SUNBROAD HOLDINGS LTD v. ALL OCCUPIERS (whose names are unknown) AND OTHERS

CACV 120/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 120 OF 2011

(ON APPEAL FROM HCMP NO. 1852 OF 2008)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.  The subject matter of this appeal concerns an external wall which separated the building at No. 15 Pak Sha Road, Causeway Bay, Hong Kong from a scavenging lane at the junction with Yun Ping Road. This appeal concerns that part of the external wall which has been coloured blue on the Plan which is annexed to this judgment ("the Blue Wall"). The Plaintiff is the registered owner of the ground floor of the building of which the external wall forms part.

2.  The 3^rd Defendant is a cobbler who operates a stall which is located opposite to the External Wall.  He has constructed certain structures at the Blue Wall.

3.  The Statement of Claim was issued on 19 August 2009.  On 16 September 2009, the 3^rd Defendant filed a Defence & Counterclaim.  Essentially, the 3^rd Defendant claimed that by virtue of section 17 of the Limitation Ordinance (Cap 347), the Plaintiff's title to the Blue Wall or any part thereof:

"16   … has been extinguished and the 3^rd Defendant has acquired all the possessory right, title and interests, including the right to exclusive physical occupation of the Blue Wall."

4.  There is a counterclaim by the 3^rd Defendant for declarations to similar effect. 

5.  On 24 June 2011, Mr Recorder A Chow, SC gave summary judgment to the Plaintiff against the 3^rd Defendant.  He also struck out the 3^rd Defendant's counterclaim against the Plaintiff.

6.  This is how the learned recorder described the structures that were erected by the 3^rd Defendant:

"5.   The Structures were erected by the 3^rd Defendant.  According to the 3^rd Defendant:-

(1) In around 1972, he constructed a small metal box (the 'Small Metal Box') on the External Wall for storage of shoes pending customers’ collection and as a show case for leather belts and other goods.

(2) In around 1984, he constructed a large metal box (the 'Large Metal Box') on the External Wall above the Small Metal Box for the same purpose.

(3) In around 1986, he constructed a canopy (the 'Canopy') above the aforesaid 2 metal boxes to protect them from sunlight and rain.

(4) The Small Metal Box, the Large Metal Box and the Canopy make up the Structures complained of by the Plaintiff in this action.

6.   It is not in dispute that the 3^rd Defendant erected the Structures, which are physically attached or affixed to the External Wall, without the consent, licence or permission of the Plaintiff, or its predecessors in title.  It is the 3^rd Defendant's contention that from around 1972, he has been in exclusive possession of and has been using the External Wall without the consent or licence or permission in whatever form of the owner of the External Wall, such that he has acquired a good title to the External Wall by adverse possession."

7.  The learned recorder identified the main issue between the parties as:

"20.   … whether, as a matter of law, the concept of 'adverse possession' can apply to a vertical plane or surface such as the surface of the External Wall in the present case."

8.  He held that that it was not possible.  He accepted that as a matter of principle.  He referred to Midland Railway Company v Wright [1901] 1 Ch 738 where Byrne J at 744 said:

"… it is necessary that whatever is acquired by means of this exclusive possession should be measurable by precise metes and bounds and in some way cubically. …"

9.  But as the learned recorder correctly pointed out in para 22 of his judgment, "Byrne J was there merely summarising counsel’s argument without expressing his concurrence with (it)".

10.  Mr Horace Wong, SC, who together with Ms Jane T C Ho, appeared for the Plaintiff on appeal, has referred us to Leung Kwok Kau v Tam So Wa [1968] HKLR 673.  There the question was whether a lease of the surface of the outer wall of a building could be created.  The Full Court held that it could not.  Their lordships explained why:

"… A corporeal hereditament … has always included an area of the surface of the earth or of some horizontal plane either below, or in a building erected above, the surface of the earth.  The area need not be large, but it must have some substance. …" Per Huggins J held at 680.

"… It is possible to grant a lease of a wall but that is because a wall is situated on the ground and in effect a lease of a wall is a lease of the ground on which the wall is standing together with the wall itself.  However, this is not to say that there can be a tenancy of the surface of a wall by itself as was argued in this appeal.  I do not think that that is possible.  The surface of a wall of its very nature has no depth, it is not standing on any part of the ground: and therefore it cannot in my view be the subject matter of a lease." Per Briggs J held at 675.

"… In the absence of a defined portion of the soil, to which a letting can be distinctly related, no lease or tenancy can arise.  Where the subject matter of an alleged lease or tenancy is but the bare surface of such a wall, it has no width or breadth of soil to support it, as a lease or tenancy.  No estate or interest in land is created; I use the word 'land' in its widest sense. …"  Per Mills-Owens J at 679.

11.  With respect, I agree that just as there could not a lease of the surface of a wall, there could be no adverse possession of such surface. 

12.  The learned recorder then dealt with another argument relied on by Mr Liu (for the 3^rd Defendant) that the 3^rd Defendant had adversely possessed the Blue Wall to half of its thickness, which the learned recorder also rejected.  I agree with the learned recorder that one could not infer from the fact that the 3^rd Defendant had attached or fixed certain structures to the Blue Wall and used those structures for a long time, that the 3^rd Defendant had taken adverse possession of half of the Blue Wall to the exclusion of the Plaintiff; or that the 3^rd Defendant had intended to exclude the Plaintiff from having the use or possession of half of the thickness of the Blue Wall.

13.  On appeal, Mr Liu sought to argue that even if the surface of the Blue Wall could not be regarded as "land" for the purpose of the Limitation Ordinance, insofar as its structures had been attached to the Blue Wall by means of nails or screws, there had been adverse possession to the thickness of such nails and screws.  This is a new argument.  The 3^rd Defendant's pleaded claim related to the entire Blue Wall and there was no claim that insofar as there were nails or screws in the Blue Wall, there had been possession of the Blue Wall to the extent of their intrusion.  Nor do we know whether the structures were attached to the Blue Wall by nails and/or screws, or if so, how many of either.

14.  Nor has this argument been raised in the Notice of Appeal although it has been referred to obliquely in Mr Liu's skeleton submission, where in para 14 he said:

"14 In other words, D3 have not only been in possession of the surface of the External Wall, but have also been in the possession of the thickness of the External Wall to the extent that 'infrastructures' are therein."

15.  Earlier in para 13, he referred to the fact that the metal boxes must have been annexed to the Blue Wall by some "'infrastructures' (including screws and nails)". 

16.  That being the case, I do not believe it is right to permit the 3^rd Defendant to raise this argument.

17.  Then Mr Liu sought to rely on the doctrine of lost modern grant in response to the Plaintiff's argument that the 3^rd Defendant's right to use the surface of the Blue Wall was at most an incorporeal hereditament.  He submitted that since the external wall has been providing support to the two metal boxes, the right of having the external wall to support the two metal boxes is an easement, which could be acquired by 20 years uninterrupted enjoyment.  Chung Yeung Hung and Others v Law Man Nga and Anor t/a Constant Rich Investment Co [1997] HKLRD 1022. 

18.  In this context, Mr Liu submitted that on the facts, the 3^rd Defendant must be taken to have acquired a possessive title over the scavenging lane, therefore he could be regarded as the owner of the dominant tenement.

19.  As the learned recorder pointed out in para 19 of his judgment, he did not know:

"19. … whether the scavenging lane is a public lane and who is the owner of the scavenging lane. …"

20.  The claim to an easement was not raised in the defence nor before the learned recorder.  Mr Liu is raising a new point which is fact sensitive on appeal which normally would not be permitted: Flywin Co. Ltd v Strong & Associates Ltd (2002)5 HKCFAR 356.

21.  As noted, there is no evidence regarding the ownership of the scavenging lane.  There has been no application to adduce additional evidence on the point, which in any event, probably would not have succeeded.  See the dictum of Lord Bridge in Langdale v Danby [1982] 1 WLR 1123 at 1133B – F cited in 58/1/3 of the Hong Kong Civil Procedure 2012.  Essentially, Mr Liu was asking us to allow the appeal so that the 3^rd Defendant might raise the defence on lost modern grant if he could prove that he had acquired adverse possession or possessive title over the scavenging lane.  I do not believe that is permissible.

22.  For the above reasons, we have dismissed the appeal with costs.