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

HCA 240/2016
HCCT 85/2004
(heard together)

[2024] HKCFI 3387

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 240 OF 2016

(Transferred from District Court Civil Action No 3870 of 2008)

________________________

________________________

AND

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 85 OF 2004

(on transfer from HCA 2358/2002)

________________________

________________________

D E C I S I O N

________________________

1.  Before this Court is the application made by the Plaintiffs in HCA 240 of 2016 (“HCA 240”)  for the action to be tried together with HCCT 85 of 2004 (“HCCT 85”), and for the evidence filed in the two proceedings to be mutually admissible for such purpose.

2.  HCCT 85 (formerly HCA 2358/2002)  was commenced in June 2002 by 3 Plaintiffs, who were then the registered owners of the Remaining Portion of Section X, and Subsection 2 of Section X, of Lot No 3335 (“Lot”)  in Demarcation District 91 (“Plaintiffs’ Land”). The defendant named in HCCT 85 is Yuen Chak Construction Company Limited (“YC”). YC was at the material time the registered owner of the adjoining land, namely Lot 3335 SW of the Lot (“Defendant’s Land”).

3.  According to the Statement of Claim filed in HCCT 85, the Plaintiffs alleged that YC had entered the Plaintiffs’ Land and had erected a fence on a portion of the Plaintiffs’ Land, excluding the Plaintiffs therefrom, without the Plaintiffs’ knowledge or consent. The Plaintiffs therefore claimed damages for trespass, a declaration that the defendant is not entitled to enter, use or build fence on the Plaintiffs’ Land, and an injunction to restrain the defendant, by itself, servants or agents, from entering, using or building on the Plaintiffs’ Land.

4.  The defence relied upon by YC is that it was not a trespasser, as it claimed that there had been an agreed boundary for the Plaintiffs’ Land and the Defendant’s Land, pursuant to a site visit made and agreement reached between YC and the owners of Section X of the Lot, in early 1992 (“1992 Agreement”).

5.  Pleadings had been closed, factual and expert evidence had been filed, and trial dates had been fixed for October 2004, before they were vacated as a result of amendments made by YC to its Defence shortly before trial.

6.  HCA 240 (formerly DCCJ 3870/2008)  was commenced in September 2008 by the 3 Plaintiffs (the 4^th and 5^th Plaintiff were subsequently joined), as the registered owners of the Plaintiffs’ Land against the 1^st Defendant named, King Union International Investments Limited (“King”), as the registered owner of Section W of the Lot, and the 2^nd Defendant (“Ho”)  who was a director and secretary of YC (pleaded to be the predecessor in title of King’s property).

7.  The Plaintiffs allege in HCA 240 that since May 1999, YC had through Ho trespassed the Remaining Portion and Subsection 2 of Section X (“Section X”)  of the Plaintiffs’ Land by erecting a fence to draw the boundary between Section X and Section W of the Lot.  It was alleged that the trespass had continued despite and after assignment of the Defendant’s land or the relevant part thereof to King in May 2005. According to the Plaintiffs, King and Ho had on 5 June 2008 entered Section X, removed a part of the fence, and relocated it so as to further widen Section W, and diminishing Section X of the Lot.

8.  By way of defence, King relies on the same 1992 Agreement and the boundary allegedly agreed between YC and the then owners of Section X.

9.  By amendments made in April 2021 to the Defence filed in HCA 240, King included a new claim of adverse possession and proprietary estoppel. It was alleged that King and its predecessors in title, YC and Yuen Wa Engineering Company Limited (“YW”), had been in continuous adverse possession of the part of the Plaintiffs’ Land for a period of no less than 12 years by 27 April 2004, before the commencement of HCA 240.

10.  In short, King relies in HCA 240 on the period of possession by YC, to establish its own claim of adverse possession against the Plaintiffs.

11.  After the initial trial dates of HCCT 85 were vacated, a winding-up order was made against YC on 2 December 2004. Section W of the Lot had also been assigned on 18 July 2003 by YC to YW, and on 7 May 2005, by YW to King. As a result, and on the Plaintiffs’ evidence, their claims in HCCT 85 against YC for damages for trespass, and a declaration and injunction against YC did not become “pressing”, and HCCT 85 was not proceeded with.

12.  It was only on 11 November 2022, that the Plaintiffs obtained leave in HCCT 85 to proceed with the action.

13.  In the meantime, HCA 240 was commenced by the Plaintiffs in September 2008 against King, the then-current registered owner of Section W/the Defendant’s Land, and against Ho, the director of YC, in respect of the steps of alleged trespass taken by King and by Ho.

14.  After the amendments made in the Re-Re-Re-Re-Re-Amended Defence and Counterclaim in HCA 240, expert and factual evidence was filed. It was only on 29 May 2023 that the Plaintiffs applied for HCA 240 and HCCT 85 to be tried at the same time and be heard together.

15.  The thrust of King’s opposition to the Plaintiffs’ application for consolidation is that no good reason has been given by the Plaintiffs for their inordinate and inexcusable delay and the inaction on their part in the conduct of HCCT 85, which the Court should consider as liable to be struck out as abuse of process, and as being in contravention of the underlying objectives set out in Order 1A rule 1(b)  RHC (“Objectives”). It is alleged that the true reason for the Plaintiffs to continue now with HCCT 85 is really to prevent King from relying on the period of YC’s adverse possession of the relevant part of the Plaintiffs’ Land, and to claim that the period of YC’s adverse possession had stopped to run from the Plaintiffs’ commencement and continuation of HCCT 85 against YC. King claims that the Plaintiffs have no genuine intention to bring HCCT 85 to a conclusion.  For these reasons, and the prejudice caused to King as a result of the Plaintiffs’ 18 years of delay in the conduct of HCCT 85, King argued that the Court should not permit or condone in the Plaintiffs’ conduct of warehousing their claims in HCCT 85, and re-activating now those proceedings for tactical purposes only.

16.  Counsel for King argued that if the only reason the Plaintiffs have for trying HCCT 85 and HCA 240 together is to prove that time had stopped running for adverse possession from the commencement of HCCT 85, it is not necessary to have a full trial of HCCT 85 at the same time as HCA 240, as this limited point can be argued at the trial of HCA 240 itself, without involving the Court in all the factual and legal disputes in HCCT 85.

17.  Although it is indisputable that there had been lack of any action in HCCT 85 since the trial dates were vacated, it is also indisputable that on 11 November 2022, the Court granted leave to the Plaintiffs to proceed with the said action.

18.  Counsel for King has not pursued the initial claim that HCCT 85 had been abandoned, or was no longer a live or pending action for the purposes of consolidation.

19.  The Plaintiffs’ inactivity can be understood in view of the fact that YC was wound up in December 2004. There was no point for the Plaintiffs to pursue a judgment for damages against a company which has been wound up, nor any real necessity to seek the declaration and injunction initially sought against the wound-up company.

20.  HCA 240 was commenced by the Plaintiffs to protect their rights in the Plaintiffs’ Land as against King, which was by then the registered owner of Section W of the Lot.

21.  I therefore cannot agree that the Plaintiffs had abused the court’s process by reason of their failure to continue HCCT 85, and/or to commence and pursue HCA 240 against King instead.

22.  It is clear beyond peradventure that there are common issues of fact and law between the claims made in HCCT 85 and those made in HCA 240, as they relate to YC/Ho’s acts of the erection of the fence, which was later relocated to widen Section W, and whether there was the alleged 1992 Agreement when the boundary of Section X and Section W was allegedly agreed between the Plaintiffs and YC (the predecessor in title of King).

23.  Since the Plaintiffs have obtained leave to continue HCCT 85, and it is their intention now to proceed to trial of the claims made in HCCT 85, in which YC is represented by its liquidators, it will be consistent with the Objectives of procedural economy and costs effectiveness to have the common questions of fact and law decided at the same trial, by the same judge, on the evidence to be considered at the same time. Even if the liquidators of YC do not resist the claims made, it is obvious that the Plaintiffs will still have to prove their case at trial. It will not be sensible to have the same issues tried in HCCT 85 separately to HCA 240.

24.  For these reasons, I accede to the application for consolidation, in terms of the Plaintiffs’ summons.

25.  In view of the delay which has already occurred, the parties should diligently agree on further directions for the trial, with the aim of a speedy and effective trial. It is noted with some dismay by the Court that leave has been granted for separate expert evidence to be adduced on many issues. Time has since evolved, and the current practice of the Court is to have single joint experts rather than to permit the parties to call their individual experts. I see no reason why the experts cannot agree on simple and basic questions such as valuation of the properties, and on quantum.  The parties are directed to confer and to agree sensibly on issues, including expert evidence, and the experts will have to give very good reasons to the trial judge as to why they cannot agree on any matter, whether on liability or quantum. Parties and the experts are reminded that costs and time unreasonably wasted will not be recoverable and may have to be paid for on indemnity basis.