IP WAN FAT AND OTHERS v. KING UNION INTERNATIONAL INVESTMENTS LTD AND ANOTHER

HCA 240/2016

[2018] HKCFI 2332

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 240 OF 2016

_________

_________

_______________

DECISION

_______________

Introduction

1.  This is the hearing of a summons under Order 14A of the Rules of High Court taken out by the defendants on 19 September 2017 (“Summons”).  The background of this matter is set out in the Reasons for Decision of Recorder Yvonne Cheng SC dated 27 April 2018 (“April Decision”). I shall adopt the abbreviations contained therein.

2.  Leave to amend the Summons was given at the April hearing and the parties agreed on that occasion that instead of the issues set out in the Summons, the real question that requires determination is as follows:“whether, on the true construction of the assignment of 10 March 1992 to Sum Yuk Ming, the boundary of the land in section X at the location where section X was adjacent to section W, was that as marked ‘J-A’ in the plan attached to the sale and purchase Agreement dated 14 March 1992 to Yuen Chak Construction Company Limited, the predecessors in title of the defendants” (“Question”).   

Relevant background

3.  Briefly stated, the following matters are relevant by way of background:

(1)   The parties to this boundary dispute are the registered owners of subsections within Lot No 3335 in DD 91, New Territories, Hong Kong (“Lot”).

(2)   It is common ground that in early 1992, the then owners of the relevant sections in the Lot (Messrs Leung, Chan and Tang) retained a chartered land surveyor (Mr Sam Mak) to prepare a setting-out plan to define the perimeters of, inter alia, sections W and V.  The plan produced by him was dated 28 February 1992 (“1992 Plan”). 

(3)   However, the 1992 Plan was not registered against the relevant sections of the Lot immediately by deed poll.  What happened was that the whole of section X was sold to a Sum Yuk Ming bya sale and purchase agreement dated 4 March 1992 and assigned by an assignment dated 10 March 1992 (“Assignment”).  No plan was attached to the sale and purchase agreement or the Assignment.  Section X was subsequently sold to a Lai Ying Tat on 28 March 1992.  On 27 January 1998, it was sold to the 1^st and 2^nd plaintiffs.

(4)   Section W was sold to the defendants’ predecessor in title (ie Yuen Chak Construction Company Ltd) by a sale and purchaseagreement dated 14 March 1992.  The 1992 Plan was annexed to the sale and purchase agreement which was registered by memorial number 268844 on 27 March 1992.

(5)   In early 1999, section X was divided into subsections 1 and 2 and the Remaining Portion (“RP”) by a deed poll which was registered in the Land Registryby memorial no N431893 on 2 February 1999.  A plan prepared by Leung Shou Chun Land Surveying Consultants Limited dated 16 January 1999 was annexed to the memorial (the “1999Plan”).  The 1999 Plan was signed off by Mr Leung Shou Chun (“Mr Leung”), an authorised land surveyor.

(6)   The 1^st and 2^nd plaintiffs are currently the registered owners of the RP of section X of the Lot.  The 1^st plaintiff has since 23 July 2010 also been the registered owner of ⅓ part or share of subsection 2 of section X.  The 4^th and 5^th plaintiffs have since 26 August and 23 August 2010 been the respective registered owners of ⅓ part or share of subsection 2 of section X.

(7)   RP and subsection 2 of section X are adjacent to section W. This is how the precise boundary between these subsections became the subject matter of this dispute.  The plaintiffs are obviously relying on the 1999 Plan and the defendants on the 1992 Plan.  The two sides contend that the other side was committing trespass by reason of their respective contentions ofwhere the boundary should be.  The details of the acts committed are not relevant for the present purpose.  The disagreement has obviously arisen by reason of the discrepancies between the two plans.

The defendants’ case

4.  Mr Lai for the defendants invited me to answer the Question in the affirmative.  In his submissions, heavy reliance was placed on the correctness of the 1992 Plan and I was asked to find that it was accurate.

5.  He argued that the 1992 Plan was properly done by a chartered land surveyor and duly registered.  This plan was therefore incapable of mistake as it was a new demarcation by the then owners of the relevant sections of the Lot and it was up to them to decide how they wished to divide the section up for sale to different purchasers.

6.  He also contended that the 1992 Plan was a setting-out plan and the 1999 Plan was not.  Setting-out plans have well-established scientific and legal status by reference to government land survey records.  It was also a macro setting-out survey creating and defining the boundaries of various sub-lots including section W.  In contrast, the 1999 Plan was a micro subdivision of section X only and he attacked the accuracy of the same and criticised it for failing to consult the 1992 Plan which was already in public domain.  He also criticised the calculations contained in the 1999 Plan saying, for example, that the total length of the lot boundary was longer than the 1992 Plan by about 1.2 metres.

The plaintiffs’ case

7.  The plaintiffs’ case is that when section X was sold to Sum Yuk Ming, the property that was described in the Second Schedule to the sale and purchase agreement was simply the entirety of section X as registered in “the District Land Office, North” and no reference was made to any plan.  The 1992 Plan was at all material times never registered in the District Lands Office under section X.  The wordings in the Assignment are therefore incompatible with the 1992 Plan.

8.  Mr Lam for the plaintiffs also submitted that Order the 14A procedure is inappropriate as there is disputed expert evidence by the land surveyors and he pointed to various points made in the expert reports to make good his submissions.

Discussion

9.  As explained by Chan CJHC (as he then was) in Secretary for Justice v Wing Lung Wai Community & Ors [1999] 3 HKC 580 at 588A–G:

“ In my view, different conveyances use different descriptions of the parcel of land to be granted and adopt different formulae with regard to the use to be made of the plan annexed to the conveyance. If there is a dispute with regard to what is actuallyconveyed, that is a matter of construction of the whole conveyance,including the parcel clause and the plan, in the light of other relevant surrounding circumstances. The object is to ascertain what the parties intended to be passed under the document and what is passed.”

10.  Despite suggestions to the contrary in the skeleton arguments, the parties agreed that I should focus on the Question and the exercise in question is one of construction of the Assignment dated 10 March 1992 (“Assignment”).

11.  It is trite that the Order 14A procedure is inappropriate if the issues of facts in the matter are interwoven with the legal issues to be determined. For obvious reasons, the question of law or construction of document cannot be dealt with on assumed or hypothetical facts.  And if it is necessary for the court to hear evidence to resolve a factual dispute in order to come to a determination on the question of law or construction of document, it would not normally be suitable to invoke Order 14A. See Shell Hong Kong Ltd v Yeung Wai Man Kiu Yip Co Ltd (2003) 6 HKCFAR 222 at §24 per Chan PJ.

12.  In my view, my ability to determine this Order 14A application depends on whether I can resolve the Question without hearing expert evidence from the land surveyors.

13.  Mr Lai said the matter does not turn on expert evidence because the plaintiffs have failed to adduce evidence to show how 1992 Plan was wrong.  He said it had been 18 years since the dispute had arisen and the plaintiffs have still failed to do so.  He also relied on the long ownership ofsection W by the defendants and the fact that there was peace for many years between the parties.

14.  In contrast, Mr Lam submitted the expert evidence before the Court is of vital importance.  He referred me to the expert evidence of the land surveyor retained by the plaintiffs (Mr Leung) who prepared the 1999 Plan.  My attention was drawn to the following matters:

(1)   Mr Leung pointed to the existence of a memorial registered against the Lot in 1973 when the Lot was divided into, inter alia, sections X and W.  A plan dated 3 January 1973 was registered against the Lot (“1973 Plan”) setting out the relative positions of and boundary between sections X and W.  As against section X, it is said that the area was approximately 10,000 square feet. 

(2)   The 1973 Plan was attached to a conveyance dated 11 January 1973 for the sale and purchase of a number of sections within the Lot (including sections W and X) and was registered by memorial number 173529.

(3)   The 1973 Plan was taken into account when Mr Leung preparedthe 1999 Plan but it was ignored when the 1992 Plan was prepared.

(4)   Mr Leung criticised the 1992 Plan suggesting that it was prepared in a piecemeal manner.  Significantly, it was said that the total area of section X in the 1992 Plan was more than 10% smaller as compared to the 1973 Plan (ie 10,000 square feet).

(5)   In contrast, in the expert evidence adduced by the defendants, the expert simply “preferred to adopt Mr. Sam Mak’s survey because his survey was first registered”.  The expert said he had “no comment on Mr. Leung’s choice”.

15.  In light of the aforesaid, Mr Lai’s submissions that the plaintiffs adduced no evidence to challenge the 1992 Plan must be incorrect.

16.  In response, Mr Lai contended that the 1973 Plan was basic.  Itwas for identification purpose only and was not a setting out plan.  However, he accepted that in construing the Assignment, the 1973 Plan ought to be taken into account but sought to rely on the nemo dat rule in answer, the relevance of which I do not understand.  He also asked me not to overlook the fact that the 10,000 square feet referred to in the 1973 Plan was an approximate area only and suggested that in the context of litigation in respect of lands in the New Territories, an approximate area could mean more than a 10% discrepancy.  

17.  In construing the Assignment, the accuracy of the plans in question (ie the 1973 Plan, the 1992 Plan and the 1999 Plan) are obviously relevant.  This explains why Mr Lai spent considerable time attacking the accuracy of the 1973 Plan and the 1999 Plan.  Expert evidence prepared by land surveyors have been placed before me to demonstrate the point.  This also explains why Mr Lai invited me to conclude that there is no mistake in the 1992 Plan and that there are prima facie mistakes in the 1999 Plan. 

18.  Recognising the difficulty in reaching any conclusion on the relevant plans, Mr Lai argued that the matter can be decided by “the time-honoured certainty of registration and priority”.  He suggested that it was up to the common owners (ie Leung, Chan and Tang) to divide up the land as they wish.  However, this is of little assistance as the 1992 Plan was not registered against any of the subsections of the Lot when the Assignment was entered into.  There is no evidence to suggest that the 1992 Plan was even brought to the attention of Sum Yuk Ming when he entered into the Assignment on 10 March 1992.  In fact, the 1992 Plan first appeared in the sale and purchase agreement dated 14 March 1992 and was not registered until 27 March 1992 against section W.

19.  Given how the matter was presented and the fact that I am askedto reach definitive conclusions on the accuracy of plans in light of conflictingexpert evidence, I am of the view that the use of the Order 14A procedure is inappropriate and the Question should only be determined after a full trial.

20.  In light of the aforesaid, I dismiss the Summons.

21.  The parties agreed that costs should follow the event. Costs of the Summons (including costs of the hearing on 19 April 2018) are to be paid by the defendants to the plaintiffs, to be taxed if not agreed.