KING POLICY DEVELOPMENT LTD v. WAN KIN SHING

HCA 696/2015

[2018] HKCFI 690

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 696 OF 2015

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J U D G M E N T

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Introduction

1.  In short, the plaintiff is the registered owner of a multi-storey composite use (commercial/residential) building known as “Century Court” (世紀閣), which is located at Stewart Road and Jaffe Road, Wanchai.  The neighbour building is “City Centre Building” (城市大廈) which is a residential building (“City Centre”).

2.  Located between the said buildings is a scavenging lane (“the subject lane”).  Part of the subject lane lies within land lots owned by the plaintiff and part of it lies within land lots owned by “City Centre”.  At least for the purpose of this action, there is a “right of way” over the subject lane (where people can pass through and over it). 

3.  A structure is located along the exterior wall of “City Centre”.  It also occupies part of the land lots owned by the plaintiff (“the subject structure”).  The defendant operates a shop from the subject structure (“the defendant’s shop”).

The Plaintiff’s Pleaded Case

4.  The plaintiff commenced this action in March 2015 suing the defendant in trespass.  In essence, the plaintiff claims that, in March 2015, the defendant carried out excavation and other works at the subject lane with a view to installing water pipes for supplying water to the defendant’s shop (“the disputed work”).

5.  By way of background, the defendant has commenced an action claiming possessory title over the part of the subject lane occupied by the subject structure (HCA 354/2015).

The Defendant’s Pleaded Case

6.  The defendant does not deny the disputed work. He defends the plaintiff’s claim on the following grounds:

(a)   by an agreement reached in May 2006 among (i) the parties, (ii) the owners of “City Centre” and (iii) the Buildings Department, it was agreed in effect that there was a right to use the subject lane for the maintenance and servicing of “Century Court”, “City Centre” and the subject structure (“the 2006 agreement”);

(b)   by an agreement reached in July 2007 among (i) the parties, (ii) the owners of “City Centre” and (iii) the Buildings Department, it was agreed that, in return for the defendant reducing the coverage of the canopy of the defendant’s shop:

(1)   the Buildings Department would withdraw the Building Order dated 25 August 2005 (against “City Centre”) for the demolition of the subject structure;

(2)   one meter between the coverage of the subject structure and the external wall of “Century Court” could be used by the parties and the owners of “City Centre” for the maintenance of, and the provision of public utilities to, their respective properties.

(“the 2007 agreement”)

7.  The above is pleaded as acts constituting:

(1)   promissory estoppel and/or estoppel by convention and/or estoppel by representation;

(2)   proprietary estoppel.

Main Issues

8.  The main issue arising from the parties’ respective pleaded case is therefore factual in nature: whether the parties (and others) have reached an agreement regarding the defendant’s entitlement to carry out the disputed work, pursuant to (a) the 2006 agreement, and/or (b) the 2007 agreement.

9.  Further, because there is no written document which recorded, or which can evidence, the 2006 agreement, or the 2007 agreement, a proper resolution of what in essence is a factual dispute would require an assessment of the witnesses’ testimony given during the trial.

Witnesses’ Credibility and Findings of Fact

10.  The approach adopted by the courts for assessing credibility has been set out in my earlier decisions.  See, for example, the decisions in Chiu Chi Tong v. Lau Chong Sai & Another, HCA 765/2002 (para 28); Yu Ming Investment Ltd. v. Peng Ru Chuan, Richard, HCA 814/2002 (para 13); 林傳龍對謝巧玩 HCA 1443/2011 (19 December 2014) (para 15) and Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd and Others, HCA 3523/2002 (13 August 2005) (para 12).  See also what appears to be a similar approach in Esquire (Electronics) Ltd v Hong Kong and Shanghai Banking Corporation Ltd [2007] 3 HKLRD 439, para 135.  The above will be adopted in this action.

11.  The following witnesses testified at trial:

(a)   Mr Li, the plaintiff’s director (“Li”);

(b)   Mr Wang, a clerk of works of Allied Properties (HK) Ltd (“Allied Properties”); Allied Properties is the plaintiff’s parent company (“Wang”);

(c)   Mr Chan, a staff of the company appointed as the manager of “Century Court” (“Chan”);

(d)   Mr Liu, an estate assistant employed by “Century Court”’s manager (“Liu”);

(e)   the defendant.

12.  In short, for the reasons given below, I find the plaintiff’s witnesses to be truthful and reliable.  On the other hand, I do not consider the defendant’s testimony to be credible or reliable.

13.  The 2006 agreement is inherently implausible (it has been denied by the plaintiff’s witnesses):

(1)   according to the defendant, the subject-matter leading to the meeting in May 2006 was the canopy erected by the defendant, which protruded from the defendant’s shop to the external wall of “Century Court”. The Buildings Department became involved because of a complaint lodged by the manager of “Century Court”.  The subject lane (and the disputed work) was not what brought about the said meeting;

(2)   according to the defendant, of those who were present at the May 2006 meeting, Liu was the person who was from the plaintiff’s side. However, Liu was only a staff of the manager of “Century Court”.  It is highly unlikely Liu would consider himself should, or could, represent the owners of “Century Court” to make any commitment concerning their property rights;

(3)   according to the defendant, the Buildings Department participated in the discussion leading to, and became a party to, the 2006 agreement.  It is highly unlikely for a government department, such as the Buildings Department, to be part of an agreement concerning the rights and interests of privately held land lots.  That the Buildings Department had not done so is reflected by its stance stated in a letter dated 30 June 2006 to the defendant; the defendant asserted in his witness statement, rather unconvincingly, that the letter merely shows a change of position by the Buildings Department.

14.  For similar reasons (such as the purpose for the July 2007 meeting and the position of the person who the defendant asserts to be the plaintiff’s representative), the same conclusion can be reached as regards the 2007 agreement.

15.  The defendant’s failure to even mention an agreement in his letter of 12 May 2006 reinforces the conclusion reached in para 13 above (as regards the 2006 agreement).  The defendant’s explanation when he was cross-examined about this (to the effect it was omitted because he was still negotiating with the plaintiff) is not credible.

16.  Similarly, the letter of 11 July 2007 from the defendant’s former solicitors did not mention any agreement concerning the defendant’s right over the subject lane.  The said letter rather focused on the earlier discussions about the canopy protruding from the defendant’s shop.

17.  The defendant also asserted in his testimony to the effect that, by inviting him to the May 2006 meeting and the July 2007 meeting, the Buildings Department has somehow “elevated” him to be a legal owner of the subject structure.  This assertion has sensibly not been relied upon (and possibly disowned) by his counsel during closing submissions (cp para 42 and 48, defendant’s closing submissions).  There is simply no valid basis (legal or otherwise) to show that the Buildings Department could confer legal title (or other land interest) to any individual in such situation (even if it had intended to (which itself is also unlikely)).

18.  The defendant’s pleading and witness statement also mentioned several encounters between him and persons (for want of a better word) “connected” to “Century Court”:

(a)   16 March 2015 (in particular, Wang);

(b)   17 March 2015 (Chan);

(c)   18 March 2015 (Chan)

(collectively “the Mar 2015 encounters”)

19.  These are said to give rise to a promissory estoppel and/or estoppel by convention and/or estoppel by representation. 

20.  But even according to the version given in the defendant’s witness statements, the most that can be said about the Mar 2015 encounters is that the person(s) responsible for the daily maintenance of “Century Court” did not see a need to take imminent legal action.  Having said so, on 17 March 2015 they asked the police to attend the scene, presumably to witness defendant’s action.  The reasonable inference from this conduct is that they considered the defendant’s act to be at least potentially legally wrongful, and objectionable.  Further, this action was commenced soon afterwards on 30 March 2015.  In these circumstances, to argue that the Mar 2015 encounters can give rise to some kind of estoppel is far-fetched, and accordingly rejected.

21.  That the defendant’s reliance on the Mar 2015 encounters lacks merit is also reflected by the fact that they were referred to with minimal enthusiasm in the defendant’s closing submissions (para 61 thereof), and apparently so also in the defendant’s opening submissions (para 33 thereof).

22.  Accordingly, I make the following fact findings:

(1)   there is no admissible evidence to support the existence of the 2006 agreement or the 2007 agreement;

(2)   there is no proper evidence of conduct constituting estoppel of any kind.

Conclusion

23.  There being no valid defence to the plaintiff’s claim:

(a)   there will be an order in terms of para 1 and 2, prayers for relief, statement of claim;

(b)   the counterclaim is dismissed.

Other Matters

24.  Other so-called lines of defence have also relied upon.

25.  First, it is pleaded that the subject lane is not used exclusively by the plaintiff.  The most that the defendant can rely upon is a “right of way” over the subject lane.  But what is involved in this action goes beyond the exercise of a “right of way” (see also para 2 above).

26.  Secondly, the defendant pleads a rather ambiguous “plaintiff’s course of conduct and/or representatives” (defined in the defendant’s opening as the alleged representations during the Mar 2015 encounters (see para 18 above)) (but see also para 41(c) and (f) and 43(2), and 41(d) to (e), defendant’s opening submissions).  Insofar as the same is so defined (para 41(d) to (e)), this part of the defendant’s case has not been established (see para 20 above).  Insofar as the same also relies on pre-2006 events (para 41(c) and (f) and 43(2)), the evidence (and the related legal argument) is too weak and/or ambiguous to properly ground any kind of estoppel (see in particular para 31, defendant’s closing submissions).

27.  It is also argued that, because this action only involves the part of the subject lane not covered in HCA 354/2015 (the adverse possession claim concerning the subject structure), the plaintiff has admitted the defendant is the rightful owner of the subject structure.  No such admission can properly be claimed.  This action is so framed only because the plaintiff does not find it necessary to over-complicate its present claim.  Nothing else can be inferred from that stance.

28.  Thirdly, it is argued that the subject lane is not part of the redevelopment site of “Century Court” (relying on provisions in the Building (Planning) Regulations (Cap 123F)).  As the defendant has himself pointed out, those provisions are intended for the determination of a building site’s “plot ratio” by the Buildings Department (para 61, defendant’s opening submissions), it is not a matter which can be made use of by a squatter, such as the defendant, in a land dispute between him and the legal owner of the land in question (the plaintiff in this action).  This is therefore a non-point.

29.  Fourthly, in the defendant’s closing submissions, it is argued that the work involved in this action was undertaken by the Waterworks Department, and not by the defendant (para 12 to 20, defendant’s closing submissions) (apparently, reliance is placed here on the defendant’s testimony to the effect his work was completed by 18 March 2015). 

30.  However, it is noted that at para 19, defence and counterclaim, the pleader avers:

“It is denied the excavation works constituted trespass for the reasons set out below [that is, para 20 thereof onwards]” (emphasis supplied).

Not only is this an admission that the disputed works continued beyond 18 March 2015, it can be inferred that, at the time of the pleading, the defendant made no distinction between “his own works” and the works of the Waterworks Department (which in all likelihood was procured (or at least incited) by the defendant) (see also para 4 and 6 above and 32 below).

31.  The defendant also avers:

“In reliance on the Plaintiff’s clear representations on 16^th, 17^th and 18^th March 2015, the Defendant and his contractors carried out and continued the excavation works” (emphasis supplied) (para 96, defence and counterclaim).

This is a clear admission the defendant’s works continued beyond 18 March 2015.

32.  Finally, the counterclaim pleads:

“By reason of the matters pleaded above, the Defendant has acquired a right to arrange for laying underground water supply pipes in [the subject lane] to connect [the defendant’s shop] to the water mains pipe … ” (emphasis supplied) (para 104 thereof).

33.  This last-mentioned argument is nothing more than a recent invention, and should be rejected.

34.  The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the judgment and its easier comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.

Costs Order

35.  The parties agree (in accordance with the usual rule) that costs should follow the event.  There will accordingly be a costs order that the costs of this action (including any reserved costs) be paid by the defendant to the plaintiff to be taxed if not agreed.