes were at the 5^th and 4^th floors only, and in that the scaffolding may have been rearranged — for example, a photograph of 18 July 2011 shows a number of loose bamboo poles at the 3^rd floor level, and the photographs in Convey’s document “Internal Structures Information of 3^rd to 5^th Floors of Hong Kong Mansion” of 24 June 2013 (“Convey’s Internal Document”) show the reconstruction of the scaffolding after dismantling.  However, none of the parties took any point about this.

D4.  Did the New Structures have any contact with the Wall; if so what was the nature of that contact?

61.This was the subject of much cross examination at trial.  I will deal with each of the following elements of the New Structures separately:

(1) the scaffolding;

(2) the metal bracket attached to the 6^th floor of the Wall and the metal cable coming out from it; and

(3) the security camera and spot light, and associated wiring and pipe, mounted at the 5^th floor of the Wall.

D4.1  The scaffolding

62.As described above, there were various metal supports from the external wall on the north and south sides of the Building and protruding out from the windows of Unit 5A, onto which an elaborate three‑dimensional network of scaffolding was attached.  The outer part of the frame formed a three‑sided frame for the display of advertising.  It was Bothlink’s case that there were poles which touched the Wall and relied on it for support.  It was Convey’s case that no part of the scaffolding touched the Wall; at most, there were poles which were attached to the pipes and drains which were in turn attached to the Wall.

63.Mr Leung took a number of photographs from Unit A on the 6^th floor (“Unit 6A”), and used these in support of his evidence that there were a number of bamboo poles which touched the Wall, at least at the 5^th floor level.  In the witness box, he referred in particular to five photographs[3].  For four of these, it was not possible to see clearly the ends of the bamboo poles from the angle at which the photographs had been taken, so it was not possible to say from looking at the photographs alone whether the poles touched the Wall.  There was, however, a particular photograph taken on 28 December 2012 (at the upper part of page 351 of the hearing bundle), the middle of which clearly shows that two bamboo poles from the scaffolding, approximately horizontal and perpendicular to the plane of the scaffolding which carried advertising, were touching the Wall.

64.Mr Ma’s evidence was that none of the bamboo poles had touched the Wall; he had given instructions that they should not do so, and he had himself visited the Building many times to check that this was the case.  For one of the five photographs relied on by Mr Leung, Mr Ma dismissed it as having been taken from an angle which made the poles look as if they were touching the Wall.  But for the photograph on page 351, whilst Mr Ma claimed that the poles identified by Mr Leung did not touch the Wall, he did not explain how this could be the case in spite of what was shown on the photograph (beyond his general statement that he had personally inspected the site (albeit not on the date of the photograph) and had given instructions that the poles should not be touching).

65.I bear in mind that Mr Ma was responsible, together with Convey’s engineering department, for the design of the New Structures, and the fact that he no longer works for Convey.  He should therefore (1) be familiar with the New Structures and (2) have no vested interest in the giving of his evidence.  Nevertheless, I do not accept that it would have been possible for Mr Ma to have been able to check whether each and every bamboo pole was touching the Wall given that there were various obstructions which would have blocked his view, such as the pipes and air conditioning units mounted to the external wall, and indeed the scaffolding itself, a lot of which was in close proximity to the Wall.  I also find Mr Ma’s claim to have regularly visited the site to personally inspect whether each and every bamboo pole was or was not touching the Building’s external wall to be unconvincing, given his senior position as a project manager.  Furthermore, in the course of giving his evidence on certain matters, Mr Ma struck me as being not wholly forthcoming[4], so I have treated his evidence with some reservation.  In contrast, I found Mr Leung to be a witness who gave straightforward answers.  Although he was of advanced age, he answered questions clearly, directly, and without hesitation. I prefer Mr Leung’s evidence over Mr Ma’s on the issue of whether there were bamboo poles touching the Wall.

66.Apart from Mr Ma, Convey called Mr Cheung Yiu Wah (“Mr Cheung”), a director of the contractor engaged by Convey to erect the New Structures, to give evidence.  In his witness statement, Mr Cheung said that he was told by Mr Ma that the New Structures were designed so that the metal parts and scaffolding would not encroach onto the external wall at the 4^th and 5^th floors.  In cross examination by Mr Law, Mr Cheung was shown the photograph of the bamboo poles at page 351. He said that it looked as if the poles were not touching the external wall and were a very short distance away from it.  When pressed as to whether he was saying this from observation or from memory, he said that he recalled having instructed the scaffolding master to ensure that the bamboo poles did not touch the wall, and that it was alright for the poles to be just one to two sheets of paper or a few millimetres away from the wall.  I find this explanation somewhat contrived, and my impression is that it was put forward in an effort to explain away the photograph.

67.Upon further questioning, Mr Cheung:

(1) acknowledged that when the wind blew against the New Structures, in particular when they were covered with a large sheet of advertising, a number of the horizontal bamboo poles of the scaffolding would move towards and touch the external wall of the Building;

(2) explained that the function of the horizontal bamboo poles of the scaffolding shown on page 351 was to provide stabilisation — they prevented the massive structure of the scaffolding from swaying backwards and forwards when the tips of the poles touched the external wall;

(3) acknowledged that there were other similar horizontal bamboo poles providing stabilisation all over the rest of the structure.

68.In the light of all the above evidence, I find that a number of bamboo poles of the scaffolding of the New Structures did and do touch the Wall.  Insofar as it may be necessary, I further find that the New Structures have been relying on the Wall for a measure of stability by means of the horizontal bamboo poles: both the ones which were already touching the Wall and the ones which touch the Wall when the wind blows against the advertising displayed on the New Structures.  Whilst Mr Ma and Mr Cheung may well have given instructions that the scaffolding should not touch the Wall, I find that these instructions were not implemented altogether successfully.

69.Leaving aside the fact that a number of the bamboo poles touched the Wall, the totality of the bamboo scaffolding was so dense and close to the Wall at the 4^th and 5^th floors that it is difficult to see what use could have been made by Bothlink of this part of the Wall had it wished to rent it out for (say) display of advertisements.  This was starkly illustrated by the photographs taken in the course of the trial and produced by Mr Cheung.

D4.2  The metal bracket at the 6^th floor and the attached metal cable

70.It was not disputed that a metal bracket was mounted at the 6^th floor level of the Wall and a cable was attached to this.  It was Bothlink’s case that this cable was attached to the two metal beams which had been bolted to the north external wall of the Building and was used to support these beams (which beams in turn provided support for the New Structures).  It was Convey’s case that the bracket and wire had not been installed by Convey, and was left behind by other workers during the renovation, and both Mr Ma and Mr Cheung’s evidence was to that effect.

71.Bothlink relied on the fact that the photographs appeared to show that the wire extending from the bracket was attached to the metal beams, or was taut.

(1) There were two photographs in particular which appeared to show that the wire was attached to the metal beams.  One was from Convey’s Internal Document (page 420 in the bundle[5]).  Various reproductions or variations of page 420 were produced at the trial — a print of the central part of the photograph, a slightly enlarged copy of better quality than page 420, and a reprint on photographic paper (exhibits P1a, P1b and P1c), and I have examined all of these.  The second photograph was one taken on 22^nd February 2013, and a print on photographic paper was also produced (exhibit P3).  However, these two photographs were not taken at sufficiently close range for me to be satisfied on a balance of probabilities that the wire was indeed attached to the metal beams.

(2) There were then a number of photographs (at pages 359 (upper photo) and 365) which showed that the upper end of the wire was pulled taut, suggesting that it was fixed to something at its lower end.  However, these photographs did not show the lower end of the wire, and I do not think it is possible to conclude from the mere appearance of the upper part of the wire that the lower end was more likely than not to have been attached to the metal beams.  Mr Cheung produced a number of photographs in his witness statement which were taken in the course of the trial (albeit not by Mr Cheung himself) and which showed, close up, that (at least at the time of photograph taking) the end of the wire was indeed hanging loose and was not attached to the metal beams, even though the upper part of the wire did appear taut.

72.In his closing address, Mr Law also pointed out the fact that a photograph of the west external wall taken on 14 September 2010 did not appear to show any sign of the bracket and wire, which suggested that they were not items left behind by the renovation workers.  Again, however, that photograph is not at sufficiently close range for me to make a reliable judgment one way or the other.

73.I therefore find that Bothlink fails to establish that the metal bracket attached at the 6^th floor of the Wall and attached metal cable were part of the New Structures.

D4.3  The security camera and spot light, and associated wiring, mounted at the 5^th floor of the Wall

74.Shortly before the trial, Mr Leung noted from the photographs in Convey’s Internal Document that there was what appeared to be a horizontal pipe apparently attached to the Wall above the windows of Unit 5A.  He was able to take photographs of the pipe and wiring which was attached thereto and which led to electrical devices, on the day prior to the trial, and these were produced on the first day of the trial.  I granted leave to Bothlink to file a supplemental witness statement from Mr Leung to produce and explain these photographs, and leave to Convey to file Mr Cheung’s witness statement (with accompanying photographs) in response.

75.It subsequently became clear that what Mr Leung had seen were a security camera and spotlight mounted on the Wall at the 5^th floor level, with wiring from these attached to a small white pipe on the Wall, which wiring and pipe ran across the width of the Wall and extended to another set of camera and spotlight on the external wall on the south side of the Building.

76.Mr Cheung in his witness statement and in his oral testimony said that the light and security camera were not set up by his company for Convey.  He surmised that the installation was by “owners” (presumably of one of the units in the Building).  He produced a photograph (labelled “F”) which showed the spotlight and security camera on the Wall and the associated wiring.

77.Mr Ma was asked about photograph F in examination in chief, and the light, security camera, black wiring and white pipe shown thereon.  He said that he supposed it was Convey which had installed the items, for anti‑burglary and illumination purposes.  He thought it was Convey because it was Convey’s usual practice to install such items to monitor signage which they put up.  When asked about the identity of the installer again, Mr Ma said “it should be Convey”.

78.I therefore find that the light, security camera, black wiring and white pipe mounted at the Wall at the 5^th floor level were installed by Convey.

D5.  Did King Glare have any involvement in the Old, Temporary or New Structures?

79.It was submitted on behalf of Bothlink that in the event that I should find in its favour, King Glare and Convey should be held jointly and severally liable.  The basis for this submission was essentially that there were suspicious circumstances which suggested that King Glare and Convey were closely linked, if not in common ownership.

80.However, even if King Glare and Convey are closely linked, or in common ownership, the real question which I have to consider is whether each of King Glare and Convey were involved in erecting the Old, Temporary or New Structures.  The claim in trespass pleaded by Bothlink against King Glare in relation to the period after termination of the Licence was that King Glare itself had unlawfully occupied the Wall.  The claim in nuisance, whilst pleaded on the basis that King Glare had erected or “allowed to be erected” various items which obscured the Wall, was when understood in context, also a claim that King Glare itself had erected the offending items.  At the commencement of the trial, Mr Law had explained that it was unclear whether the evidence would show that King Glare or Convey or both were involved in the erection of the various structures, as some of the documentation which was ascribed to one or the other of King Glare or Convey in fact involved the same personnel; it was not suggested that liability was being sought against King Glare on the alternative basis that it owned Unit 5A and had allowed Convey to use this in a way so as to create a nuisance.

81.I find King Glare’s involvement in the erection of the Old, Temporary and New Structures to be as follows[6].

(1) As regards the Old Structures, these were erected on the Wall by Convey with King Glare’s permission pursuant to the Sub‑Licences.

(2) I have not seen any real evidence that King Glare was involved in the Temporary Structures, which were admitted by Convey to have been erected by it.

(3) The same is true in relation to the New Structures.  Whilst King Glare allowed Convey to use Unit 5A in return for a share of the income from displaying advertising, this does not mean that King Glare was involved in the erection of the New Structures (any more than the IO, which had a similar arrangement, was so involved).

82.In case I am wrong in my approach, I will set out my conclusions regarding the matters relied on by Bothlink as indicating a close relationship or common ownership between King Glare and Convey.  It is not disputed that at one point, the two companies were both headed by Mr Mak Shiu Tong (“Mr Mak”), and they had a common shareholder, Goldman Mak (Mr Mak’s son).  In June 2007, the shares in Convey were transferred to one T/T Xinhua Finance Media (Convey) Ltd, and in November 2008, the shares in King Glare were transferred to Samadou Holdings Limited (Corporation).  Nevertheless, there were a number of matters which suggested that King Glare and Convey remained closely linked.

(1) Mr Mak remained the honorary chairman, and a consultant, to Convey, even after the disposal of his shares.

(2) Mr Mak executed the Sub‑Licences of 2007, 2008 and 2009 on behalf of Convey.  In its pleadings, Convey denied the authority of Mr Mak to sign the Sub‑Licences (a position it retracted at trial), whilst King Glare asserted that the documents were properly executed.

(3) Mr Ma said that he was never on the staff of King Glare, but he in fact signed letters from King Glare to Bothlink in January and March 2009 acknowledging the arrears of the fees due under the Licence and assuring Bothlink that payment would shortly be made.  Mr Ma never adequately explained this.

(4) The debit notes issued by King Glare to Convey were addressed to the latter at Suite 303 Haiphong Mansion, which was the registered address of King Glare at least in August 2009, and which was also the address given in the witness statement of Cheung Yu Lung Peter, an officer of King Glare who was intended to be (but was not in fact) called as a witness by King Glare.

83.Whilst these matters suggest that King Glare and Convey continued to have some sort of association despite the disposals of shares in 2007 and 2008, they are not enough to show that the two companies remained in common ownership.  Nor is it possible to come to any concluded view as to the nature of the continuing association between the two companies.

84.In addition, Bothlink referred to a number of matters in relation to the way in which King Glare conducted its defence in these proceedings, such as the late emergence of the fact of the Sub‑Licences and the lack of disclosure of King Glare’s ownership of Unit 5A until trial.  However, these are not necessarily indicative of anything suspicious in the relationship between Bothlink and King Glare.

E.  LIABILITY

E1.  The Old Structures

85.The continuing presence of the Old Structures on the Wall after termination of the Licence was unauthorised, and hence amounted to a trespass.  See, for example, Chung Yuk Wah and others v Golden Gate Food Factory Ltd [1963] HKDCLR 106 at 117, where the unauthorised presence of a signboard on the plaintiffs’ external wall was held to amount to a trespass.

86.Since King Glare allowed its sub‑licensee to erect the Old Structures on the Wall and failed to remove them (or have them removed) within 30 days[7] after termination of the Licence on 31 May 2009, it is liable in trespass to Bothlink for the period from 1 July 2009 until the removal of the Old Structures, which I have found to be 30 September 2009.

87.King Glare’s argument in closing was that it was not in occupation or possession of the Wall by reason of, and ever since, the sub‑licence granted to Convey on 1 March 2007.  However, the reason why the Old Structures came to be placed on the Wall in the first place was that King Glare had allowed this to happen, and its obligation was to remove (or have removed) the Old Structures once its permission under the Licence was terminated.

88.Convey, being the party which actually erected the Old Structures and (like King Glare) failed to remove them when it no longer had authority to allow them to remain,[8] is similarly liable and also liable in trespass to Bothlink for the period from 1 July 2009 to 30 September 2009.

89.The focus of Convey’s argument in closing was on the New Structures (and to a certain extent) the Temporary Structures.  No real argument was advanced in relation to liability for trespass in relation to the Old Structures.

90.Bothlink did not claim relief for nuisance in relation to the Old Structures.

E2.  The Temporary Structures

91.Bothlink says that even after the Old Structures were removed,

(1) King Glare failed to deliver up vacant possession to it.

(2) King Glare and/or Convey displayed advertising on the IO’s scaffolding or the additional scaffolding erected by Convey during the period of renovation, covering the Wall and preventing it (or the IO’s scaffolding or netting immediately in front of it) from being used by Bothlink.

92.The facts, however, are that by the time the Old Structures came to be removed, the Building was already shrouded in the scaffolding and green netting which the IO had erected for the purpose of the renovation.  Whilst there may not have been any express declaration by King Glare that it was handing back the Wall to Bothlink, the Old Structures had gone and the occupation of the Wall, if any, was by the IO.  Mr Law accepted that Bothlink had consented to the renovation, and hence the IO’s occupation.  The fact that there were advertisements placed on top of the IO’s green netting, or the fact that Convey erected an additional structure on top of that green netting, does not, without more, amount to a trespass to the Wall.  Nor can Bothlink complain that it was prevented from using the IO’s scaffolding or netting for displaying advertisements — it has not established that it was entitled to use these in the first place.  Further, as regards King Glare, it was not responsible for the display of advertisements or erection of the additional scaffolding in any event.

93.For the period from 1 October 2009 to 16 December 2000, therefore, I do not find that there was any trespass to the Wall by King Glare or Convey.

94.Bothlink did not claim for relief for nuisance in relation to the Temporary Structures.

E3.  The New Structures

E3.1  King Glare

95.As I have found that King Glare was not involved in erecting the New Structures, I do not find that it is liable in either trespass or nuisance in respect of the same.

E3.2  Convey — trespass

96.As regards Convey, since some of the bamboo poles of the New Structures did and do touch the Wall, and since further poles would touch the Wall when the wind blows against the advertisements displayed on the New Structures, Convey is liable in trespass to Bothlink for erecting and maintaining the New Structures, having caused items to be placed on and against the Wall without authorisation, from 17 December 2010.  This trespass is continuing to date.

97.Furthermore, the security camera and spotlight and associated wiring and pipe mounted at the 5^th floor of the Wall also amounted to a trespass by Convey against Bothlink, having been affixed to the Wall without authorization.

98.In closing, Mr Hung did not seriously argue that the New Structures did not amount to a trespass, and he accepted that trespass is actionable without proof of loss, but instead, took a number of points regarding damages, which I will deal with below.

E3.3  Convey — nuisance

99.The tort of nuisance is a tort directed against the plaintiff’s enjoyment of rights over land: see Hunter & ors v Canary Wharf Ltd [1997] AC 655 at 687H, 688E, per Lord Goff.  Private nuisances are of three kinds: (1) nuisance by encroachment on a neighbour’s land, (2) nuisance by direct physical injury to a neighbour’s land, and (3) nuisance by interference with a neighbour’s quiet enjoyment of his land: Hunter, at 695B, per Lord Lloyd.  The third kind arises for consideration in the present case.

100.The nuisance complained of by Bothlink is that the New Structures covered or obscured the 4^th and 5^th floor of the Wall from the view of passers‑by and/or road users in the vicinity of the Building.

101.Mr Hung argued that:

(1) Bothlink has not established that any of its rights was interfered with by reason of the New Structures, which were simply an exercise by the owners of Units 3A, 4A, 5A and the 3/F Wall of their own proprietary rights;

(2) Bothlink has not established that the interference with its rights was unreasonable; and

(3) Bothlink has failed to prove that its damage was caused by the nuisance complained of.

102.On Mr Hung’s first point, the New Structures were clearly an interference with Bothlink’s exercise of its proprietary rights over the Wall.  In particular, the dense network of scaffolding and the huge advertisements displayed thereon completely obscured the Wall at the 4^th and 5^th floor levels, meaning that those floors could not be let out by Bothlink for advertising purposes.  This was the case whether some part of the bamboo poles of the New Structures (or the security camera, spotlight and wiring) touched the Wall or not.  Mr Ma accepted in cross examination that the 4^th and 5^th floor levels of the Wall were, commercially, the most valuable part of the Wall, and that Bothlink could not make any use of this part because of the presence of the New Structures.  It was Mr Leung’s evidence, and I accept, that he had been approached by advertisers, offering a high rent for the use of the upper floors of the Wall, but only on the condition that they would be able to use the 4^th and 5^th floor levels too — which Bothlink was unable to offer given the presence of the New Structures.

103.It was said by Mr Hung that Bothlink had not established a “right of giving uninterrupted view of the [Wall] to pedestrians”.  But Bothlink clearly had the right to use and enjoy its property, the Wall; and even on Mr Ma’s evidence, this right could not be properly exercised as a result of the presence of the New Structures.

104.As to the argument that the New Structures were no more than an exercise of proprietary rights by Bothlink’s neighbours, Mr Hung relied on what Lord Goff said in Hunter, supra, at 685:

“As a general rule, a man is entitled to build on his own land … Moreover, as a general rule, a man’s right to build on his land is not restricted by the fact that the presence of the building may of itself interfere with his neighbour’s enjoyment of his land. The building may spoil his neighbour’s view … it may restrict the flow of air on to his neighbour’s land … it may take away light from his neighbour’s windows … nevertheless his neighbor generally cannot complain of the presence of the building, though this may seriously detract from the enjoyment of his land.”

105.What Lord Goff said needs to be understood in the context of that case.  In Hunter, the complaint was that the defendants’ building interfered with the reception of television broadcasts in the plaintiffs’ homes.  There was no complaint in that case that the offending building had been constructed beyond the boundaries of the defendants’ land.  In the present case, the New Structures are located not only on the property of the owners of Units 3A, 4A and 5A and the 3/F Wall, but also extend to the space immediately in front of the Wall at the 4^th and 5^th floor levels.  It was not suggested by Convey that this space was also owned by the owners of Units 3A, 4A and 5A and the 3/F Wall.  Thus it simply cannot be said that the New Structures are no more than the exercise of these owners’ proprietary rights.

106.I next consider the issue of reasonableness.  Not every interference with a plaintiff’s enjoyment of rights is actionable in nuisance; it must be unreasonable.  See Sedleigh‑Denfield v O’Callaghan [1940] AC 880 at 903, per Lord Wright:

“It is impossible to give any precise or universal formula, but it may broadly be said that a useful test is perhaps what is reasonable according to the ordinary usages of mankind living in society, or more correctly in a particular society.”

107.Given that Bothlink was unable to use the most valuable part of the Wall because of the presence of the New Structures, and given that this also in practice prevented it from renting out the higher parts of the Wall, the interference with Bothlink’s rights is clearly unreasonable.

108.It was argued by Mr Hung that it was hardly for Bothlink to complain of unreasonableness when in the past the Old Structures had similarly obscured others’ property.  Insofar as it was being said that the past is a guide to what is reasonable in the context of the use of this particular external wall, however, the evidence (from Mr Ma) was that for the Old Structures, Convey had paid rent for Units 3A and 4A, so those owners would have in fact been compensated for the interference with their rights.

109.On the issue of causation, Mr Hung’s argument was that if Bothlink suffered loss and damage, this was not due to the way in which Convey had constructed the New Structures.  Instead, it was because after the renovation, Bothlink was not able to use the Wall in the way that it previously had, since:

(1) the Buildings Department had issued a building order (in 2004) requiring the demolition of the Old Structures;

(2) the Buildings Department’s current practice note placed restrictions on the dimensions of the structures which could be erected for the display of advertising and the way they could be mounted onto a building;

(3) the IO’s consent was needed for work involving the structural elements of the Building and the IO now took the position that Bothlink only owned the rendering layer of the Wall; and

(4) Bothlink had no right to block the windows of Units 3A, 4A and 5A.

110.Mr Law objected to this argument on the grounds that it was not pleaded; nor were many of the points either properly put to Mr Leung or covered in Convey’s witness statements so as to give fair warning that they were being relied upon. I agree that it is not open to Mr Hung to take this argument.  In its Amended Defence of 17 November 2014, shortly before the trial, Convey’s defence was that the New Structures were not affixed to the Wall and that they covered only the part of the Wall up to the 5^th floor level.  There was no suggestion of the positive allegations which are now sought to be advanced by Convey, namely, that it is legally and practically impossible for Bothlink to use the Wall for the erection of structures akin to the Old Structures or otherwise to display advertisements[9]. There was therefore no proper exploration of these matters in the evidence.  In particular:

(1) There was no evidence as to the depth of the Wall to which Bothlink’s ownership extended (as distinct from evidence that the IO had asserted, and Bothlink had denied, that it owned the structure of the Wall and Bothlink merely owned the rendering layer thereof).

(2) There was no proper exploration as to what forms of advertising could legally have been supported on Bothlink’s wall.  Whilst Convey’s valuer purported to give evidence that no projecting signboards could be erected on the Wall because it was not a load bearing wall, his qualifications to give this evidence were never properly established.

(3) There was no proper exploration as to whether, under the DMC, the IO could or would have withheld the consent said by Convey to be necessary if Bothlink had wanted to put up advertisements on the Wall.  Mr Leung said that he had received the necessary authorisation from the IO back in 1980 and that had he known that this might be an issue, he would have brought the relevant written authorisation to court.

111.Bothlink might have wished to call evidence about these matters, and to explore them in cross examination with Convey’s witnesses, had Convey pleaded that it was not the cause of Bothlink’s damage by reason of the fact that Bothlink was no longer legally or practically able to use the Wall to display advertising for profit.

112.In any event, the evidence which is available does not support Convey’s case that it is Bothlink’s inability to use the Wall for advertising, rather than the presence of the New Structures, which has caused loss and damage:

(1) Mr Ma accepted that the presence of the New Structures meant that Bothlink could not use the Wall, at least at the 4^th and 5^th floors.

(2) Mr Leung’s evidence was that there were advertisers interested in renting the Wall, but the obstacle was that Bothlink could not offer the 4^th and 5^th floors.

(3) The simple fact of the existence of the New Structures — which Convey’s valuer accepted were projecting signboards — shows that it is possible to erect projecting signboards at the location of the Wall.

(4) Mr Hung relied on clause 5 of Schedule 1 of the Deed of Mutual Covenant governing the Building to say that the IO had to consent to the erection of structures or the painting of the Wall.  But the clause also provided that consent would not be unreasonably withheld.  Whatever disputes may have passed between the IO and Bothlink in the past, this did not mean that Bothlink would not be able to get consent for the use of the Wall for displaying advertising.

(5) Whilst Bothlink did not have the right to block the windows of Units 3A, 4A and 5A, this had not prevented it from being able to rent out the Wall in the past for the display of advertising: the advertiser (Convey) had entered into the necessary arrangements with the owners of those units for the right to block the windows.

113.I therefore find that the New Structures were the cause of the damage of which Bothlink now complains.

114.Accordingly, in erecting and maintaining the New Structures, Convey is liable to Bothlink in nuisance, from 17 December 2010 onwards, and the nuisance is a continuing one.

F.  RELIEF

F1.  Delivery up of vacant possession

115.Bothlink seeks an order for the immediate delivery up of vacant possession of the Wall, and an order that Convey, at its own expense, do forthwith dismantle, pull down and remove so much of the New Structures, including all their components, supporting frames and elements and the displayed advertising signage(s) blocking or covering the 4^th and 5^th floors of the Wall; and do reinstate the damaged parts, if any, of the Wall.

116.Convey has not advanced any submissions against this in the event that I should find against it on the issue of liability.

117.I will grant the order against Convey accordingly.

F2.  Injunctive relief

118.Bothlink seeks an order against both King Glare and Convey (whether by themselves, their servants or agents or otherwise) to restrain them from repeating or continuing the nuisance constituted by the New Structures or any nuisance of a like kind.

119.No argument against the injunctive relief sought was advanced.

120.As I have found that it was Convey which erected the New Structures, I will grant the order sought against Convey.

F3.  Damages

F3.1  The Old Structures

121.I have found that both King Glare and Convey are liable in trespass for their failure to remove the Old Structures from the Wall, for the period from 1 July 2009 to 30 September 2009.

122.Bothlink is therefore entitled to mesne profits for King Glare’s and Convey’s wrongful use and occupation during this period.  Mesne profits should represent the fair value of the use of the Wall during the period.  Bothlink claims $108,000 per month, being the fee under the Licence.

123.Mr Billy Poon (for King Glare) argued that the Old Structures had no rateable value after 1 July 2009, as evidenced by the fact that the Rating and Valuation Department refunded rates to Convey for the period from 1 July 2009 onwards.  However, there was no evidence as to the basis on which the refund was sought and given.  In any event, the fact that a tenement has no rateable value does not mean that a trespasser derives no value from his use and occupation.

124.Convey has not advanced any argument in relation to the claim for mesne profits.

125.I consider that $108,000 per month is an appropriate measure to use, given that it reflects the value which King Glare had agreed, under the Licence, to be a fair value for use of the Wall.  Convey and King Glare had in fact between themselves agreed a higher value under the Sub‑Licences.

126.King Glare and Convey are therefore jointly and severally liable to Bothlink for mesne profits at the rate of $108,000 per month for the period from 1 July 2009 to 30 September 2009.

127.Bothlink accepts that it should give credit for the $180,000 deposit paid by King Glare.  It is therefore entitled to judgment for $144,000.

F3.2  The New Structures

128.In respect of the New Structures, Convey is liable to Bothlink in trespass and nuisance from 17 December 2010 onwards.

129.Bothlink seeks damages under either cause of action, claiming $107,800 per month, using the rental fee agreed between Convey and the IO for the 3/F Wall as a comparable.

130.Mr Hung argued that:

(1) The trespass was at most de minimis and entitles Bothlink to nominal damages only.

(2) At most, any calculation of damages (for either trespass or nuisance) should be based on Convey’s valuation evidence.

131.I do not accept that the trespass from the bamboo poles could be said to be de minimis.  Whilst the actual surface area of the Wall touched by the bamboo poles may not have been very large, such poles:

(1) were found throughout the scaffolding structure and so would have touched various parts of the Wall at different locations;

(2) were attached to and formed part of the overall scaffolding structure; and

(3) provided stablisation to the same.

The trespass was therefore a trespass by the entirety of the scaffolding structure.

132.As for the security camera, spotlight and associated wiring and pipe, whilst they were not physically attached to the New Structures, they formed part and parcel of Convey’s use of the Wall for the display of advertising, and should be considered in that context.

133.I therefore do not agree that the trespass by Convey sounds only in nominal damages.  Bothlink is entitled to mesne profits for the use and occupation of the Wall by the New Structures.

134.Bothlink is also entitled to damages for nuisance.  The measure of damages is the loss suffered as a natural consequence of the wrongful act of Convey: see Clerk and Lindsell on Torts, 21^st edn, paras 20–28.  This includes not only physical damage but also economic loss: see, for example, Dodd Properties (Kent) v Canterbury City Council [1980] 1 WLR 433.  In the present case, the loss suffered by Bothlink is the inability of Bothlink to rent out the Wall by reason of the presence of the New Structures.

135.On the issue of quantification, neither Bothlink nor Convey sought to draw a distinction between the measure of damages in trespass and the measure in nuisance.  Both parties focused on what the market rent of the Wall (or the 4^th and 5^th floors thereof) ought to be.

136.Convey relied on a valuation report from Mr Chan Yat Hei Jack (“Mr Chan”), whose view was that the monthly rent for the optimal advertising display boards which could be placed at the 4^th and 5^th floor levels of the Wall was $5,500 for the period 1 June 2009 to 31 May 2012; $6,900 from 1 June 2012 to 31 May 2015; and $7,700 from 1 November 2014 to 31 October 2017.  This was based on what was said to be the optimal advertising board layout for the 4^th and 5^th floors of the Wall, being two tall and narrow boards, one at the edge of the Wall near the north side of the Building (1.28m wide), and one at the other edge of the Wall near the south side of the Building (2.23m wide)[10].  Both of these boards were narrow as (1) on one side, they did not project beyond the edge of the building, and (2) on the other side, they did not extend beyond the edge of the window openings in the Wall.

137.Key to Mr Chan’s view was that the possibility of using the Wall for displaying advertising similar to that currently on display (namely that on the New Structures), or other projecting signboards, should be ignored in the valuation, as:

(1) this could only be achieved if a number of other owners in the Building (including the IO) agreed to the same;

(2) the Buildings Department’s new practice note required a projecting signboard to be built on a structural element of a building, but the west external wall of the Building was not a load bearing wall and could not support a projecting signboard; and

(3) there were window openings in, and pipes on, the Wall, so that the advertising could not cover these and instead would be restricted to the two sides of the Wall, away from the windows in the central area of the Wall.

138.I did not find these reasons to be a convincing or sufficient basis for not valuing the Wall on the basis that it could support projecting signboards or, indeed, other signboards wider than those proposed by Mr Chan.

(1) The fact that an advertiser who rented the Wall might need to make additional arrangements with owners of other units in the Building in order to put up a large advertisement which affects those other units does not mean that there is no value in using the Wall in this way.  That value might be more difficult to assess than the value of the narrow boards which Mr Chan has valued, but that is a different issue.  It is difficult to see how Mr Chan could have come to the conclusion that the narrow boards represent the “optimal” boards when he has not in fact compared the value of these boards to the value of alternative board layouts.

(2) As to whether the Wall could support a projecting signboard, Mr Chan said that he had looked at the building plans and found that the west external wall of the Building was not a load bearing wall.  However, Mr Chan’s qualifications for giving this evidence were never established.  Mr Chan was called to give evidence in his capacity as a valuer and not as a building surveyor.  Prior to his evidence, it had not been suggested that the west external wall was not load bearing (rather, Convey’s argument was that the IO had claimed the structural element of the wall as its own and had said that only the rendering belonged to Bothlink).

(3) As to the problems with the windows and pipes, it would surely be possible to use more of the Wall than two narrow the boards at the side, even without obscuring the windows, for example by attaching an adhesive advertisement with cut-out areas for the windows.  Mr Chan said that he had not considered this because he had not seen such advertisements in the area.  Thus his conclusion that the narrow boards are “optimal” was reached without a consideration of all possible configurations for advertising displays.

(4) Indeed, adhesive advertisements or painted advertisements would overcome not only Mr Chan’s configuration problem, but also the problem of multiple ownership and the problem of structure, since they would not obscure windows (and hence need cooperation from other owners) or require the affixing of structures to the Wall (and hence involve structural considerations).  Yet Mr Chan did not give any thought to them.

(5) Furthermore, even with a projecting signboard, the three problems identified by Mr Chan would not be insurmountable: the New Structures themselves surely provide an illustration of the possible use of the Wall for a projecting signboard which involves the cooperation of multiple owners, which complies with the Buildings Department requirements[11], and which obscures windows. It turned out that Mr Chan had not been told by Convey of the arrangements between Convey and the owners of Units 3A, 4A and 5A and the 3/F Wall which enabled the New Structures to be erected. But even when told of them, Mr Chan simply dismissed them out of hand as he said that (1) it was not his practice to use comparables from the same building, (2) the owners or Convey would have a “hope value” that the advertising display could be erected and therefore might not be agreeing a market rent. But it is difficult to see why, if a property has a particular feature which can be used for a valuable purpose, that feature should be ignored in valuation.  If the 3/F Wall can support advertising (whether on its own or in conjunction with other parts of the external wall), this is a feature of the property which ought to be taken into account in assessing its market value.  In any event, it is speculative for Mr Chan to say that the agreed rents contain some kind of “hope value” when he had not even been aware of them and had not investigated them.

139.I therefore do not find that the valuations arrived at by Mr Chan are helpful in assessing what the market rent of the Wall was during the relevant period.

140.Bothlink has submitted that one possible comparable to use in assessing the market rent of the Wall is the agreement between Convey and the owner of Unit 4A on 16 August 2012 for the right to install advertising light boards on the windows of Unit 4A, and to take the surface area of the Wall at the 4^th and 5^th floor areas as being 10 times the area of the Unit 4A windows (a proportion which Mr Chan had accepted).  However, I do not consider this to be a suitable comparable as what Convey would have been paying for would have been not only the right to install something on the outside of the windows but also the right to block the flow of light into Unit 4A, which does not arise in the case of the Wall.

141.Bothlink submitted that the best comparable to use is the agreement between Convey and the IO on 30 April 2008 for the rent of the 3/F Wall at $35,000 per month.  I agree.  The 3/F Wall was let to Convey for the purpose of displaying advertising, and it is located immediately below the 4^th and 5^th floor levels of the Wall.  It is therefore a suitable comparable in assessing what the 4^th and 5^th floor levels of the Wall would have fetched in the market were it to be let out for a similar purpose.  Mr Chan’s view was that it was not a suitable comparable as it had “hope value”; I do not consider this to be a good reason to reject the comparable for the reasons set out earlier.

142.The figure of $35,000 needs adjustment for (1) the size of the Wall, and (2) time.  As to (1), Bothlink did not seek to adjust for the entirety of the Wall, but just the 4^th and 5^th floors thereof, by multiplying the figure for the 3^rd floor by two.  As to (2), Mr Chan’s evidence was that for the two narrow advertising boards which stretched for the full length of the Wall, the rent would have increased by 54% between the period from (a) June 2009 to 31 May 2012 to (b) 1 November 2014 to 31 October 2017.  Applying these two adjustments to the figure of $35,000 gives a figure of $107,800 as the current market rent for the 4^th and 5^th floors of the Wall.  Mr Chan of course did not accept that the agreement for the rental of the 3/F Wall was a suitable comparable because of his views about “hope value”, but he did not disagree with the making of these adjustments in the event that the agreement was found to be a suitable comparable.

143.However, Bothlink is claiming mesne profits and damages for the period from December 2010 onwards.  The market rent which would have applied would not have been $107,800 per month throughout the entirety of the period, as this is a figure for current rent.  Applying Bothlink’s methodology, the market rent as at 17 December 2010 would have been closer to $70,000[12].  Assuming that the increase in rent of 54% over the period from 17 December 2010 to date took place evenly, then the mean figure of $88,900 per month[13] for the period from 17 December 2010 to date can be used to calculate mesne profits and damages for the period from December 2010 to the date of this judgment, with any further mesne profits and damages thereafter to be calculated at the current rate of $107,800 per month.

144.Convey is therefore liable to Bothlink for mesne profits and damages for the period from 17 December 2010 to date at $88,900 per month, and mesne profits and damages thereafter until delivery up of vacant possession of the Wall to be calculated at the current rate of $107,800 per month.

F4.  Interest

145.In respect of the Old Structures, Bothlink claimed interest at the judgment rate of 8% per annum, being the rate which had been applied in the partial judgment obtained by consent against King Glare earlier.

146.In respect of the New Structures, Bothlink claimed interest at half the judgment rate (4%) per annum on the basis that fees payable by Convey would have been on a monthly basis.

147.King Glare and Convey did not contend for the use of some other rate.  I will order interest at the rates claimed.

G.   CONCLUSION

148.I give judgment for Bothlink and make the following orders:

(1) Convey do immediately deliver up vacant possession of the Wall.

(2) Convey do at its own expense forthwith dismantle, pull down and remove so much of the New Structures, including all their components, supporting frames and elements and the displayed advertising signage(s) blocking or covering the 4^th and 5^th floors of the Wall; and do reinstate the damaged parts, if any, of the Wall.

(3) Convey, by its directors, officers, servants or agents or otherwise howsoever be restrained from maintaining or re‑erecting the New Structures, or structures similar thereto, which cover or obscure the 4^th and 5^th floor of the Wall from the view of passers‑by and/or road users in the vicinity of the Building.

(4) King Glare and Convey do jointly and severally pay to Bothlink mesne profits of $144,000, with interest thereon at 8% per annum from the date of the writ until the date of this judgment and thereafter at judgment rate until full payment.

(5) Convey do pay to Bothlink mesne profits and damages at $88,900 per month for the period 17 December 2010 to the date of this judgment, with interest thereon at 4% per annum from 17 December 2010 until the date of this judgment and thereafter at judgment rate until full payment.

(6) Convey do pay to Bothlink mesne profits and damages at $107,800 per month from the date of this judgment until delivery up of vacant possession of the Wall, with interest thereon at judgment rate from the due date of each monthly payment until full payment thereof.

149.There is no reason why costs should not follow the event, and I make an order nisi that King Glare and Convey should pay Bothlink’s costs, to be taxed if not agreed, with certificate for two counsel.

Mr Dennis Law and Mr Lawrence Cheung, instructed by W L Yuen & Co, for the plaintiff

Mr Billy Poon, instructed by Kam & Fan, for the 1^st defendant

Mr Andy Hung, instructed by Fan Wong & Tso, for the 2^nd defendant