MAK KAM CHUEN v. TRIPLE JOY INVESTMENTS LTD AND ANOTHER

HCA1508/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1508 OF 2011

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D E C I S I O N

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1.  The plaintiff seeks an injunction restraining the defendants from interfering with his enjoyment of land allegedly acquired through adverse possession. At close to the end of her submission, Ms Yan, counsel for the plaintiff sought to amend the summons to set out the reliefs claimed more clearly. This was not opposed by the defendants. Accordingly, this judgment is based on the summons as amended.

BACKGROUND

2.  Shau Ki Wan Lot No. 104 is divided into, amongst others, Section L and Section M which are adjoining sections.  On these Sections are erected two 7-storey buildings known as No. 395 Shaukiwan Road (“Building No. 395”) and No. 393 Shaukiwan Road (“Building No. 393”) respectively.  Stretching out from the external walls (“the external walls”) at the rear of the 2 Buildings were open grounds forming part of Sections L and M (“the open grounds”).  Part of the open grounds formed common area whilst part was not.  Beyond the open grounds was Church Lane. 

3.  Prior to 1979, one Mr Lau Fai and then Mr Liu Wang Lau used a part of the open grounds to run a coffee house. 

4.  On 2 June 1979, the plaintiff took over possession from Mr Liu.  He has since used a part of the open grounds as a workshop (“the workshop”) to carry on the business of decoration work and production and sale of furniture.  The workshop was covered by a canopy (“the canopy”) mounted against part of the external walls to the 2 Buildings, supported by 2 vertical zinc metal sheets and 6 poles erected on both sides (“the supporting structure”). A metal gate which led to the common rear staircase of the 2 Buildings was blocked by the workshop.  On the internal wall (“the internal wall”) above this metal gate, the plaintiff has erected a cupboard about 2.5 metres above ground level.  For 32 years, he has allegedly continuously and openly been in possession of the workshop and hence acquired possessory title.

5.  For all practical purposes, the defendants and one Keen Mega International Limited had, by 2011, acquired ownership of all units in the 2 Buildings for redevelopment purposes. 

6.  In May 2011, employees or agents of Richfield Realty Limited made brief enquiries with the plaintiff about acquisition of the workshop. 

7.  On 31 August 2011, agents of the defendants produced to the plaintiff, amongst others, 2 notices issued in 2007 and 2010 by the Building Authority and attempted to demolish the huts (including the workshop) erected on Church Lane.  The plaintiff’s son (“the son”) told the agents that he needed to investigate that and to find a lawyer.

8.  On 1 September 2011, the agents of the defendants forcefully demolished the canopy and supporting structure without the plaintiff’s consent.  The tangible items of property (“the tangible items”) inside the workshop remained on the open grounds.

9.  On 2 September 2011, agents of the defendants placed a notice on the open grounds demanding that all items and vehicles be removed from Church Lane by 12 noon on the following day or they would be removed without further notice.  The defendants also erected metal pillars, one of which was within the workshop area.

10.  The plaintiff obtained an ex parte injunction on 3 September to restrain the defendants from removing his tangible items, interfering with his use of the land known as 15 Church Lane as depicted in a photograph and demolishing the external wall of Building No. 393 below the canopy.

11.  On 16.9.2011, the return day of the summons, Yam J ordered, amongst others, that the defendants be restrained from interfering with the plaintiff’s use of the land in front of Nos. 13 and 15 of Church Lane, of 4.1 metres in width and 4.5 metres in depth, as depicted in the area enclosed by points A, B, C and D in the surveyor’s map dated 14.9.2011 at the back of the external wall of Building No. 393. He also ordered reinstatement of a temporary canopy covering the area.

12.  On 24.10.2011, the plaintiff amended the writ to claim possessory title over the open grounds and the external walls of the Buildings in Sections L and M (collectively “the subject property”) an easement of support for the canopy, and possessory title to the internal wall, a wider area than that depicted in Yam J’s order. 

13.  The defendants dispute the claim on the ground that there was no evidence of exclusive possession by the plaintiff.  They counterclaimed for vacant possession of the subject property, damages for trespass, and an order that the temporary canopy be demolished. 

14.  By the amended summons, the plaintiff seeks an injunction restraining the defendants from:

(1) interfering with the plaintiff’s occupation of or, demolishing  or changing the state of the open grounds, the external walls and the internal wall;

(2) removing his tangible items placed on the open grounds;

(3) removing his overhead canopy; and

(4) obstructing his access to Sections L and M along Church Lane.

THE LEGAL PRINCIPLES ON INTERLOCUTORY INJUNCTIONS

15.  The general principles laid down in American Cyanamid v. Ethicon Ltd [1975] AC 396 are not in dispute.  It has to be shown that:

(A) there is a serious question to be tried;

(B) that damages will not provide adequate remedy; and

(C) the balance of convenience lies in favour of granting an injunction. 

(A)     Serious Question to Be Tried

16.  This issue turns on whether the plaintiff can establish adverse possession on the merits.  The plaintiff has the burden of showing both factual possession and the requisite intention to possess, i.e. an intention  in one’s name and on one’s own behalf to exclude the world at large, including the owner: Wong Tak Yue v. Kung Kwok Wai & Anor (No. 2) (1997-98) 1 HKCFAR 55.

17.  It is possible to adversely possess part of a stretch of wall: Prudential Assurance Co Ltd v Waterloo Real Estate Inc [1999] 17 EG 131. 

18.  Alternatively, the plaintiff’s exclusive possession of the subject property gives rise to an easement of support from the internal wall and the external walls for the canopy and the supporting structure which were attached to it.  In Bond v. Nottingham Corporation [1940] Ch 429, 438,  Sir Wilfred Greene MR said,

“The nature of the right of support is not open to dispute. The owner of the servient tenement is under no obligation to repair that part of his building which provides support for his neighbour. He can let it fall into decay. If it does so, and support is removed, the owner of the dominant tenement has no cause for complaint. On the other hand, the owner of the dominant tenement is not bound to sit by and watch the gradual deterioration of the support constituted by his neighbour’s building. He is entitled to enter and take the necessary steps to ensure that the support continues by effecting repairs, and so forth, to the part of the building which gives the support. But what the owner of the servient tenement is not entitled to do is, by an act of his own, to remove the support without providing an equivalent. There is the qualification upon his ownership of his own building that he is bound to deal with it, and can only deal with it, subject to the rights in it which are vested in his neighbour.”

19.  These propositions of law are not in dispute.  Mr Nip’s main bone of contention is that there is no serious question to be tried. He points to:

(1)     the plaintiff’s evolving and inconsistent cases;

(2)     the lack of intention to have exclusive possession; and  

(3)     the lack of documentary evidence.

The Plaintiff’s Evolving and Inconsistent Cases

20.  Mr Nip highlights to the vague descriptions of the land claimed:

(i) In the writ of summons, the land was described as part of the external wall of Building No. 393 as depicted in a photo and the subject property corresponded to the width of the external walls. There was no reference to Building No. 395.

(ii) In the present summons for injunction, the plaintiff refers additionally to the external wall of Building No. 393 and No. 15 Church Lane. 

(iii) At the hearing before Yam J, the area delineated by points A, B, C and D according to the surveyor’s map was wholly within the confines of Section M behind Building No. 393. 

(iv) In the amended writ and the statement of claim, the plaintiff seeks possessory title over the open grounds, external walls and internal wall, which cover a much wider area falling within both Section L and Section M.

21.  Moreover, the plaintiff relied on an agreement executed in 1978 between his predecessors Mr Lau and Mr Liu (“the agreement”) to show possession since 1978.  That agreement only mentioned No. 395 but not No. 393 Shaukiwan Road.

22.  Mr Nip submits that the plaintiff’s case was contradicted by the evidence he himself produced.

23.  In my view, one must look at the whole circumstances to decide if the plaintiff’s case is credible.  Things moved very quickly over a matter of days starting from 31 August.  Before the plaintiff could go to court, his workshop was demolished by the defendants.  The plaintiff was doing his best to put together his case in very pressing circumstances.  Even the surveyor’s report submitted before Yam J was a preliminary one.  The plaintiff’s case has, however, always centred on the workshop depicted in the photos.  His case “changed” only to reflect the proper delineation of the subject property by the surveyors. 

24.  Possession of the agreement and the subsequent agreement between the plaintiff and Mr Lau clearly showed the continuous possession from at least 1978.  The lack of reference to Building No. 393 in the agreement may be a matter for cross-examination at trial.  However, from the photos and surveyor’s reports produced by the plaintiff, it was clear that the workshop spread across the open grounds abutting both Buildings and from the aerial photos, it might have been there since 1981. 

25.  I am not satisfied that there were inconsistencies in the plaintiff’s case or that they have the effect of undermining its credibility.

Lack of Intention to Have Exclusive Possession

26.  I will deal individually with the open grounds, the external walls and internal wall. 

27.  Enclosure of a property is the strongest possible evidence of adverse possession and the potency of such evidence of enclosure is premised entirely on the fact that the true owner is intended to be excluded.  Cheung Chung Yan v. Chan Man Kwong & others, unrep, CACV268/2003, 12.2.2004, at para 18,Mr Justice Ma, CJHC (as he then was).

28.  By way of example, lack of fencing of an “outer area” to a lane and lack of fencing so as to let people pass through were held to be insufficient to found adverse possession of the lane: Kam To Pui v. The Incorporated Owners of Lux Theatre Building & Ors,unrep, HCA646/1996, 20.9.2000,Deputy Judge Longley; Lee Theatre Realty Ltd v. Tong Wah Jor & Ors, unrep, HCA1251/2003, 1.12.2009,Deputy Judge Carlson.

29.  With regard to the open grounds, the workshop was unfenced in the front.  From the photos, there did not even appear to be a chain to prevent the tangible items from being removed.  Anyone could walk in and out of the workshop area, or park a car there over the part not occupied by the tangible items.

30.  The defendants aver that neighbours or visitors dumped construction waste and miscellaneous objects at the open grounds and parked their cars there, which was denied by the plaintiff.  According to the plaintiff’s evidence, which I accept, such dumping, parking of outsiders’ cars without the plaintiff’s consent, putting sand on Church Lane allegedly to repair it, implementation of the notices of the Building Authority and the notice from the Food and Environmental Hygiene Department had not occurred before but all “coincidentally” happened after the demolition of the supporting structure.  It was more likely than not that they were high-handed acts of the defendants or their agents to create nuisance with a view to making it impossible for the plaintiff to use the subject property.

31.  Using the open grounds for a workshop is not sufficient.  Paving them to make it more comfortable to use is equally not sufficient.  No doubt the lack of fencing at the front of the workshop was for practical reasons – so that the space could be used for making furniture and parking of vehicles.  However, it constitutes a great hurdle in the plaintiff’s case – there was nothing to show that the whole world was excluded from the open grounds, let alone the real owner.

32.  The defendants also refer to the plaintiff’s need to rent a store room at a building diagonally across Church Lane.  This, Mr Nip submits, shows that the plaintiff was aware that outsiders had unrestricted access to the workshop and so he had to incur expenses to rent a store room to secure his belongings.  This, in my view, is more a matter for cross-examination as it is the plaintiff’s case that the workshop is for his business whereas the storeroom is for the furniture of his family.  It does not affect my view that the plaintiff has been in continuous possession for 32 years.  

33.  The external walls and internal wall stand on a different footing.  The canopy was cemented to a part of the external walls. It is difficult to conceive what “fencing” would further be required to exclude the real owner from that part of the external walls.  Moreover, a photo shows that the part within the workshop area had not been painted like other parts of the external walls.  It was clear evidence that the plaintiff had been in possession of that part.  Likewise, one can hardly gain access to part of the internal wall without removing the cupboard.

34.  Whether the canopy or the cupboard is of a similar nature to “fencing” to establish adverse possession is a matter to be decided at the trial.  At this stage, taking the plaintiff’s case at the highest, there is a serious question to be tried on adverse possession of the external walls and internal wall and easement of support. 

No Documentary Evidence from the Plaintiff

35.  None of the plaintiff’s family members or apprentices had given an affirmation.  Mr Nip has ably pointed to the lack of evidence of a longstanding business at the workshop.  There  were no tax returns, business registration certificates, contemporaneous photos, signboards of the business, correspondence sent to and from that workshop, to name a few. 

36.  When asked by one Mr Choy, an estate agent to produce proof of ownership (probably with a view to making compensation), all that the plaintiff could produce was a notice dated 8.9.1975 which required the occupants of the land in front of No. 15 Church Lane to cease occupation of the canopy. 

37.  The defendants had criticized this lack of documentary proof at the hearing before Yam J.  Despite the opportunity to file 2 further affirmations, all that the plaintiff could produce were 5 telephone bills issued between 1991 and 1995 to him.  Even so, those telephone bills were not issued to the workshop address but to a cockloft at No. 15 Church Lane.  They did not even mention that the telephone lines were used at the workshop.  Although the plaintiff explained that since 1979 he had extended a telephone wire from the cockloft to the workshop, there was no proof e.g. in the form of photos.

38.  This line of submission is certainly weighty in relation to the claim over the open grounds but not the external walls or internal wall. 

39.  The strength of a case is clearly a relevant factor in deciding whether to grant an injunction.  If the case is weak, it may tip the scale against the grant of one: Centalic Technology Development Ltd v Worldwide Industrial Ltd [1996] 3 HKC 498, at 510D-F, per Godfrey JA.

“When a judge is called on to exercise his discretion whether to grant or refuse an interlocutory injunction, he has to decide which course is the more just and convenient; and the interests of justice require him to have regard, among other things, to the strength of the applicant’s case. If in a case like the present, the judge forms the view that if the action were to go to trial the applicant would succeed, or would probably succeed, in obtaining a permanent injunction, that is a powerful consideration in favour of granting the interlocutory relief sought. If the judge forms the view that the applicant would not succeed, or would probably not succeed, in obtaining a permanent injunction at the trial, that is a powerful consideration against granting such relief.”

40.  In this case, the strength of the plaintiff’s case as regards the open grounds is weak but there is a serious question to be tried in relation to the external walls and internal wall.

(B)     Will Damages Be An Adequate Remedy?

41.  Where damages will be an adequate remedy, the court may refuse to grant an interlocutory injunction: American Cyanamid v Ethicon Ltd [1975] AC 396,at 408 - 409,

“As to that, the governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff’s undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.

… The extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies; and if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party’s case as revealed by the affidavit evidence adduced on the hearing of the application.  This, however, should be done only where it is apparent upon the facts disclosed by evidence as to which there is no credible dispute that the strength of one party’s case is disproportionate to that of the other party.  The court is not justified in embarking upon anything resembling a trial of the action upon conflicting affidavits in order to evaluate the strength of either party’s case.”

42.  The plaintiff has not produced evidence as to how its business was affected by the demolition of the workshop, whether he can operate elsewhere and how demolition of the external walls and internal wall may affect him. 

43.  The plaintiff admitted that he had received a phone call from Mr Choy to negotiate the acquisition of his workshop and the price.  As the plaintiff only just recovered from colon cancer, he asked Mr Choy to discuss the matter of compensation with the son.  The son did call Mr Choy and suggested a price in the region of $1,600,000 to $1,800,000.  Mr Choy said he had to discuss with the developer but never returned call after seeking proof of ownership.  The defendants’ evidence, however, was that the son asked for $6,000,000 from Mr Choy. 

44.  It is not necessary to resolve whose version is more believable.  What is clear is that the plaintiff or the son was open to giving up possession upon compensation.  If the plaintiff can establish his case, he can be adequately compensated for by damages.  The defendant will be in a position to pay them as revealed by the fact that the 2 Buildings are unencumbered.

45.  On the other hand, if an injunction is to be granted, the plaintiff suggests that he should not be required to give an undertaking as to damages.  Ms Yan relies on the authority of Allen and others v. Jambo Holdings Ltd and others, [1980] 1 WLR 1252at 1256H – 1257B, per Lord Denning MR:

“There is one other point that I must mention. It is said that whenever a Mareva injunction is granted the plaintiff has to give the cross-undertaking in damages. Suppose the widow should lose this case altogether. She is legally aided. Her undertaking is worth nothing. I would not assent to that argument. As Shaw L.J. said in the course of the argument, a legally aided plaintiff is by our statutes not to be in any worse position by reason of being legally aided than any other plaintiff would be. I do not see why a poor plaintiff should be denied a Mareva injunction just because he is poor, whereas a rich plaintiff would get it. One has to look at these matters broadly. ”

46.  With respect to Ms Yan, Allen v. Jambo is not an authority in support of the proposition that a legally aided applicant is spared from the need to give an undertaking as to damages.  Even if it were otherwise, the plaintiff has not shown himself to fall under the principles enunciated in that case.  He has only applied for legal aid and has not yet been granted it. There is no other proof that he is impecunious.

47.  The correct interpretation of Allen v. Jambo has been stated in The Queen on the Application of William Ellson v. London Borough of Greenwich, Lane Castle, [2006]EWHC 2379,at para 13 and 17, Burton J:

“13. … What [Allen v Jambo] decided was that a legally aided plaintiff would be likely to be someone who had no assets, and that the fact that someone with no assets would not be good for the cross-undertaking in damages should not prevent the grant in an appropriate case of an injunction in that person’s favour, albeit it would always be a matter to be taken into account. Thus a claimant seeking an injunction who has legal aid is not absolved from the giving of an cross-undertaking in damages. That, in my judgment, would be quite inappropriate. All claimants obtaining cross-undertakings, with the possible exception of the government, are expected, and required, to give a cross-undertaking. The issue would be that it would known that, although they were putting on line all the assets that they had, thus showing how strongly they felt about the claim that they were seeking to make, they would not in practice be able to meet the damages. That would be a factor to be taken into account.

…

17.     None of that prevents the grant of an injunction, but they are factors to be taken into account.  The lack of compensability for the second defendant of the detriment to which I have referred means – and Mr Clayton did not dissent from this proposition – that the arguability of his claim must be the more carefully considered.  A claim which is just about arguable might be permitted to forward if the court could be comforted by knowing that, if the grant was wrong, then the loss would either not be great or would be easily compensable.  If there is no such comfort for the court, then the arguability of the case must be looked at the more stringently.”

48.  If the application for legal aid can be construed as an admission of impecuniosity, it is likely that the plaintiff will not be able to comply with the undertaking as to damages or fortify his undertaking. In view of the weakness in the plaintiff’s case over the open grounds, this cannot allay the court’s concern that the plaintiff may not be able to compensate the defendants for their losses they might suffer as a result of the grant of the injunction.  Accordingly, if an injunction is granted, an undertaking as to damages from the plaintiff is inevitable.

(C)     Balance of Convenience

49.  Mr Nip refers to the unreasonable behaviour of the plaintiff and hardship on the defendant if an injunction is granted.

50.  The plaintiff unreasonably blocked the rear staircase, which was in breach of Regulations 14 and 15 of the Fire Services (Fire Hazard Abatement Regulation).  The grant of an injunction would be condoning his illegal behaviour.  To this, the plaintiff’s answer is that residents in the 2 Buildings have all moved out by April 2011.  The defendants have not shown who might be subject to such fire hazard.  I place very little weight on this line of submission.

51.  Mr Nip also submits that delay in recovery of possession may cause them hardship as the scale of redevelopment would involve 35,000 square feet.  The plaintiff and his neighbours are aware of this.  The short answer is that there is no evidence that any plans for redevelopment have been approved or will be implemented in the near future.  There is no urgency shown in demolition of the subject property.  I place little weight on this line of submission.

Exercise of Discretion

52.  The plaintiff has shown a serious question to be tried in relation to his possessory title over part of the external walls and the internal wall but not the major part of his claim over the open grounds. However, his loss can be compensated for by damages which the defendants will be in a position to pay.  His ability to pay damages to the defendants if an undertaking is to be given, has not been shown to be of value.  Balancing all factors, I am of the view that an injunction under paras 14(1) and (4) above should not be granted. 

53.  In relation to removal of the plaintiff’s tangible items, the defendants have not removed those items despite giving (insufficient) notice.  Therefore the injunction to be granted under para 14(2) above would be for the defendants not to remove the plaintiff’s tangible items placed on the open grounds without giving at least 28 days’ notice (given the intervening holidays and the health condition of the plaintiff).

54.  In relation to para 14(3) above, Mr Nip asks for an order that the temporary canopy to be removed.  He submits that regardless of the outcome of this litigation, the plaintiff has to comply with government regulations. 

55.  There is a dispute between the parties as to whether the section 24C notice issued by the Building Authority was directed towards the canopy (as suggested by the defendants) or another structure above the ground floor shop of Building No. 395 (as suggested by the plaintiff).  The plaintiff’s daughter has clarified with the Building Authority and the plaintiff’s suggestion is tenable in view of the wording of the section 24C notice.  Since no injunction will be granted in relation to the plaintiff’s occupation of the subject property and the plaintiff has not shown how the canopy is of use to him as a stand-alone item, there is no reason to grant the injunction under para 14(3).  The temporary canopy should be removed. 

COSTS

56.  The defendants are largely successful and prima facie costs should be to them.  However, I take into account the fact that the highhanded manner of demolition had caused this application.  The surveyors had to refer to marks on the external walls to “work out” the area covered by the workshop.  But for the ex-parte injunction, the making of the surveyor reports and preservation of evidence for the plaintiff’s case would have been rendered more difficult.  It was not unreasonable for the plaintiff to take out the injunction application in the first place.  Accordingly, the defendants should only be granted costs after the filing of the 2^nd affirmation of the plaintiff (which contained the surveyor’s report).  The rest should be in the cause. 

CONCLUSION

57.  I order as follows:

(i) There be leave to amend the summons in the manner as set out in paragraph 4 of Ms Yan’s skeleton submission.

(ii) The defendants are restrained from removing the plaintiff’s tangible items placed on the open grounds without giving at least 28 days’ notice.  The amended summons is otherwise dismissed.

(iii) The temporary canopy shall be removed.

(iv) Costs of the ex-parte and inter-parte applications up to and including the 2^nd affirmation of the plaintiff filed on 24.9.2011 shall be in the cause.  Costs thereafter shall be to the defendants in any event. 

58.  I thank counsel for their assistance.