HO MAN LAP v. CHAN SHUI CHEONG AND ANOTHER

DCCJ 1462/2017

[2020] HKDC 65

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1462 OF 2017

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ASSESSMENT OF DAMAGES

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1.  This is an assessment of damages for a trespass claim, with default judgment entered on 19 June 2017.

2.  There is no dispute between the parties that the damages for trespass (i.e. mesne profit) should be HK$218,667. The remaining issue is that the plaintiff is claiming for both aggravated damages and exemplary damages.

Background

3.  The background is not in dispute: the plaintiff was and is at all material times the registered owner of the plot of land known as the Remaining Portion of Lot No. 198 in Demarcation District No. 74 (“the Lot”).

4.  The 1^st and 2^nd defendants have been the operators of a store known as Chan Fung Kee Store (“the Store”) since March 2014, purported to be pursuant to a tenancy agreement dated 11 March 2014 between Choi Sui Cheung (“Mr. Choi”) as the purported landlord and the defendants as the purported tenants.

5.  Part of the Store encroached the Lot and part were on Government land.

6.  For the sake of convenience, with reference to the plan of the Lot on page 137 of Trial Bundle A, the building of the Store is the area coloured in red and yellow. The Store building occupying its own land is coloured in red (“Red Zone”). This is the front portion of the Store. The Store building occupying the Lot is coloured in yellow (“Yellow Zone”) and the area outside the Store building, in form of a covered backyard which occupied the Lot is coloured in green (“Green Zone”). There are two areas on either side of the Store which occupied Government land: the area to the left of the Store (viewing from the front of the Store) is coloured in blue (“Blue Zone”) and the area to the right coloured in orange (“Orange Zone”). These two zones would form possible access to the Yellow Zone and Green Zone without entering the Red Zone (i.e. the front of the Store).

7.  Almost one year prior to this purported tenancy agreement, on 19 April 2013, the plaintiff has already obtained judgment (DCMP 377/2010) (as amended on 5 July 2013 due to a typo) ordering, inter alia, the plaintiff to recover possession of the Lot and the defendants in DCMP377/2010 (including Mr. Choi) to vacate the trespassed land within 60 days.

8.  The plaintiff obtained a writ of possession with fieri facias combined (“the Writ of Possession”) on 28 December 2013.

9.  There were two unsuccessful attempts to execute the Writ of Possession by the plaintiff accompanied by the court bailiff (on 21 March 2014 and 23 April 2014).

10.  On 16 October 2015, the plaintiff applied to District Court for directions to facilitate the execution. On 29 February 2016, the following order, inter alia, was handed down:

(1)  As far as it is necessary to gain access to egress from the Lot for the purpose of enforcing the Writ of Possession, the plaintiff and his agents as well as the bailiff may enter the front part of the Store and/or the passage on either side of the Store;

(2)  The plaintiff and his agents may, and the bailiff do take all reasonable and necessary steps to assist the plaintiff and his agent to, remove any barriers, obstructions, obstacles or objects preventing the access to and egress from the Lot;

(3)  The bailiff be authorised and directed to request the assistance of the police where necessary;

(4)  Any police officer be authorised to arrest and remove any person who the police officer reasonably believes or suspects to be committing or have committed a criminal offence by or in obstructing or interfering any bailiff in carrying out his or her duties in the execution of the Writ of Possession.

11.  On 27 May 2016, a second writ of possession and fieri facias combined was issued (the “2^nd Writ of Possession”). On 19 September 2016, the plaintiff and the court bailiff attended the Store and gained access to the Lot.

12.  On 2 November 2016, the plaintiff and the court bailiff attended the Store again and the 2^nd Writ of Possession was finally executed.

The plaintiff’s case

13.  The plaintiff’s case was that the defendants had all along continuously and blatantly defy the Court and frustrated the efforts of the plaintiff to re-possess the Lot. The whole process had taken some 27 months and had incurred a large amount of time and costs as well as causing much distress and anxiety to the plaintiff and his son.

14.  The plaintiff’s son, Ho Kwun Cheong (“Ho”), his lawful attorney in this matter, was called to give evidence.  His evidence was consistent with the plaintiff’s case.

15.  In summary, on each of the occasion in 2014, the defendants had obstructed the execution of the Writ of Possession and refused to allow the plaintiff, his agents and the court bailiff to access the Lot either through the Store (Red Zone) or the passages on either side (Blue and Orange Zones).

16.  The plaintiff had tried to seek further assistance from the court bailiff, the police, the District Lands Office and the Lands Department all to no avail. That was the reason why the plaintiff applied to District Court for further directions in 16 October 2015 (“the Application”).

17.  Ho attached with his witness statement the Plaintiff’s Affirmation in support of the Application which provided details of the case (which I need not repeat here).

18.  The Application was opposed by the 1^st defendant and his declaration dated 5 November 2015 (“the Declaration”) was also attached in Ho’s witness statement (page 199 of the Trial Bundle A). The 1^st defendant stated, inter alia (as I translate):

“Due to the above situation, I am legally operating Chan Fung Kee store on government land. I do not understand legal principle and I do not want to disobey court order, but if I am legally using the land doing commercial business, I must have the right not to allow anyone without my permission to enter into Chan Fung Kee store to perform such activity (unless there is a criminal act then the police must have the right to enter the store for investigation).”

19.  The court allowed the plaintiff’s application and passed down the order on 29 February 2016 (as stated in paragraph 10 above).

20.  After the issue of the 2^nd Writ of Possession, the plaintiff, his lawyers, surveyor and bailiff attended the Store again on 23 June 2016 to give notice to quit.

21.  However, a few days later, Ho and the plaintiff noticed that workmen were installing a new iron gate and fencing surrounding the Store. The plaintiff’s lawyers issued a letter on 19 July 2016 to District Land Office making a complaint (and enclosing various photographs). This letter and the reply letter dated 22 July 2016 are enclosed in Ho’s witness statement.

22.  On 25 July 2016, the plaintiff, his lawyers, surveyor and bailiff attended the Store and found a new wire mesh gate which further prevented assess to the Lot via the neighbouring Government land. The bailiff (and the police, who was then called) did not allow the plaintiff to break open the fence on the understanding that the court order only allowed “removal” of barriers and not “breaking open” of such.

23.  The plaintiff’s lawyers wrote to the bailiff stating their position on 28 July 2016. This letter was enclosed in Ho’s witness statement.

24.  On 12 September 2016, the bailiff and others attended the Store and managed to give the final notice to quit. On 19 September 2016, the defendants finally allowed the plaintiff and the bailiff etc. to access the Lot and the plaintiff recovered vacant possession. However, the defendants did not allow the plaintiff to re-enter after the bailiff left. The plaintiff called the police but to no avail.

25.  The plaintiff’s lawyers wrote to the police on 29 September 2016 stating their position and the police replied on 26 October 2016. Both letters were enclosed in Ho’s witness statement.

26.  On 2 November 2016, the plaintiff, his lawyers, surveyor, the bailiff, the police and a security guard attended the Store again to execute the 2^nd writ of fieri facias. On this occasion, the plaintiff managed to fence off the part of the Store that encroached the Lot and the bailiff seized up the goods and chattels therein.

27.  During the trial, Ho elaborated on the distress and anxiety during the whole process: he mentioned that the plaintiff suffered from cancer in around 2013 and was hospitalised for 7-8 months during that year, that he received telephone death threats after his discharge from hospital, and that in around October 2015, the plaintiff was questioned by the ICAC and the crime unit of the police (concerning recovery of possession of land) but no charges were laid etc.

The defendants’ case

28.  Only the 1^st defendant gave evidence at the trial.

29.  Despite the fact that judgment has already been entered, is was surprising that the 1^st defendant chose to give evidence alleging that:

i)    he has never occupied the trespassed land, and

ii)   he has never refused anyone to enter the Store to re-possess the trespassed land.

30.  In his evidence-in-chief, the 1^st defendant admitted that when he first rented the Store from Mr. Choi in March 2014, he was already aware that there was a judgment against Mr. Choi for trespassing and that the plaintiff could gain re-possession of the area in question. He understood that this was part of the rear portion of the Store. However, the 1^st defendant claimed that he was running a small business which only needed a small amount of space, so he would only need to use the front part of the Store.

31.  On cross-examination, the 1^st defendant confirmed that he had never used the trespassed area since when he first rented the Store in March 2014.

32.  The 1^st defendant was questioned: how and when did he know which part of the Store is the trespassed area?

33.  The 1^st defendant admitted that he did not know where the demarcation was because the plaintiff did not come to “sort out the matter” at the time. He also admitted that there was no barrier between the trespassed area (Yellow Zone) and non-trespassed area (Red Zone) inside the Store, so he could freely go from one zone to the other.

34.  As such, how would the 1^st defendant know that he never used the trespassed area?

35.  The 1^st defendant explained that the demarcation line was shown to him by the court bailiff when they came to the Store.

36.  But the bailiff first attended on 21 March 2014, so he was occupying the trespassed area before then?

37.  The 1^st defendant admitted so.

38.  He was then questioned on the plaintiff’s lawyer’s letters. He admitted that he received the letter dated 19 June 2014 and understood that it stated that part of the Store was trespassing into the plaintiff’s land. The 1^st defendant then claimed he moved all the stuff and cooking equipment out of this area very shortly after receiving this letter. He then admitted that he was using the trespassed area before that time.

39.  The 1^st defendant has clearly shifted his story again, so he was asked again how he knew the demarcation line at that time.

40.  Rather surprisingly, out of the blue, the 1^st defendant claimed that he had instructed a surveyor and the surveyor pointed out a line on the ground, but advised him that “all need to go by the bailiff’s direction for correctness”.

41.  But when did the 1^st defendant instruct a surveyor?

42.  The 1^st defendant quickly changed his story and claimed that it was Mr. Choi who instructed the surveyor. He said that he moved his stuff according to a “plan”.

43.  When asked about this “plan”, the 1^st defendant explained that the surveyor showed him a “plan” which was very similar to the plan on page 137 of Trial Bundle A, and he had moved his stuff from the Yellow Zone to the Red Zone. He further explained that after receiving the lawyer’s letter dated 19 June 2014, he passed the letter to Mr. Choi and urged him to instruct a surveyor. The surveyor came to the Store within 2-3 weeks. As such, he agreed that he moved his stuff off the Lot in around July 2014.

44.  So the 1^st defendant again shifted his story and admitted that he only stopped trespassing on the plaintiff’s land in July 2014.

45.  Despite all the shifting stories on when he stopped trespassing, the 1^st defendant did not explain why such important evidence (that is, instructing a surveyor and moving his stuff off the Yellow Zone) was not mentioned in his witness statement.

46.  Further, if the surveyor really came in July 2014, this would be some 4 months after the bailiff’s first attendance, on which occasion, according to the 1^st defendant’s earlier evidence, he was already shown the demarcation between the Yellow Zone and Red Zone.

47.  One would wonder why, under the circumstances, that a surveyor needed to be instructed, or indeed why the surveyor would show the demarcation and then advised that the line needed“to go by the bailiff’s direction for correctness” when of course, the bailiff had allegedly shown the line to the 1^st defendant 4 months ago?

48.  This is a classic example of a dishonest witness lying freely and attempting to use one lie to cover another, only to find himself completely confused at the end and his evidence is one incoherent mess.

49.  As such, I find that none of such alleged happened: the 1^st defendant (or Mr. Choi) never instructed any surveyor, was never shown (nor was interested in being shown) any demarcation line between the Yellow and Red Zone by the bailiff, and never moved any of the kitchen equipment or other stuff out of the Yellow Zone (until the plaintiff successfully re-possessed the land in 2016). I find that the defendants have been continuously trespassing on the plaintiff’s land all along.

50.  As to what happened on 21 March 2014 when the plaintiff, the Court Bailiff and surveyor first attended the Store? As abovementioned, the plaintiff’s case was that they were stopped from entry by the 1^st and 2^nd defendants.

51.  As mentioned above, the 1^st defendant also now claimed that he never refused anyone entry to the Yellow Zone. In fact, he allowed anyone entry via the shop front into the Red Zone.

52.  But, just like what the 1^st defendant claimed as “never” in the previous instance, he would immediately walk back from that under cross-examination.

53.  The next question must therefore be: if anyone could enter the Red Zone via the shop front, then they must be able to enter the Yellow Zone?

54.  The 1^st defendant agreed, but then he changed his story, and claimed that Mr. Choi told him that: “They insisted to enter via the shop front breaking through the wall, and wanted to destroy the shop. Please ask them to enter via the side alleyways?”

55.  On further questioning, the 1^st defendant explained that when the plaintiff and the others arrived, he did not know how to deal with such matters. So he called Mr. Choi on the phone and then put the bailiff on the phone to talk to Mr. Choi. The bailiff then told him, “If you and Mr. Choi do not welcome us breaking down the wall and entering via the shop front, you have the right to refuse, and Mr. Choi has the right to refuse.”

56.  But didn’t the 1^st defendant just gave evidence that he had allowed everyone to enter the Red Zone?

57.  The 1^st defendant then claimed that the kitchen department had things blocking the way: these were the things he had moved out.

58.  But didn’t the 1^st defendant just confirmed that he moved the things into the Red Zone only in July 2014 after the visit from Mr. Choi’s surveyor?

59.  The 1^st defendant then shifted his story again: in fact, there was a doorway between the Red and Yellow Zone, and then, without a break, he made a new claim that there was actually a wall partitioning the interior of the Store, and this wall, by sheer coincidence, fell across exactly between the demarcation of the Red and Yellow Zone, and further that the wall had been built a long time ago, before his time, because he did not build it.

60.  But wall or door or whatever regardless, did the 1^st defendant not give evidence just a moment ago that there was no barrier between the Red and Yellow Zone, so he could enter freely?

61.  The 1^st defendant agreed, but then he immediately put forward another story: it was because he was doing business and there were customers in the Store, so he did not welcome the plaintiff and others to enter via the shop front. But he had allowed them to enter via the side alleyways. But he did not understand why they did not use them, and they left.

62.  Even more bizarrely, the 1^st defendant then suddenly claimed that the police officers had in fact entered the Yellow Zone via the shop front, and had further taken up a table there to take a police statement from him! (Quite why there was still a table in the Yellow Zone given that the 1^st defendant claimed that he had moved everything out was not explained!) However, the plaintiff and the bailiff somehow did not follow the police officers to enter the Yellow Zone, and 1^st defendant said he did not understand why.

63.  In summary, according to the 1^st defendant’s evidence given under oath in court, the following happened on 21 March 2014:

i)    he never refused the plaintiff and others to enter the Store to re-possess the Yellow Zone;

ii)   it was Mr. Choi who refused entry because the bailiff insisted that they must enter via the shop front and “break down the wall” and “destroy the shop”;

iii)  he allowed them to enter but the passage to the Yellow Zone was blocked by kitchen stuff which he had moved into the Red Zone;

iv)  the passage was blocked by a door;

v)   the passage was blocked by a wall which happened to have been built long time ago exactly on the demarcation line between the Yellow and Red Zone;

vi)  he refused entry because there were customers in the Store; or

vii) the police officers did enter the Yellow Zone and even took a police statement from him there, but for some unexplainable reasons, the rest did not follow them.

64.  It is rather obvious that much of these defy common sense (e.g. the bailiff insisting on breaking down a wall and destroying the Store, or the bailiff not using side passages for entry despite being shown etc.). Further, the scenarios are mutually exclusive, and none of such are ever mentioned in the 1^st defendant’s witness statement. Indeed, none are even consistent with the scenario stated in his witness statement (paragraph 5, page 5, Trial Bundle A). Yet, the 1^st defendant, whilst under oath on the stand, confirmed with the court at time or another that each scenario was true.

65.  Further, as pointed out by Mr. Phang, the plaintiff’s counsel, the attitude stated in the 1^st defendant’s declaration dated 5 November 2015 (see paragraph 18 above) was clearly inconsistent with the 1^st defendant’s claim that he “never” refused anyone to enter (or any of the 7 scenario stated above).

66.  In fact, what is clear in this declaration (which is entirely consistent with the plaintiff’s case) is the 1^st defendant thinks he has the right to defy a court order despite “not wanting” to do that.

Conclusion

67.  When analysing the evidence before the court, it is obvious that Ho was the credible witness: he admitted that he did not attend the Store every time with the plaintiff, but nevertheless, the difficulties he described was entirely consistent and supported by numerous documents including the aforementioned court documents, correspondence with the bailiff, police, District Land Office and photographs etc..

68.  On the other hand, given that judgment has already been entered, it was astonishing that the 1^st defendant chose to give evidence in court to attempt to persuade the court that he did the exact opposite: that he had never occupied the trespassed land and he had never refused anyone to enter.

69.  It should have been clear to anyone that such a position was never attainable because this would simply beg the question: if the defendants never occupied the trespassed land and never refused the plaintiff and others to enter, why would the 1^st defendant make the Declaration in opposition to the plaintiff’s application for directions to facilitate the recovery of the Lot (see paragraph 18 above)?

70.  It is clear the 1^st defendant has no concern for the need to tell the truth in court, and shamelessly disregard his duty in law under oath. His attempts to maintain such obviously unattainable positions were the most blatant display of dishonesty. Having to sit through listening such continuous outpouring of gibberish was not only frustrating, but insulting to the court’s intelligence, and a complete waste of the court’s time.

71.  This court finds that the defendants had all along continued to trespass the plaintiff’s land and had deliberately frustrated the execution of the re-possessing procedure by the plaintiff and the bailiff by refusing anyone assess into the Lot. They had gone into extraordinary measures in order to do so, including building of fences and gates on Government land.

72.  This is the most exceptional case: this court has not seen a more blatant attempt to defy a court order nor a more outrageous disregard of the law.

Aggravated damages

73.  The plaintiff is claiming for both aggravated damages and exemplary damages.

74.  The distinction between the two is set out in Clerk & Lindsell on Tort (22^nd ed: 2018) at 28-133 and 28-134:

“Where the manner of commission of the tort was such to injure the claimant’s proper feelings of dignity and pride, higher damages than would otherwise have been justified may be awarded. Such aggravated damages, as they are known…From the defendant’s point of view the award may appear to incorporate an element of punishment imposed by the court for his bad conduct, but the intention is rather to compensate the claimant for injury to his feelings and the amount payable should reflect this.

Aggravated damages are thus, in theory, quite distinct from exemplary or punitive damages which are awarded to teach the defendant that “tort does not pay” and to deter him and other from similar conduct in the future…it has been made clear that exemplary damages may be awarded only in certain classes of case the maintenance of distinction is important…So in principle where damages for distress, humiliation and injury to feelings have been fully compensated as part of the “basic” damages, they should not subject of further compensation in the form of aggravated damages.”

75.  The object of aggravated damages is to compensate a claimant for mental distress or physical inconvenience.

76.  Ho has given evidence on the distress and anxiety he and the plaintiff have suffered during the whole procedure. However, I do not think that there is any evidence of a causal link between the plaintiff’s cancer and this case, although dealing with this case whilst he was unwell would have no doubt caused further distress under the circumstances. Further, although one might suspect that the alleged intimidation acts against the plaintiff (including the false reporting to ICAC and police) might be something the defendants could be involved in, there was no direct or first-hand evidence of such.

77.  Nevertheless, the court has witnessed first-hand the unreasonable and unapologetic manner that the 1^st defendant had conducted himself during the trial which would only add insult to injury. I have no doubt that the 1^st defendant must have conducted himself in the same manner in his dealings with the plaintiff in his attempt to frustrate and drag out the re-possession process (which, of course, are supported by plenty of documentary evidence).

78.  I am of the view that the award of mesne profit alone is inadequate to fully compensate for the distress caused by the defendants’ conduct, and for this, I would make an award for aggravated damages of HK$20,000.

Exemplary damages

79.  The objectives for exemplary damages are punishment, deterrence and denunciation: Allan v Ng & Co. (a firm) [2012] 2 HKLRD 160 at paragraph 86 per Fok JA (as he then was).

80.  In A v Bottrill, Lord Nicholl stated, at paragraph 20:

“In the ordinary course the appropriate response of a court to the commission of a tort is to require the wrongdoer to make good the wronged person’s loss, so far as a payment of money can achieve this. In appropriate circumstances, this may include aggravated damages. Exceptionally, a defendant’s conduct in committing a civil wrong is so outrageous that an order for payment of compensation is not an adequate response. Something more is needed from the court, to demonstrate that such conduct is altogether unacceptable to society. Then the wrongdoer may be ordered to make a further payment, by way of condemnation and punishment.”

81.  In Fu Wan Sang and Ors v Fu Man Kwong and Ors (unrep., HCA 16108/1999, 31 March 2003), Lam J (as he then was), stated:

“It is important to distinguish between exemplary damages and aggravated damages. The proper approach is to consider whether aggravated damages should be awarded and what is the appropriate amount for such damages first. After that has been done, this court should ask itself whether the award of general and aggravated damages is inadequate to punish and deter a defendant. If it is inadequate, it has to asked whether the criteria in Rookes v Barnard [1964] AC 1129 for the award of exemplary damages could be satisfied and if yes, what is the appropriate figure for exemplary damages.”

82.  Given the exceptional circumstances of this case, I am of the view that the award of general and aggravated damages is clearly inadequate to punish and deter the defendants.

83.  As the 1^st defendant claimed, his business was successful. And if the plaintiff was allowed to re-possess his land, he would need to move his kitchen equipment and other “stuff”, and re-organise his kitchen operation (as he claimed and perhaps one of the few things he said in court that I would accept as true). As such, it is not difficult for the court to reasonably infer that the defendants must have deliberately defy the court order, and frustrated the efforts to enforce the order by the bailiffs (and police) because they wished to delay the procedure as long as possible so that they could maintain the ongoing successful and profitable operation of the Store. The fact is, they have managed to successfully defied the law for some 27 months.

84.  This would fall into second category in Rookes v Barnard [1964] AC 1129 where “the defendant’s conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff.”

85.  Having considered the case of Allan (as above) in particular the Table of Hong Kong Cases on Exemplary Damages annexed to the judgment, and also the case of Lau Oi Kiu v Man Chun Shing & Anor [2015] 4 HKC 73, I think an appropriate award should be HK$30,000.

Order

86.  I would therefore order that Judgment be entered against the 1^st and 2^nd defendants and further order the following awards:

a)  HK$218,667 as mesne profit for trespass

b)  HK$20,000 as aggravated damages

c)  HK$30,000 as exemplary damages

to be jointly and severally paid by the 1^st and 2^nd defendants to the plaintiff, with interest, in the case of a) at half judgment rate from 11 March 2014 to 1 November 2016, and thereafter at judgment rate until payment, and in the case of b) and c), from the date of judgment at judgment rate until payment.

87.  As for costs, given the conduct of the defendants, I will give an order nisi that the 1^st and 2^nd defendants be jointly and severally liable for the plaintiff’s costs of this action on an indemnity basis, to be taxed if not agreed.