ELIAS NEIL DAVID AND ANOTHER v. CHENG SUI CHU AND OTHERS

CAMP 174/2019

[2020] HKCA 31

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 174 OF 2019

(ON AN INTENDED APPEAL FROM DCCJ NO. 2148 of 2016)

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JUDGMENT

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Hon Chu JA giving the Judgment of the Court:

1.  This is the 1^st and 2^nd defendants’ renewed application for leave to appeal against the judgment of Acting Chief District Judge Ko (as he then was, “the Judge”) given on 19 December 2018^[1] (“the Judgment”), whereby they were ordered to pay damages to the 1^st and 2^nd plaintiffs in the sum of $40,000 and their counterclaim was dismissed.[2]  

2.  By a decision given on 15 July 2019^[3] (“the Leave Decision”), the Judge refused to grant leave to the 1^st and 2^nd defendants (collectively “the defendants”) to appeal against the Judgment.  By summons filed on 29 July 2019, the defendants sought to renew in this Court their application for leave to appeal. 

3.  Having considered the defendants’ written statement in support of the application, the plaintiff’s written statement in opposition and the materials placed before us, we are of the view that it is appropriate to exercise the power under Order 59, rule 2A(5)(a) of the Rules of the High Court, Cap 4A to determine the present application without a hearing on the basis of the written submissions only.  We set out our decision below.

The dispute

4.  The plaintiffs formerly were the owners of a house known as “House 61” in Tai Yeung Che, Tai Po.  The adjacent house known as “House 60” was previously owned by a Ms Susan Fitzgerald (“Susan”). 

5.  The 1^st defendant is the wife of the 2^nd defendant.  The 2^nd defendant was one of the owners of a piece of land adjacent to House 60 and House 61 (“the Land”). 

6.  It is not disputed that on 27 May 2010, the 1^st defendant, acting on behalf of the 2^nd defendant, entered into an agreement with Susan (“the Head Lease”) to lease the Land to Susan for a term of 10 years.  Under clauses 22 and 23 of the Head Lease, the first 5 years of the term was a fixed term, and starting from 1 January 2016, either party may by giving one-month notice in writing terminate the agreement.

7.  The plaintiffs’ case is that Susan sub-let a portion of the Land to them.  They had used the Land as the backyard of House 61 and cultivated it and made improvements thereon.  It was also their pleaded case that they had on 26 February 2016 delivered up the portion of the Land to the defendants.  They claimed that beginning early March 2016, the defendants committed the following acts of nuisance that affected their quiet enjoyment of House 61^[4]:

(1) Erected barbed wire fence and hung dead fishes on the fence causing obnoxious smell to spread to House 61 and creating unpleasant sight for the plaintiffs;

(2) Dumped rubbishes, dead fishes, and other unknown chemical materials producing nauseating smells on the Land;

(3) Placed a large glass door on the Land that reflected light and flare into the study room of House 61;

(4) Ploughed up the Land and demolished all the plants thereon; and

(5) Put up signs on the Land.

8.  The defendants, on the other hand, contended that the plaintiffs had since 1 January 2016 committed trespass as they were no longer entitled to use the portion of the Land adjacent to House 61. The defendants’ pleaded case was in two alternatives.  The first is that there was an oral agreement between the 1^st defendant and Susan under which Susan would not sub-let the Land, and the sub-lease created by her was a breach of the oral agreement and was accordingly invalid^[5] (“first alternative case”).  The second is that in about March 2015, Susan agreed with the 1^st defendant to terminate the Head Lease upon the expiry of the fixed term on 31 December 2015^[6] (“second alternative case”).

9.  As to the plaintiffs’ complaint of nuisance, the defendants case is that^[7]:

(1) They admitted the erection of barbed wire fence and salted fishes were hung on it, but denied the salted fishes had emitted any obnoxious or nauseating smell;

(2) They admitted they had buried dead fishes on the Land, but denied that this gave off any nauseating smell. They also admitted applying fertilizer on the Land, but said they stopped doing this since 26 April 2016;

(3) They admitted a door with mirror was placed on the Land, which they averred was to scare off or prevent birds from damaging the crops on the Land;

(4) Ploughing up the Land was a reasonable use of the land and did not cause nuisance; and

(5) The signs were not intended to cause nuisance.

10.  The defendants counterclaimed for damages occasioned by the plaintiffs’ demolition of the barbed wire fence and the wooden fence between January and February 2016.^[8]

The Judgment

11.  The trial lasted five days, during which the Judge heard evidence from both plaintiffs, Susan, the 1^st and 2^nd defendants, the 1^st defendant’s nephew, and the current owner of House 60. 

12.  At [34] of the Judgment, the Judge identified four issues that were required determination, namely:

(1) Whether the plaintiffs are liable in trespass;

(2) Whether the plaintiffs are liable for removing the fence;

(3) Whether the defendants are liable in nuisance; and

(4) If any of the above was answered in the affirmative, the quantum of damages to be awarded.

13.  On Issue (1) trespass, in addition to the first and second alternative cases as set out in [8] above, trial counsel for the defendants sought to raise a third alternative case (“third alternative case”) in the closing submission, namely, the 1^st defendant had in March 2015, with Susan’s consent, served a notice to quit to terminate the Head Lease on 31 January 2016.  The Judge refused to allow the defendants to run argument, given that it was neither pleaded nor put to Susan during cross-examination. 

14.  The Judge did not accept the first alternative case that there was an oral agreement between the 1^st defendant and Susan prohibiting subletting of the Land.  The Judge accepted Susan’s evidence that the defendants raised no objection to the sub-letting, and further held that the defendants would have waived the breach, if any, by receiving rent from Susan after the sub-lease between Susan and the plaintiffs was created. 

15.  The Judge also rejected the second alternative case that the 1^st defendant and Susan had agreed to terminate the Head Lease on 31 December 2015.  The Judge considered this to be inconsistent with the WhatsApp exchanges between the 1^st defendant and Susan on 16 March 2015.  The Judge was of the view that the WhatsApp exchanges did not indicate there was prior conversation between them on early termination of the Head Lease.  The Judge found that terminating the agreement on 31 December 2015 was only a suggestion of the 1^st defendant, who was under a misapprehension that the Head Lease ended on 31 December 2015 with an option to renew for another 5 years.  The Judge also did not accept the argument that Susan’s payment of eight months’ rent up to 31 December 2015 was indicative of her agreeing to terminate the Head Lease upon the expiry of the fixed term.   

16.  On Issue (2) the removal of the fences by the plaintiffs, the Judge held that the defendants failed to establish any right over the fences.  As the defendants had no immediate right to possession over the fences, and no right to claim reinstatement of the fences, the counterclaim was dismissed.

17.  On issue (3) nuisance, the Judge held that the plaintiffs failed to prove nuisance in respect of the rubbishes dumped on the Land, the putting up of signs on the Land, and the ploughing on the Land.  The Judge, however, found that the hanging of dead fishes that produced an unpleasant sight and gave off an obnoxious smell had substantially interfered with the plaintiffs’ enjoyment of House 61.  Based on the 1^st defendant’s admission, the Judge found the defendants to have use fish guts to make “fertilizer” on the Land.  Relying on the Incident Report prepared by Hong Kong Fire Services, the Judge further found that three buckets of excreta emitting obnoxious smell were found on the Land.  The Judge held this to have interfered with the plaintiffs’ use and enjoyment of House 61 for a few days.  The Judge concluded that the defendants had committed acts of nuisance.  Having considered the authorities, the Judge awarded damages in the sum of $40,000.

The defendants’ application for leave to appeal

18.  In the draft notice of appeal attached to the summons, the defendants advanced the following grounds of the appeal, which are the same as those argued before the Judge in their application for leave to appeal:

(1) The Judge erred in finding there was no agreement between the defendants and Susan to terminate the Head Lease by the end of 2015.

(2) The Judge erred in ruling that there was no plea of the defendants’ notice to terminate the agreement on 1 February 2016.

(3) If either (or both) of the above grounds was/were made out, the Judge erred in finding the defendants had no right to claim for reinstatement of the fences.

(4) The Judge erred in holding that the hanging of salted fishes constituted an act of nuisance.

(5) The Judge erred in deciding that the placing of three buckets of substance on the Land constituted an act of nuisance.

(6) The award of $40,000 as damages for nuisance was excessive.

Applicable legal principles

19.  Under section 63A(2) of the District Court Ordinance, Cap 336, leave to appeal may only be granted if the Court of Appeal is satisfied that the intended appeal has reasonable prospect of success or that there are some other reasons that the intended appeal should be heard.  Reasonable prospect involves the notion that the prospect must be more than fanciful without having to be probable: see SMSE v KL [2009] 4 HKLRD 125 at [17].

20.  The Court of Appeal had repeatedly held that it would not disturb findings of fact of the trial judge unless they were shown to be plainly wrong.  In the absence of palpable errors in the judge’s consideration of the evidence, the court would not interfere with the assessment of evidence and the weight the trial judge attached to a particular piece of evidence: see Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336; China Gold Finance Ltd v CIL Holdings Ltd CACV 11/2015, 27 November 2015; Hoptai Sharkfins Co Ltd v Productos Pesqueros Gallegos SL CACV 240/2014, 7 December 2015.  Examples of palpable errors include overlooking critical evidence, or misunderstanding the evidence, or making a finding that was not supported by any evidence: see Au Yeung Miu Sim v Tsang Kwong Wai & Anor [2004] 2 HKLRD 187 at 194J – 195A.

21.  It is also well established that whether there are acts of nuisance is a question of fact: see Century Way Investment Ltd v Willbert Limited & Anor [2019] HKCA 739 at [4.3] citing Oliver J in Stone v Bolton [1949] 1 All ER 237.

Our decision

Ground (1): Was there an oral agreement to terminate the Head Lease by end of 2015?

22.  Ground (1) relates to the Judge’s rejection of the defendants’ case that there was an oral agreement between the defendants and Susan to terminate the Head Lease on 31 December 2015.  The defendants raised a number of criticisms.  First, it was said that the Judge mischaracterized the WhatsApp messages between the 1^st defendant and Susan on 16 March 2015 in that in the messages, Susan only raised the possibility of early termination of the Head Lease, instead of making a request for early termination.  Second, it was also said that the Judge ignored the prior conversations between the parties, as well as overlooked various passages contained in the witness statements. Third, the defendants complained that the Judge was wrong in his view that the 1^st defendant misapprehended the terms of the Head Lease.  Alternatively, it was said that the Judge erred in failing to consider that the Head Lease was void by reason of the defendants’ mistake.

23.  The defendants’ criticisms under this ground of appeal must be viewed in context.  The defendants’ pleaded case is that the 1^st defendant had agreed with Susan that the Head Lease would terminate on 31 December 2015.^[9]  In examination-in-chief, Susan denied there was such an agreement^[10].  In cross-examination, counsel for the defendants put to Susan that the agreement could be inferred from the WhatsApp exchanges she had with the 1^st defendant,^[11] to which Susan disagreed.  Susan explained that, at the material time, she wanted to sell House 60, thus she wanted to explore the possibility of transferring the Head Lease to the new owner of the house, or, in the words of Susan, to “renegotiate the lease for the new owner”^[12].  She repeatedly denied she wanted to have an early termination of the Head Lease^[13], and was adamant that the Head Lease could only be terminated by written notice^[14].

24.  It was in this context that the Judge analyzed the WhatsApp exchanges between Susan and the 1^st defendant on 16 March 2015 (as set out in [49] of the Judgment) and made the several findings now challenged by the defendants.  We agree with the Judge, for the reasons he gave at [11] of the Leave Decision, that the complaint about the mischaracterization of the WhatsApp messages was not material to the outcome of the dispute. Looking at the WhatsApp messages and the evidence of the witnesses, the Judge cannot be faulted for taking the view (at [50(a)] of the Judgment and [10] of the Leave Decision) that the WhatsApp exchanges did not show there was prior conversation on early termination of the Head Lease.  It is within the Judge’s fact-finding power to accept Susan’s evidence, and to find that, in her conversation with the 1^st defendant, Susan was doing no more than exploring the possibility of “renegotiating a lease for” the new owner of the house.

25.  We see no substance in the suggestion that the Judge had overlooked certain passages in the witness statements.  It is relevant to bear in mind that the Judge had heard the witnesses testified during the trial. It is also clear from the meticulous judgment that the Judge had given careful consideration to the evidence relevant to the issues he had to resolve.

26.  Further, the Judge’s comment at [50(c)] of the Judgment that the 1^st defendant “had misapprehended the terms of the Head Lease” is within the ambit of reasonable inference from evidence.  The comment could not afford the basis for the defendants’ argument that the Head Lease was vitiated by mistake.  Moreover, given that mistake was never part of the defendants’ pleaded case, it is simply not open to the defendants to advance such argument.     

27.  In short, Ground (1) has no reasonable prospect of success.

Ground (2): Was the defendants’ third alternative case pleaded?

28.  Ground (2) concerns the Judge’s rejection of the third alternative case that the 1^st defendant had, with Susan consent, served a written notice to quit through the WhatsApp message on 16 March 2015. The defendants took exception with the Judge’s view that the point was not pleaded, and sought to rely on paragraph 14.2 of the Defence and Counterclaim, which reads:

“The 1st Defendant acknowledged Susan’s request for termination but requested Susan to pay monthly rent of the Premises in the sum of HK2,500 for the remaining of the fixed term, i.e. until 31 December 2015, before the Tenancy Agreement would and could be terminated.”[15]

29.  We are unable to see how this paragraph can be read as pleading the third alternative.  Neither this paragraph nor the rest of the Defence and Counterclaim makes reference to the service of a written notice to quit under clause 23 of the Head Lease.  This argument is also inconsistent with the defendants’ averment in paragraph 30 of the Defence and Counterclaim that the plaintiffs had since 1 January 2016 committed trespass. 

30.  Further, in light of the following evidence given by Susan in cross-examination,^[16] it is plainly wrong to suggest that Susan had admitted that a notice to quit was served by the defendants through the WhatsApp messages:

“Q. So you – so is it true that you and Madam Cheng[17] actually agreed that the lease would be terminated on 31 December 2015?

A. Well, what I understood was that that was the date she gave and then that was the one month’ notice, yes.

Q. And you also – is it true that you and Madam Cheng agreed that there is no need for any further written notice?

A. No. No, that’s not true.”

31.  Ground (2) has no merits.

Ground (3):The defendants’ entitlement to seek reinstatement of the fences

32.  Ground (3) is premised on the acceptance of Grounds (1) and (2).  Given our conclusion that Grounds (1) and (2) have no prospect of success, Ground (3) would also fail.

Ground (4):Hanging salted fishes constituted act of nuisance?

33.  Under Ground (4), the defendants sought to argue that the Judge erred in rejecting their case that they were making salted fishes and the fishes did not give off obnoxious smell.  They said the Judge was wrong in drawing adverse inference at [100(b)] and [100(c)] of the Judgment and in not accepting that the 1^st defendant could not have hung the fishes elsewhere.  They argued that the Judge failed to take into account the character of the Land, namely, a farmland.

34.  As mentioned above, whether an act amounts to nuisance is a question of fact, and the Court of Appeal will not overturn findings of fact made by a trial judge unless they are shown to be plainly wrong.  In our view, the defendants have failed to meet this high threshold. 

35.  In the first place, rejection of the defendants’ case by itself does not constitute a valid ground of appeal.  Second, it is open to the Judge, on the evidence before him, to draw the relevant inferences and conclusion that the 1^st defendant hanged the dead fishes to annoy the plaintiffs (at [100] of the Judgment).  Third, as the Judge pointed out at [45] of the Leave Decision, he was clearly aware of the character of the land (see [85(e)] and [92] of the Judgment).  There is nothing to support the contention that the Judge had overlooked this when considering whether the 1^st defendant could have hung the fishes somewhere else. 

36.  Ground (4) therefore has no merits.

Ground (5):Were three buckets of excreta placed on the Land?

37.  Ground (5) complains that the Judge erred in finding that the substance in the three buckets placed on the Land was excreta, as the substance had never been identified in the pleadings. 

38.  We find this ground untenable.  At [108(b)] of the Judgment, the Judge referred to the Incident Report prepared by the Hong Kong Fire Services, which unequivocally stated that the Fire Services “located three buckets of excreta on a farmland”.  We note, too, that the report was dated 18 May 2016, which was 12 days after the plaintiffs issued the Writ on 6 May 2016.  Although the Amended Statement of Claim pleaded in paragraph 9(2) that the substance in the three buckets were unknown chemical, paragraph 5 of the plaintiffs’ Further and Better Particulars filed in answer to the defendants’ request stated that the substance was “excrement”, making reference to the finding in the Incident Report.  Further, as the Judge pointed out in [49] of the Leave Decision, the Incident Report was disclosed in the defendants’ 3^rd Supplemental List of Documents dated 26 July 2017 and adduced as evidence at the trial without objection.

39.  In our view, it is open to the Judge to make finding from evidence that emerged after the commencement of the proceedings.  The contents of the substance of the buckets were relied upon as a particular of the plaintiffs’ case.  It is trite that further and better particulars form part of the pleadings.  The defendants’ complaints that the Judge should not have identified the substance in the buckets as excreta and that this was not pleaded are misplaced. 

40.  There are also no merits in the complaint that the Judge failed to take into account the character of the neighbourhood when concluding that placing the three buckets of excreta on the Land amounted to nuisance.  In light of the evidence at the trial, including in particular the Incident Report, it is clearly open to the Judge to find as a matter of fact that placing three buckets of excreta on the Land amounted to nuisance.  There is simply no room for this Court to interfere with the finding.

Ground (6): Quantum of damages

41.  Ground (6) argues that the award of damages of $40,000 is excessive.  It is submitted that the Judge failed to take into account a comparable case, namely, 黎照華 訴 張卿艷, unreported, LDBM 278/2003, 12 May 2004.  This case was cited to the Judge in the application for leave to appeal.  The Judge pointed out in [53] of the Leave Decision that the defendants did not refer to this case at the trial. This being the case, the Judge cannot be criticized for not having regard to the case.

42.  The case of 黎照華 concerns a claim for damages for breach of the Deed of Mutual Covenants and in nuisance arising out of water leaking from the respondent’s flat to the claimant’s flat.  Like the Judge, we cannot discern from the judgment the basis on which the Lands Tribunal came to its award of $3,000 as damages for nuisance.  There is no discussion of the legal principles and comparable cases.  We also agree with Mr Yip for the plaintiffs that assessment of quantum is an exercise of discretion, which the appellate court would not interfere unless the judge is demonstrated to have erred in principle or come to a conclusion that no judge could have properly reached: see Hong Kong Civil Procedure 2019, Vol. 1, p 1169, §59/0/54.

43.  The defendants have not come anywhere close to this. They have failed to demonstrate that the award made by the Judge was wrong in principle or was one that could not have been made by a reasonable judge.  Ground (6) is unarguable.

44.  In conclusion, we are of the view that the intended appeal does not enjoy any reasonable prospect of success.  We also do not find any other reason that the intended appeal should be heard.  We therefore refuse to give leave for the defendants to appeal against the Judgment.

Costs

45.  Applying the normal rule of costs follow event, the defendants having failed in the application should pay the costs of the plaintiffs. 

46.  The present application is clearly without merits.  The defendants have also failed to pay heed to the reasoning given in Leave Decision: see Practice Direction 4.1, paragraph 7.  In line with the approach of this court as set out in a long line of authorities including Compania sud Americana de Vapores SA v Hin-Pro International Logistics Ltd, unreported, HCMP 1932/2014, 16 October 2014; Good Form Co Ltd v Cheung Wai Han, unreported, HCMP 3153/2014, 16 January 2015; Ricoh Hong Kong Ltd v Wallbanck Brothers Securities (Hong Kong) Ltd [2016] 3 HKLRD 134, and Man Lin Heung v 梁根林 and Anor [2019] HKCA 846 at [27], we would order the defendants to pay the costs of the plaintiffs in this application on indemnity basis. 

47.  Having considered the plaintiffs’ statement of costs and adopting a broad-brush approach, we assess the plaintiffs’ costs at $95,000.

Disposition

48.  We make the following order:

(1) The summons filed on 29 July 2019 is dismissed.

(2) The 1^st and 2^nd defendants pay the 1^st and 2^nd plaintiffs costs of the application, summarily assessed at $95,000.

49.  Since the application is totally without merit, we further make an order under Order 59 rule 2A(8) of the Rules of High Court that the applicant may not request our determination to be reconsidered at an oral hearing.