LEUNG PING v. CHENG PAN

DCCJ 466/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 466 OF 2002

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REASONS FOR JUDGMENT

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1. I now give my reasons for the judgment that I have given in respect of this case on 10 December 2002.

2. This action arose out of a dispute between two owners in a building. The Plaintiff is the registered owner of the property known as the Ground Floor, No. 17 Hing Wah Street, Kowloon, Hong Kong ("the Plaintiff's Property"), whilst the Defendant is the owner of the Mezzanine Floor of the same building ("the Building"). At all material times, there was a cockloft erected in the Plaintiff's Property ("the Cockloft"). It is the Plaintiff's case that, on or about 1 February 1999, the Defendant had engaged some workers to carry out construction and renovation work inside the Cockloft, and so the Plaintiff brought the present action against the Defendant to claim for, inter alia, (i) a declaration that the Plaintiff was the rightful owner of the Cockloft; (ii) damages for trespass to the Cockloft; and (iii) an injunction to restrain the Defendant from occupying or carrying out any further construction or renovation work inside the Cockloft.

3. In the Defence and Counterclaim filed on 6 September 1999, the Defendant apparently was relying on the following two grounds of defence. Firstly, the Cockloft was an illegal structure, and so the Plaintiff was not entitled to enforce his right in respect of the same. Secondly, the acts complained of were necessary repair works done by the Defendant to comply with an order issued by the Building Authority under s. 26A of the Building Ordinance, Cap. 123, and this provides a defence to the Plaintiff's claim. Further, the Defendant also lodged a counterclaim against the Plaintiff for breach of clause 8 of a Deed of Mutual Covenant dated 8 February 1958 ("the DMC"), for constructing 4 shops in the open yard of the ground floor of the Building ("the Open Yard") by demolishing a non-loadbearing masoning fence wall and covering the Open Yard with metal roofing.

4. Quite a number of things have happened after the issuance of the Writ. Firstly, the Plaintiff has demolished the Cockloft. Secondly, the Plaintiff has complied with an order issued by the Building Authority and removed the metal roofing in the Open Yard. Further, in paragraph 5 of his witness statement, the Defendant concedes that the Plaintiff was the owner of the Cockloft. In view of such development, it would no longer be necessary for the court to grant the declaratory and injunctive relief as sought by the Plaintiff. Hence, so far as the Plaintiff's claim is concerned, the only remaining issues are damages and costs.

5. The parties agree on the evidence, and so all the witness statements and materials in the trial bundle are admissible without the necessity of calling individual witnesses to testify in the trial. Further, the Defendant also indicated that he was abandoning the second ground of defence, ie. the acts complained of were necessary repair works done by the Defendant to comply with an order issued by the Building Authority.

6. The remaining issue is therefore a simple one. It is common ground that the Cockloft was an illegal structure. According to Mr. Mui, counsel for the Defendant, the Plaintiff acquired the Cockloft from his predecessor in title. However, there was no agreement or assignment produced by the Plaintiff showing that the transaction included the Cockloft. On the other hand, if the conveyance of the Cockloft formed part of the transaction, the transaction itself was illegal and was contrary to public policy. Hence, Mr. Mui submitted, the court should not allow the Plaintiff to enforce his right in respect of the Cockloft.

7. In my judgment, Mr. Mui's argument is totally misconceived. Although the Cockloft was an illegal structure, it does not alter the fact that the Plaintiff was the rightful owner of the space occupied by the Cockloft. In maintaining the claim against the Defendant, the Plaintiff is only relying on his proprietary right in respect of such space, and the fact that the Cockloft was an illegal structure does not provide the Defendant with a defence. Indeed, in the case that Mr. Mui's argument is correct, it would virtually mean that if an owner erects an illegal structure inside his property, anyone can simply go into the property and occupy the illegal structure, as the court would not allow the owner to enforce his proprietary right in respect of the same. This simply cannot be right. Further, the Defendant admits in paragraph 5 of his witness statement that the Plaintiff was the owner of the Cockloft, and so it is not open to the Defendant to argue the contrary now.

8. It is common ground that the Defendant did engage workers to carry out construction and renovation work in the Cockloft as alleged by the Plaintiff, and so the Defendant had committed an act of trespass. So far as the quantum of damages is concerned, the Plaintiff has not produced any evidence to substantiate his claim on quantum. Despite that, I am of the view that the Plaintiff must have suffered some loss relating to the loss of use of the space occupied by the Cockloft. I therefore awarded nominal damages in favour of the Plaintiff.

9. In respect of the counterclaim, the Building Authority did take enforcement action against the illegal structure in the Open Yard. The Plaintiff eventually complied with the building order and removed the metal roofing therein. According to the Plaintiff, the Building Authority was satisfied that there was no more illegal structure in the Open Yard, and so there had been no further enforcement action ever since.

10. However, even if there was illegal structure in the Open Yard when the Defendant lodged the counterclaim, such counterclaim, which is based on clause 8 of the DMC, must fail for two obvious reasons. Firstly, the said clause 8 prohibits the contracting parties from, inter alia, making any structural alteration to the Building or damaging any of its main walls. Mr. Mui concedes that the work carried out by the Plaintiff in the Open Yard did not amount to structural alteration of the Building. Neither was there any evidence to prove that the non-loadbearing masoning fence wall was one of the main walls of the Building. Indeed, the fact that it was a non-loadbearing wall suggests the contrary. Hence, the Defendant has not discharged the burden of proving that the Plaintiff was in breach of any of the covenants contained in clause 8 of the DMC.

11. Secondly, the DMC relied upon by the Defendant was made in the year 1958 between the respective owners of the Mezzanine Floor and the 5th Floor of the Building, the former being the original developer. By the time when the DMC was made, the original developer had already divested itself of any interests of the Ground Floor of the Building. In such circumstances, the Plaintiff is neither a party to the DMC nor a successor in title to any of such parties, and so there is no binding covenant which can be enforced against the Plaintiff. Hence, the counterclaim must fail.

12. I then deal with the issue of costs in respect of the Plaintiff's claim. By reason of the supervening events, the court does not need to grant all the relief as sought by the Plaintiff. Nevertheless, the Defendant had committed an act of trespass and so the Plaintiff was justified in issuing the present proceedings against the Defendant. Indeed, the Court of First Instance, before the present case was transferred to the District Court, granted an interlocutory injunction against the Defendant from carrying out any further construction or renovation work in the Cockloft. Although the Defendant eventually admitted that the Plaintiff was the owner of the Cockloft, the Plaintiff still had to proceed with the action as the Defendant disputed that the Plaintiff was entitled to enforce his right in respect of the Cockloft. Neither did the Defendant indicate that he would pay for the costs of the Plaintiff already incurred. In such circumstances, the Plaintiff should be entitled to the costs of the claim. So far as the counterclaim is concerned, costs should follow the event and the Defendant should therefore pay for the costs.

13. Mr. Wong, counsel for the Plaintiff, asked for the costs to be paid on an indemnity basis. However, although the Defendant's argument is totally misconceived, I cannot say that the Defendant has been conducting the case in an unreasonable manner. Indeed, the Defendant did have some legitimate concern about the illegal structures in the Plaintiff's Property, which were the Cockloft and the metal roofing, and both had been demolished after the issuance of the Writ in the present case. Hence, I rejected the Plaintiff's request in this regard.

14. These are the reasons for the judgment. Finally, I must express my gratitude to both counsel for their able submission and the assistance that they have provided to this court.