CANADIAN OVERSEAS DEVELOPMENT CO. LTD. v. LEUNG SHEK MING

IN THE COURT OF APPEAL

1994, No.99
(Civil)

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J U D G M E N T

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Godfrey, J.A.:

1. The action out of which this appeal arises is an action about some land at Yuen Long in the New Territories ("the disputed land"). The dispute between the plaintiff and the defendant is a dispute over the boundaries of the disputed land. The statement of claim exhibits a plan which claims to show encroachment on the disputed land by the defendant.

2. The plaintiff's case is that the defendant has wrongfully entered and occupied a portion of the plaintiff's land abutting upon the defendant's land. The defendant, the plaintiff says, has erected fences and other structures on this portion of the plaintiff's land.

3. The plan to which I have referred shows the disputed land on which, it is said, the defendant has encroached, coloured in green. To the north and south, there are two substantial areas of land which have been called 'A' and 'B', and to the west, there is a slither of land between the boundary of the defendant's land (as the plaintiff claims it to be) and a nullah.

4. The proceedings have been unduly protracted and I have to relate something of their history.

5. The writ was endorsed with the statement of claim and filed on 14 August 1990. The defendant put in a defence on 12 September 1990. The defendant's defence (1) denied the encroachment; and (2) claimed that, if there had been an encroachment, the plaintiff was by its conduct estopped from asserting the fact against the defendant. The defence contains no positive averment as to the nature of the defendant's claim to maintain his fences and structures on the disputed land.

6. On 2 November 1990 the plaintiff took out a summons for directions in the action and on 29 November 1990 Master Chan made an order for further and better particulars of the estoppel defence.

7. On 4 December 1990 Master O'Donnell gave further directions in the action, including a direction as to exchange of lists of documents and a direction that "a report by (surveyors) be agreed if possible, and that, if not, the expert evidence be limited to one (1) witness for each party."

8. On 4 February 1991, the estoppel defence was struck out, the defendant having failed, despite an "unless" order made on 31 January 1991, to give the particulars ordered earlier. On 1 December 1992, Master Beeson ordered that the defendant's defence be struck out and dismissed and judgment be entered accordingly unless the defendant by 4 p.m. on 21 December 1992 complied with Master O'Donnell's order dated 4 December 1990 to serve the plaintiff with a list of documents and with an expert report "if the Defendant does not agree to the Plaintiff's expert report dated 22 November 1991."

9. On 19 December 1992 the defendant's then solicitors wrote to the plaintiff's solicitors a letter which stated:

"We confirm that the Plaintiff's expert report dated 22nd November 1991 is agreed by us."

For myself, I think it impossible to construe this letter, in the light of the events which preceded it, otherwise than as an agreement to the substance of the plaintiff's expert report, thus precluding by necessary implication any filing of expert evidence on the part of the defendant at any future stage of the action.

10. I regret that on this point I have to differ from Liu J who (in the judgment now under appeal to this court) took the view that this letter should be construed simply as an admission as to the admissibility and authenticity of the expert's report.

11. The plaintiff, having received the letter of 19 December 1992, treated it (in my view correctly) as an admission of the plaintiff's expert evidence. Indeed the plaintiff went one stage further; it came to the conclusion that, once the defendant had accepted the plaintiff's expert evidence, there was really nothing else left in the case. The estoppel issue had disappeared; and the plaintiff treated the rest of the case as, in effect, determined by the defendant's acceptance on 19 December 1992 of the plaintiff's expert evidence. Accordingly, the plaintiff, taking the view that there was now plainly no defence to the action, took out a summons for summary judgment under Order 14; and on 3 March 1994 Master O'Donnell gave judgment in favour of the plaintiff. The defendant appealed. The appeal came before Liu J who reversed the decision of the Master.

12. At the hearing before the judge, the defendant tendered his own expert evidence. This, in effect, admitted that there had been an encroachment and confined any dispute between the plaintiff and the defendant to the precise line of the boundary between the plaintiff's land and the defendant's land, which the defendant did not specify. I am quite satisfied on the totality of the material before this court that the defendant has, in these circumstances, failed to show any defence to the action. I would for these reasons be prepared now to give judgment for the plaintiff, reversing the order of the judge and restoring the order of the Master.

13. The order should provide for a declaration by the court as to where the boundaries of the disputed land are, in accordance with the plan annexed to the statement of claim, and require the defendant to remove from the disputed land any structure which he maintains upon that land.

14. The form of the order may take some consideration. I propose that counsel for the plaintiff be invited to settle the form of the order and to submit it to counsel for the defendant for his approval. When the form of the order is agreed between counsel the draft should be submitted for the approval of this court by lodgment in my chambers. If the form of order cannot be agreed, then the plaintiff should lodge a form of the order showing in red those parts of the form of the order which are in dispute, so that the case can be restored to the list for further consideration as to the form of the order.

Nazareth, J.A.:

15. By the time the O.14 summons came to be addressed by the Master and Liu J, the plaintiff relied primarily upon the defendant's solicitors' statement that the plaintiff's expert report was agreed. That report does on its face appear to establish the factual basis of the plaintiff's claim. However, Liu J, in his judgment, disposed of the point by taking the view that "agree" means and must be understood to mean "agreeing to authenticity and admissibility" alone.

16. What the defendant's solicitors said in their letter of 19 December 1992 was this:

"We refer to the Order of Master Beeson made herein on 1st December 1992 ...... we confirm that the Plaintiff's expert report dated 22nd November 1992 is agreed by us."

Looking at those words, I find it difficult to reconcile their plain meaning with the view taken by the judge. They seem to me to mean plainly what they say, i.e. that the plaintiff's expert's report was agreed in terms of substance. The defendant's subsequent action in pursuing the action, upon which the judge relied as otherwise amounting to an abuse of process, seems to me to be irrelevant, particularly as the defendant did not obtain and seek to put in an expert's report until about a year and half later.

17. However that may be, the context in which the defendant's solicitors' letter was written is most significant. On 4 December 1990, Master O'Donnell by order gave directions inter alia that:

"a report by (surveyors) be agreed if possible, and that, if not, the expert evidence be limited to one (1) witness for each party".

The defendant failed to comply and on 1 December 1992 Master Beeson ordered that his defence be struck out and judgment entered:

"unless the defendant by 4 p.m. on 21st December 1992 complied with Master O'Donnell's order dated 4th December 1990 to:

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(b) serve the Plaintiff with an expert report if the Defendant does not agree to the Plaintiff's expert report dated 22nd November 1991."

18. That was the context in which the defendant's solicitors' letter of 19 December 1992 was written, and it leaves no room for doubt that the words in question could have meant anything other than that the substance and contents of the plaintiff's expert's report was agreed.

19. It must follow that the judge was plainly wrong in his view. In turn, the result was that there was no defence to the claim in point of fact and evidence. I therefore agree with my Lord that the appeal should be allowed, and also concur in what he proposes.

Litton, J.A.:

20. I agree that the appeal must be allowed and have only one observation to make.

21. This case concerns a boundary dispute. Unlike most other matters coming before the courts, the outcome here inevitably turns upon the opinion of experts who, having studied the survey plan and other relevant material, would exercise their judgment and state where in their opinion the proper boundaries lie. The court would not find it possible to come to a true view in a case like this without the opinion of experts. Accordingly, when the defendant by his solicitor's letter dated 19 December 1992 said that the plaintiffs' expert report was agreed, he was in effect admitting that there was no further defence to the action. The plaintiffs could at that stage have taken out a summons under Order 27 rule 3 of the Rules of the Supreme Court for judgment by admissions. But in the circumstances of this case, the course adopted by the plaintiffs in issuing an Order 14 summons was, in my judgment, not erroneous. At the stage when the application for summary judgment was made, 1 November 1993, the plaintiffs were plainly able to state on affidavit that they verily believed that there was no defence to their claim: Order 14 rule 2(1).

22. For these reasons, I agree with the orders proposed by my Lord Godfrey, J.A. The form of relief would, as he suggests, need fine-tuning. I agree that the mechanism for the working out of the order should be as he has proposed.