FASTWAY (H.K.) INVESTMENT LTD v. WING BO MOTOR CO

DCCJ3507/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3507 OF 2008

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BETWEEN

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D E C I S I O N

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1.  This is the application taken out by the defendant to re-amend the amended defence and counterclaim.  The plaintiff objected to this application.  The defendant avers that the re-amendment is required to clarify the matters in the defence. The amendment of the defence and counterclaim was made on 15 June 2011 (hereinafter I refer to as “the June version”). 

2.  Now, the first thing I will have to deal with is the proposed paragraph 2 of the re-amended defence.  The proposed re-amendment is, “And the house erected thereon, which was partitioned into four separate/ independent units, known as Nos. 45, 46, 47 and 48, Ha Han Village, Ting Kok Road (referred to as ‘House 45’, ‘House 46’, ‘House 47’ and ‘House 48’ respectively herein below).”  Is the proposed amendment under this paragraph required?   We look at the June version.  Now, the meaning of the premises is referred to under paragraph 2.  It reads: “The premises known as Remaining Portion of Lot No. 197, the Remaining Portion of Lot No. 198, the Remaining Portion of Lot No. 210, section B of Lot No. 211 and section AB of Lot No. 213 in Demarcation District, Tai Po, New Territories, Hong Kong (‘the Premises’).”  So the Premises under this paragraph cover the various remaining portions and lots referred to under paragraph 2.  But then under 5(d) of the June version, it appears that there is another meaning given to the term “the premises”.  5(d) reads, “During the period from around 1980 to 2002, Lee had also used the adjacent houses (namely Houses 46, 47 and 48) and adjacent lands (namely the Premises) as his own for his car repair business without the owner’s authorization.”

3.  What is the ambit of the term “adjacent lands” under 5(d)?  It is not clear.  It appears that it does not include Houses 46, 47 and 48.  This is apparent from the context of paragraph 5(d).    So clarification is required to show the relationship between 45, 46, 47 and 48 and the Premises.

4.  Under paragraph 5(b) and 5(c), House 45 is referred to there.  Under 5(b), the defendant says, “Lee entered into a written tenancy agreement with the Landlord of the Premises in 1984, whereby the House known as House 45, Ha Hau Village, Ting Kok Road, Tai Po, New Territories, Hong Kong (‘House 45’) was leased to Lee.”  It is not clear what is the relationship between the premises and House 45. 

5.  The question is: does House 45 form part of the premises or not?  5(b) and 5(d) need to be clarified to show the relationship between the Premises and Houses 45 to 48.  Under the proposed re-amended defence, such relationship is clarified; so the amendment is a necessity.  The proposed re-amendment under paragraph 5 of the proposed re-amendment simply concerns material fact which does not deviate from the June version.

6.  Now, the next thing is of some importance.  The plaintiff complains that from the June version, paragraphs 7, 8 and 10 have been omitted from the proposed re-amendment.  The plaintiff says that the omission of paragraph 7 amounts to a withdrawal of admission.  Paragraph 7 reads, “In reliance of the Tenancy Agreement, the Defendant had performed the following substantial improvement to the Premises”, and there (a) to (f) have been set out relating to the particulars of the improvement work.

7.  The tenancy agreement referred to under paragraph 7 was covered by paragraph 6. Paragraph 6 reads: “In or about February 2002, an oral tenancy agreement (‘the Tenancy Agreement’) was made between the Landlord and the Defendant in respect of House 45 and House 46.”

8.  Now, under paragraph 7, can it be said that it is an admission of occupation of the relevant parts of the Premises by consent from the landlord so that there cannot be any claim of adverse possession?  According to the tenancy agreement, the tenancy only covers House 45 inclusive of farmland and House 46.  But according to paragraph 7, it says, “In reliance of the Tenancy Agreement, the Defendant had performed substantial improvement to the Premises.”  That is illogical because the tenancy agreement only covers House 45 and House 46.  How can occupation of the other parts of the premises, apart from House 45 and House 46, be related to the consent given by the landlord of the tenancy -- of the land owner?   That cannot be.

9.  Now, paragraph 7, in my judgment, only says because of the existence or entering of the tenancy agreement relating to House 45 and House 46, the defendant spent money in making substantial improvement to the Premises, covering, say, House 45, 46, covered by the tenancy agreement as well as to House 47, House 48 and, say, open space, I think, marked A by the defendant.  Now, this only explains why the defendant performed the substantial improvement to these houses and the open space.

10.  In my judgment, the spending of money for the substantial improvement or the substantial improvement to the premises cannot be construed by implication that consent to occupy House 47 and House 48 had been obtained by implication in the mind of the defendant from the plaintiff.  They are two different matters. Making substantial improvement to the premises is one thing; whether the defendant was occupying the relevant houses pursuant to consent operating in the mind of the defendant is another. 

11.  The phrase “in reliance of the tenancy agreement” must be construed strictly and cannot be expanded so that it is related to the occupation by consent from the landlord.  The defendant did not say so.  So it cannot be an admission of occupation of the relevant houses as interpreted by the plaintiff.  The omission or the deletion of this paragraph would not be a withdrawal of admission.

12.  In my judgment, paragraphs 7, 8 and 10 construed together would give the impression that the defendant spent $800,000 because of the existence of the 10-year tenancy which was a fixed term tenancy and is not a monthly tenancy.  That is what he is saying in those paragraphs.  I think that these several paragraphs are totally unnecessary for the defence case in relation to adverse possession.  So the deletion of these several paragraphs would not bring any prejudice or harm to the plaintiff. 

13.  Now, the plaintiff also complains that the amendment was firstly not coupled with explanation.  Now, there are two situations; one, the defendant took the initiative to ask the lawyer to make amendment to their case, to their defence and counterclaim is one thing; the other thing is or the other scenario is, the lawyer took the initiative to make clarification in the defence.  Pleading is another thing. 

14.  I do not know exactly the situation here because reading the affidavits from the Lee brothers, I cannot get a clue there to answer this question.  But Mr Miu explains that, you know, the re-amendment application is necessary to clarify matters.  I agree, because, simply, even for the term “premises” in the June version, it is not clear, and in the course of trial it needs to be clarified, and then the relationship between the premises and Houses 45 to 48 needs to be clarified in the sense that amendment would have to be made as a matter of necessity.  I do not think the cases cited to me by the parties are directly on this point.  Because of the matters I said here, I allow the re-amendment application and so I make

an order in terms of this summons.