WONG PUI WAN v. WONG WING KWONG AND OTHERS

DCCJ 118/2014

[2019] HKDC 14

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 118 OF 2014

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DECISION

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INTRODUCTION

1.  Following the delivery of judgment herein on 12 February 2018 (“the judgment”), the defendants took out 4 summonses:-

(1) for variation of costs order nisi dated 23 February 2018 (“the 1^st summons”);

(2) for amendment, review and variation of the sealed copy   judgment dated 10 May 2018 (“the 2^nd summons”);

(3) for amendment of the 1^st summons dated 12 June 2018; and

(4) for supplementation of the 2^nd summons dated 24 July 2018.

THE VARIATION OF COSTS APPLICATION

2.  I shall first deal with the variation of costs application.

Legal principles on costs

3.  Deputy District Judge Elaine Liu in Jiang Zhong v Up Cheer Ltd, DCPI 2047/11, 18 April 2016, unreported, has usefully summarised the legal framework in relation to the question of costs, which I gratefully adopt:-

“8. The court has a wide and unfettered discretion on the decision of costs. Section 53(1) of the District Court Ordinance provides that:-

“The costs of and incidental to all proceedings in the Court … are in the discretion of the Court, and the Court has the full power to determine by whom and to what extent the costs are to be paid.”

9. The powers and discretion of the court as to costs under section 53 shall be exercised subject to and in accordance with Order 62 of the Rules of District Court (See Order 62 rule 2). The discretion shall be exercised judicially.

10. The relevant factors in Order 62 rule 5 that this court shall take into account are:-

“(aa) the underlying objectives set out in Order 1A, rule 1;

…

(e) the conduct of all the parties;

(f) whether a party has succeeded on part of his case, even if he has not been wholly successful”

11. The conduct of the parties include:-

“(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;

(c) whether a claimant who has succeeded in his claim, in whole or in party, exaggerated his claim; and

(d) conduct before, as well as during, the proceedings.”

(Order 62 rule 5(2))”

4.  In the context of the parties settling the matters in dispute short of a trial, I find the summary of the relevant principles by Au-Yeung, J in Famous Marvel Co Ltd & ors v Conversant Group Ltd & ors, HCA 2153/2009, 29 October 2012 (unreported) instructive, which I also gratefully adopt:-

“22.  There is no dispute that even if a case is settled except as to costs, the Court still has power to determine which party should be liable for costs. There is no tradition for there to be “no order as to costs” in such a scenario. I am guided by the following principles in deciding costs:

(i) The Court is to decide if the party seeking costs has substantially obtained the reliefs sought in the litigation: Re Chinese United Establishment Ltd, HCCW 291/1994, 5 October 1995; Lai Yuet Chun v Super Deluxe International Limited & ors, HCCW 186/2001, 3 June 2003 Kwan J (as she then was).

(ii) At each end of the spectrum there will be cases where it is obvious which side would have won had the substantive issues been fought to a conclusion. In between, the position will, in differing degrees, be less clear. How far the Court will be prepared to look into the previously unresolved substantive issues will depend on the circumstances of the particular case, not least the amount of costs at stake and the conduct of the parties. Brawley v Marcynski (No.1) [2003] 1 WLR 813.

(iii) The Court will first consider if it is in a position to say what the likely outcome after trial would have been. If it is not in a position to do so, the order may well be no order as to costs: Brawley v Marcynski (No.1), at para 18, Longmore LJ; followed in BCT Software Solutions Ltd v C Brewer & Sons Ltd [2004] FSR 150.

(iv) The Court may permit parties to adduce evidence on the question of costs: Ta Tung China & Arts Ltd v Fontana Restaurant Ltd [1999] 1 HKLRD 404; Lai Yuet Chun v Super Deluxe International Ltd & ors, at para 12. However, to say that the parties must go to trial in order to resolve any outstanding questions of costs would be contrary to the underlying objectives enshrined in RHC Order 1A rules 1 and 2: Graham M Morley v Kwan Wo Wan & others, HCA 4366/2003, 30 December 2009, Recorder Jat SC.

(v) A broad brush can be taken by referring to all matters already laid before the Court, eg pleadings, correspondence, witness statements, transcripts of evidence and the terms of the settlement order: c.f. BCT Software Solutions Ltd v C Brewer & Sons Ltd, at para 9; Graham M Morley v Kwan Wo Wan & others.

(vi) The objective is to do justice between the parties without incurring unnecessary Court time and consequently additional cost: Brawley v Marcynski (No.1).”

Costs of the disputed issues

5.  In the judgment, I considered that the plaintiff was the major winner and therefore made an order nisi that the defendants should pay 50% of the plaintiff’s costs of this action.

6.  By their application, the defendants asked that the plaintiff should pay 20% of their costs in this action.

7.  Mr Andrew Mak, counsel for the defendants, relying on Poon Ching Man v Lam Hoi Pun [2016] 3 HKLRD 815 and Golden Bright Manufacturer Ltd v Sunlight Electronic Toys Manufacturing Co Ltd, HCA 927/2001, 8 November 2007 (unreported), submitted that in assessing the percentage of costs of the party who is entitled to costs, the court should assess the amount of time spent on the issues in dispute.

8.  I have no doubt that the amount of time spent by the receiving party on the issues in dispute is a way of assessing the percentage of entitlement.

9.  At the trial, there were 2 main issues in dispute, namely, the adverse possession issue and the easement issue.  In relation to the adverse possession issue, the defendants have only succeeded in part, ie the land whereon the disputed hut was erected.  The defendants have failed on the easement issue.

10.  It is true that the adverse possession issue had taken more time both in terms of evidence and trial time.  It is also true that within the adverse possession issue, more evidence was adduced in relation to the disputed hut.  However, this does not mean that the battle on the disputed hut had occupied the majority the of evidence and trial time.  This can be readily reflected in the judgment. 

11.  In assessing the percentage of costs entitlement, I have indeed taken the above factors into account.

12.  In the affirmation of the 2^nd defendant, he set out an estimation of the works done by his lawyers on all the issues (including the drainage issue which was settled by way of a Tomlin Order) in the action. I do not think such estimation is of assistance to the defendants.  Firstly, the input of works on the various issues depends on the approach of the handling lawyers and the strategy deployed.  Hence, the work inputs on different issues in the same case may vary from lawyer to lawyer.  There is no place for a straitjacket.  Indeed, the approach adopted by lawyers for one side should not be the same as those for the other side.  More importantly, when assessing the percentage of entitlement, the court is looking at the case objectively as a whole and the degree of success of the winning party.  The decision must reflect where justice lies on the question of costs.

13.  Here, the plaintiff had succeeded in part of the adverse possession claim and had successfully defended the easement claim.  Had he not failed to claim possession of the disputed hut, he should be entitled to recover the whole of his costs.  In my view, therefore, the order nisi that I have made is doing justice to both parties and is appropriate.

Costs of the settled issue

14.  Turning to the question of costs in respect of the settled issue, ie the drainage claim, the 2^nd defendant deposed that “since the plaintiff objected to the right of drainage of the defendants, the Tomlin Order means the defendants had won”.

15.  It is necessary to examine the pleaded case of the plaintiff.

16.  In the statement of claim, the plaintiff said his permission to the 1^st and 2^nd defendants was to build the drainage works on his land, ie Lot 611BRP, according to a plan numbered SF01B which was registered in the Land Registry (“the plan”).  However, they had constructed 2 manholes on Lot 611BRP which were not in accordance with the plan.  Further, the defendants had built a large water pipe which was not in the plan.  Waste water from the pipe flew onto the plaintiff’s land with bad smell^[1].  He therefore prayed for an order that the 1^st and 2^nd defendants “to remove and or reinstate all structures which are not included in the plan as registered under the memorandum”.  The gist of the plaintiff’s complaint is that the defendants did not build the drainage works on his land according to the approved plan.

17.  The settlement agreement between the parties on the drainage claim is in the following terms:-

“(1) The Defendants and/or any of their assigns or successor-in-title in Lot 856 of DD 216, whether by their agents, representative, nominee, contractors and/or workers shall perform the following works, which the Plaintiff consents, namely,

(a) to demolish the Existing Drainage System built on Lot No. 611 S.B. RP not in accordance with the Building Works Plan with number SF/01 (Revision B) as approved by the Building Authority, that is, as shown at page 745 of Trial Bundle 4 (“the Plan”) and

(b) replace the same with drainage system (“the Approved Drainage System”) including but without limitation to those parts at the Disputed Land, and the Lower Part of Lot 611 SBRP (which is highlighted in yellow in page 419 of Trial Bundle 2)(“the Lower Part of Lot 611 SBRP) in accordance with the Plan,

at the Defendants’ costs within 12 months from the date of written approval of the Defendants’ application to be made within reasonable time for the works specified in Paragraph (1) hereof to be granted by the Building Authority and/or any relevant Government authority (where applicable).

(2)  The Plaintiff shall allow the Defendants and/or the Defendants’ agents and/or workers to have easement and the right for carrying out and maintaining the Approved Drainage System specified in Paragraph (1) hereof at the Disputed Land and the Lower Part of Lot 611 SBRP and/or rights of ways, in, through or over the Disputed Land and the Lower Part of Lot 611 SBRP for the said purposes, at the costs of the Defendants”

18.  To my mind, the agreement is an total acknowledgement of the case of the plaintiff, namely, that the defendants had failed to build the drainage works according to the plan and the defendants have undertaken to rectify the mistake by demolishing the wrongful works and to rebuild the drainage works in accordance with the plan at their costs.  The assertion of the 2^nd defendant is therefore factually unsustainable and must be rejected.

19.  It is also necessary to examine the defence of the defendants to the drainage claim.

20.  The defendants did not dispute that they had caused drainage works to be done on Lot 611BRP.  They said they did so because they were already in adverse possession of the said land and that the plaintiff’s right and title thereon had extinguished^[2].  The defendants also alleged that when they carried out ground-based measurements, soil investigation and testing on the said land in 2006 without first obtaining the consent of the plaintiff, the plaintiff raised no objection at all^[3].  Further, upon the objection raised by the defendants, the plaintiff abstained from placing stones on the said land when he was building a house on Lot 612 between 2009 and 2010^[4].  Lastly, the defendants alleged acquiescence on the part of the plaintiff^[5] and entitlement to an easement of drainage^[6] since the early 1960s.

21.  It is common ground that the drainage works complained of were done on the disputed open space adjoining the disputed hut.

22.  The main thrust of the defence is that the defendants had adversely possessed the disputed open space since the early 1960s.  This accounted for the inaction of the plaintiff when the defendants made use of and the plaintiff’s own refraining from using the disputed open space.

23.  Needless to say, this line of defence stands or falls together with the defendants’ claim of adverse possession of the disputed open space.

24.  For reasons stated in the judgment^[7], the defendants’ claim on the disputed open space has failed.  The natural consequence is that if the drainage claim is put on trial, this line of defence would also fail as a matter of course.

25.  In relation to the defence based on easement, it seems that the defendants are not relying on the rule in Wheeldon v Burrow but the doctrine of lost modern grant.

26.  The fallacy of the defence is that the land of the defendants, namely, Lot 856, is not adjoining Lot 611BRP.  It has to be remembered that by a condition of exchange dated 16 December 2003, when the Government granted Lot 856 to Wong WC, the 1^st and 2^nd defendants as tenants-in-common in equal shares in exchange of Lot 610B2, a small piece of government land was created between Lot 856 and Lot 611BRP.  The drainage pipes of the houses on Lot 856 have to firstly pass through the said piece of government land before reaching Lot 611BRP.  That being the case, I have grave doubt that the defendants would succeed on the claim of easement over Lot 611BRP if this issue is put on trial.

27.  The above analysis has driven me to the conclusion that the defendants would not be entitled to costs on the drainage claim.

28.  Taking into account the substantial overlapping of the adverse possession claim and the drainage claim, the overall costs apportionment should shift in favour of the plaintiff to a small extent.  On this note, I tend to agree with Mr Erik Shum, counsel for the plaintiff, that the award of 50% of the total costs to the plaintiff is already very generous to the defendants.

29.  I therefore dismiss the defendants’ application for lack of merits.

THE AMENDMENT APPLICATION

30.  The amendment application can be disposed of briefly.

31.  At paragraph 130 of the judgment, I held that the plaintiff’s title to Lot 611BRP whereon the disputed hut was built as depicted in Plan 1 attached to the re-re-amended defence and counterclaim was extinguished.  At the same time, I ordered that vacant possession of the area in Lot 611BRP outside the disputed hut be delivered to the plaintiff.  This conclusion was reached after considering all the evidence and applying the relevant principles in law.  In my judgment, the defendants had adversely possessed the disputed hut, no more and no less.

32.  Having delivered the judgment, this court is functus officio.  Any party who is dissatisfied with the judgment may seek leave to appeal.

33.  The concern of the defendants is this. The triangular area immediately outside the entrance to the disputed hut is within the boundary of Lot 611BRP, which, by the force of my judgment, was not adversely possessed by the defendants.  For that very reason, possession of the said triangular area should be delivered to the plaintiff.  This has created a practical difficulty to the defendants as far as the use of the disputed hut is concerned.

34.  It is suffice for me to repeat that the conclusion that I have reached was after due consideration of the evidence and the relevant principles in law.  The sealed judgment has rightly and accurately recorded the effect of my judgment.  There is no room for me to reconsider, amend, supplement or otherwise alter the said judgment.  The effect of my judgment may have caused difficulty to the defendants in using the disputed hut which they have adversely possessed.  Be that as it may, that is something they have to live with if they do not seek to overturn the findings of this court by way of appeal.  After all, it is not the function of this court to give a judgment which does not accord with the evidence and the law in order to suit the need of one of the parties.

35.  By reasons of the aforesaid, the defendants’ amendment application must be dismissed.

COSTS

36.  I order that the defendants do pay the plaintiff costs of the 4 summonses with certificate for counsel, to be taxed if not agreed.