XCHRX CHAN WOON CHEUNG v. CHAN YUK CHING AND ANOTHER

HCA1377/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1377 OF 2001

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D E C I S I O N

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1. This matter arises out of a dispute over a plot of land in San Tau Kok Village, Tai Po. The parties are members of the same family; the defendants are the sons of the plaintiff's elder brother Chan Chi Cheung. On 23 March 2001, the plaintiff obtained ex parte injunctions against the defendants as follows :

a) an injunction to restrain the defendants whether by themselves, singly or jointly, their servants or agents or otherwise whosoever from trespassing or staying on or otherwise entering in or upon the piece or parcel of ground situate lying and being at Tai Po, New Territories, Hong Kong and known as All That Section G of Lot No. 1114 (otherwise known as Lot No. 1114G) in Demarcation District No. 23 ("the Possessed Land");

b) an injunction to restrain the defendants whether by themselves, singly or jointly, their servants or agents or otherwise whosoever from molesting, interfering with or disturbing the plaintiff, members of the plaintiff's family, their employees or servants or otherwise causing annoyance, inconvenience or disturbance to the plaintiff, members of the plaintiff's family, their employees or servants; and

c) an injunction to restrain the defendants whether by themselves, singly or jointly, their servants or agents or otherwise whosoever from damaging the Possessed Land or damaging, dismantling, pulling down, demolishing or removing any chattels or things thereon or therefrom.

2. The matter should have come before the summons judge on 30 March 2001 but was adjourned by consent with directions as to the filing of affirmations. The injunctions were by consent continued until further order. A Statement of Claim was filed on 24 July, a Defence on 17 September and a Reply on 16 October 2001. There are now before the court two main affirmations by the 1st defendant and four by the plaintiff, plus a number of supporting affirmations on both sides and many exhibits.

3. The defendants now seek to have the injunctions set aside, on the primary ground of material non-disclosure by the plaintiff and also on the grounds that there is now no serious issue to be tried, and that the balance of convenience does not favour the plaintiff. The plaintiff seeks to have the injunctions continued until the trial.

The pleadings

4. The plaintiff's case as pleaded is that his mother Cheng Yee Kiu exclusively occupied the Possessed Land from the 1950s until 1989. She and other family members farmed it. No one ever queried her right to occupy it. She died on 14 March 1989 and the plaintiff took over exclusive possession by storing farming tools and equipment on the land. When he was not in Hong Kong he entrusted his second brother Chan Wing Cheung to manage it for him, and the latter exercised exclusive possession on behalf of the plaintiff, when the plaintiff was not in Hong Kong until he died in April 2000.

5. The plaintiff claims that he surveyed the Possessed Land in 1993 and erected a brick wall to separate it from the adjacent Lot No. 1114C1. He paved it for vehicular access to the village, and later for car parking, in 1994. He installed brick wells (I do not know if this means walls) intermittently on the boundary in 1998.

6. Accordingly the plaintiff claims adverse possession against the owner of the Possessed Land or anyone deriving title from the owner under the operation of section 17 of the Limitation Ordinance.

7. He further pleads that he allowed a construction company temporary access in 2000 and also that on about 29 April 2000 the defendant's mother trespassed on to the Possessed Land by planting sugar canes which he promptly removed. On 13 March 2001 the defendants trespassed on the Possessed Land, purporting to carry out a survey and fence the land; the plaintiff ejected. They trespassed again on 22 March and dismantled some of the plaintiff's brick wells and concrete blocks. The plaintiff ejected them with the assistance of the police.

8. The plaintiff's claim is simply for an injunction against trespass, and for damages.

9. The defendants' pleaded case is that the plaintiff's mother could not have established exclusive possession because it was their mother Yip Yuen Kiu who farmed the land from the 1950s to 1966 and then from 1984 until 29 April 2000 when the plaintiff unlawfully ejected her. In any event the plaintiff's mother was born in 1893, and resided in an old people's home from 1986 until she died in 1989. Neither Chan Wing Cheung nor any other family members assisted her in farming. The plaintiff's possession after 1989 is denied; the defendants say that he was resident in the United Kingdom until 1993. He himself trespassed on the Possessed Land and Lot No. 1114C SS1 in 1993. He did not pave or level the Possessed Land until 2000.

10. The defendants' mother obtained legal advice in 2000 that she could not claim a possessory title because she could not establish 20 years' adverse possession. So the defendants who wanted the Possessed Land for access to their houses entered into a lease of the Possessed Land dated 7 March 2001 from representatives of the Chan Kwong Un Tong, which was approved later by the manager thereof. The Possessed Land came from the original Lot No. 1114C and is still the property of the Tong.

11. It was in accordance with the terms of the lease, which required them to survey the Possessed Land that the defendants entered on the land on 13 March 2001. The incident on 22 March occurred when they entered on the adjacent Lot No. 1114C SS1 (which they had a permit from the owner to level) and removed bricks wrongly put there by the plaintiff.

12. It appears from the Reply that the plaintiff does not deny that he lived in England until 1993 though he says that he returned to Hong Kong regularly and spent most of each year here since 1991. As to the purported lease from the Chan Kwong Un Tong he denies its validity and its admissibility. He says that the Tong was divested of all its rights and interests in the Possessed Land in 1933 and could not grant a lease of it.

13. As the case is pleaded, then, the plaintiff is claiming an injunction against trespass by the defendants. There is no dispute that at least from 29 April 2000 he has been in possession. Leaving aside any question of adverse possession, as a bare possessor he would have a right to retain possession against a trespasser. The defendants claim a jus tertii in that they claim to have a lease from the true owner. The plaintiff disputes that ownership on the grounds of his own adverse possession and that the alleged landlord is no longer the true owner.

The dispute

14. To attempt to put in a nutshell the immediate problem which has given rise to these proceedings, it is that the defendants have built small houses for themselves and their brother in San Tau Kok Village. Certificates of compliance were issued on 20 March 2001. They want vehicular access to the houses. They cannot get it, except over the Possessed Land. However the plaintiff uses the Possessed Land as a car park for his tenants in his own nearby house, and is not prepared to let the defendants use it for access. This problem is exacerbated by bad blood which has existed between the plaintiff and his brother Chan Chi Cheung, and the latter's sons, the defendants, for many years.

15. It is difficult to describe the layout of the land without showing a plan. One is attached to the Statement of Claim. Briefly the Possessed Land, Lot No. 1114G is in the form of a narrow strip running into the village from the Ting Kok Road. Looking inwards from the road, on the right side is Lot No. 1092B RP which does not concern us, but immediately behind it are Lot Nos. 1098A and B. The plaintiff and his son have houses on these lots. Behind Lot No. 1098 and on the right side of the Possessed Land is Lot No. 1114C SS1 which belongs to the defendant's aunt Chan Moon Kui, and on the far side of that, and partly behind Lot No. 1098 lie the defendant's lots.

16. On the left side of the Possessed Land and adjoining it lies Lot No. 1114F RP which the plaintiff owns; he bought it in 1994. It extends for nearly the same length as the Possessed Land. Beyond it, as one looks inwards from the main road, lies Lot No. 1114E RP which the defendants own; it adjoins the boundary of Lot No. 1114C SS1, further back. They also own another strip of land, Lot No. 1114B RP which lies to the left side of Lot No. 1114F RP.

17. The defendants say that they cannot get access to their houses by turning right and passing over Lot No. 1092B RP and then round the back of Lot No. 1098 because the way is barred by a gate. They have tried, but failed, to get Government approval to construct a road in over Lot Nos. 1114B RP and 1114E RP, i.e. passing round the far end of the Possessed Land on to Lot No. 1114C SS1, which they have a licence from their aunt to enter. So the only way for vehicular access from the Ting Kok Road, over the Possessed Land on to Lot No. 1114C SS1, to their own Lot No. 1114E RP which is where according to the 1st defendant they want to park their cars.

18. The matter is complicated by the fact that the genesis of the demarcation of the Possessed Land is uncertain. In the Block Crown Lease dated 1905, Lot No. 1114, with an area of 1.15 acres, was leased to Chan Kwong Un. By a Division of Property dated 31 July 1933, the Chan Kwong Un Tong, which was then the registered owner divided the Lot into six sections, A-F and assigned them to different persons. The total acreage of these six lots amounts to 1.15 acres. Lot No. 1114G was not created by the Division of Property. How it comes to be in the survey plans is not clear.

The evidence

19. In support of his application for ex parte relief the plaintiff affirmed that he was born on 15 May 1933 and was the owner of the Remaining Portion of Section F of Lot No. 1114, which he had bought on 1 October 1994. He went on :

"3. I was informed by my late mother, Cheng Yee Kiu and verily believe that my late mother had, since about the 1950s, begun occupying a piece of land which is situated to the north-east of and adjoins my land ('the Possessed Land') and that she used to carry out agricultural activities thereon, including ploughing it and growing sweet potatoes thereon. I was further informed by my late mother and verily believe that she came to occupy the Possessed Land in the 1950s when she noticed that it appeared to be derelict and that no other person was occupying or using it.

4. My late mother died in about 1989, since when I took over and continued with the exclusive possession and occupation of the Possessed Land by storing farming tools and equipment thereon."

20. The plaintiff went on to affirm how he had dealt with the land since he applied for permission to build a house nearby in 1992. He said that after the house had been built in about 1995 he lived on the ground floor and let out the first and second floors; he had then used the Possessed Land for parking his car and had allowed his tenants to park there rent-free. He had also taken various steps to put brick wells about four feet high and concrete blocks intermittently on the boundary. In February 2000 he had allowed a construction company temporary right of way over the Possessed Land. Because this had caused dissatisfaction among some neighbouring owners, particularly his own brother Chan Chi Cheung, he had had the Possessed Land surveyed and a dimension plan was produced in October 2000.

21. The plaintiff affirmed to trespass by a surveyor instructed by the defendants on 12 March 2001. He had told the surveyor to tell his clients to produce their title to the land. He had then carried out a land search and had found that the original Lot No. 1114 had been divided into six parts, not including Lot No. 1114G, though the latter was shown on the Demarcation District Plan which he said (I think wrongly) was prepared in 1905.

22. He went on to describe the trespass by the defendants and their mother on 22 March 2001 when the defendants had dismantled most of the brick wells and concrete blocks. On this and the earlier occasions the police had to be called before the trespassers would go away.

23. There are now before the court a great number of affirmations by the defendant's side. Most of the evidence comes from the 1st defendant; the rest are from supporting witnesses. There are also three further affirmations from the plaintiff which contain an inordinate amount or argument and submissions plus supporting affirmations from other witnesses. I will not rehearse the evidence here. It supports the pleaded cases put forward by each side. I have however dealt with the plaintiff's first affirmation in some detail because of the claim of material non-disclosure.

24. What does now appear is that the plaintiff admits having been resident in England until 1993, though he says he spent more time here since 1991, and still spends a lot of time in England. As to the age and infirmity of his mother he explains that he never said that she farmed until 1989 and that in later years another of her sons, Chan Wing Cheung was asked to manage the Possessed Land for her. There is an affirmation by Chan Wing Cheung's widow, Tsui Sau Ying, which confirms that, at least to the extent that after the mother's death Chan Wing Cheung managed the Possessed Land on behalf of the plaintiff (presumably at the time the plaintiff says he was storing farming tools and equipment on it.)

25. In fact what farming tools and equipment were stored is not clear; the plot is long enough, at least, for several large farming machines. Further, various aerial photographs are now available. One from 1987 appears to show only an unpaved track passing over the suit land towards the village with uncleared bush on either side of it. Those from 1992 and later show some vehicles parked, and one dated 1997 shows that the whole of the Possessed Land and the plaintiff's adjoining land has been paved. But the pictures always show uninterrupted access at least for pedestrians through the Possessed Land to the plots further away from the main road.

26. As to the defendants' purported lease from the Chan Kwong Un Tong the plaintiff says that he believes that some or all of the Possessed Land came from Lot No. 1114F RP, that a conspiracy or fraud was committed by the trustee of the Tong in 1933 and that he believes that the purported lease was fabricated. In any event, he says that he was not shown the lease, and neither were the police, on 13 or 22 March 2001. There is nothing in the 1st defendant's second affirmation to indicate that the lease was brought to the plaintiff's attention before he applied for the injunction.

Material non-disclosure

27. In American Cyanamid Co. v. Ethicon Ltd [1975] AC 396 the principle stated by Lord Diplock was that the court should see on the evidence available whether the plaintiff has any real prospect of succeeding in his claim at trial, in other words that there is a serious question to be tried, and then go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief sought.

28. However where an applicant for an ex parte injunction is guilty of material non-disclosure the injunction may be set aside. For an exposition of the principles relating to material non-disclosure I can do no better than to refer to the judgment of Deputy Judge Poon in Rever (AMA) Salon Ltd v. Kung Wai Por Danny [2001] 1 HKC 241 at 246 :

" It is trite law that an applicant for an ex parte injunction has to make a full and frank disclosure of all material facts. The applicant must proceed with the highest good faith. The fact that the court is asked to grant relief without the person against whom the relief is sought having the opportunity to be heard makes it imperative that the applicant should make full and frank disclosure of all material facts : R v. Kensington Income Tax Commissioner, ex p Princess Edmond de Polignac [1917] 1 KB 486 at 514, per Scrutton LJ.

The court was not concerned with whether the matters not disclosed would, if they had been disclosed, have caused it to refuse to grant the ex parte order; and the test was whether the court should have these matters in the weighing scales : Citibank NA v. Express Ship Management Services Ltd [1987] HKLR 1184 (CA) at 1190D.

Materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers : see R v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy MR at p 504, citing Dalgish v. Jarvie (1850) 2 Mac & G 231, 238, and Browne-Wilkinson J in Thermax Ltd v. Schott Industrial Glass Ltd [1981] FSR 289, 295.

The applicant must make a full and frank disclosure of all relevant matters, including those against his application. For it is difficult for a judge upon an ex parte injunction at short notice to grasp all relevant points : O'Regan v. Iambic Productions Ltd [1989] NLJ 1378."

29. The primary ground for the application to set aside the ex parte injunction is that the plaintiff, in obtaining it, misled the court. He did not disclose his mother's age (she was born in 1894) but in effect gave the court to understand that she was in actual possession and occupation of the Possessed Land up to the time of her death in 1989. In fact she was in an old people's home from 1986. He could not himself have had continued possession and occupation of the Possessed Land between 1989 and 1993 because he was in England. Further there could not have been uninterrupted or undisputed possession by the plaintiff even after that; on his own later evidence the defendant's mother tried to plant sugar canes on part of the Possessed Land in 1994.

30. It is obvious that the plaintiff is now telling a rather different story from that which he told the court in support of his ex parte application. Was the non-disclosure material? The defendants say that it was because the disclosure of these facts would affect the courts consideration as to whether the plaintiff's claim on adverse possession.

31. It is unfortunate that so much emphasis has been laid on the plaintiff's claim to adverse possession, because a bare possessor can sue for trespass. See Clerk & Lindsell on Torts, 17th Edn at para. 17-09 :

"Trespass is actionable at the suit of the person in possession of land who can claim damages or injunction. A tenant in occupation can sue, but not a landlord, except in cases of injury to the reversion. Similarly a person in possession can sue although he neither is the owner nor derives title from the owner, and indeed may be in possession adverse to the owner."

32. In order to obtain an ex parte injunction against a trespasser with no better title, all the plaintiff needed to do was to show the court that he was in possession and that so far as he knew the trespasser had no better title than himself. This his affirmation covered. He showed that although Lot No. 1114 had once belonged to the Chan Kwong Un Tong, the Tong had conveyed it in six portions, not including portion G, to others, so prima facie portion G had no owner. He said that he had challenged the plaintiffs, through their surveyor, to show their title if any and they had not. There is no evidence that he knew at that stage that the defendants were claiming to be the lessees of the Chan Kwong Un Tong.

33. If the plaintiff had known that the defendants were claiming to be tenants, he should have disclosed it; but there is no evidence that he knew it. As far as he knew at that stage, the defendants who had no better title than he, trespassed on land which he possessed adversely to the owner, whoever that may be. Certainly the basis of his adverse possession now appears more tenuous than it must have appeared to the court from his first affirmation but even so, the non-disclosures in respect of that were not material to the question of whether he should have an interim injunction against trespassers with no better title than himself.

Serious question to be tried

34. There is more than one serious question to be tried. If at trial the defendants can establish that they hold a valid lease then in order to succeed against them the plaintiff will have to establish adverse possession. Granted that, as I have indicated, the basis for his claim of adverse possession now appears more tenuous, it will only need to be proved if the lease is established. If it cannot be established - and in order to establish it, the defendants will have to prove that title to Lot No. 1114G remains with the Tong as well as that the lease itself is valid and effectual, factual possession is not disputed and the plaintiff still has his rights as a bare possessor, so he may succeed on that basis.

Balance of convenience

35. The governing principle is that the court should first consider whether if the plaintiff succeeds at trial he would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction. If damages would be an adequate remedy, and the defendant would be in a position to pay them, no injunction should be granted. If damages would not be an adequate remedy, the court should consider whether, if the injunction were granted, the defendant would be adequately compensated by the plaintiff's undertaking as to damages. If so, and the plaintiff would be in a position to pay them, there would be no ground to refuse the injunction. It is where there is doubt as to the adequacy of the respective remedies in damages that the question of balance of convenience arises. Where other matters are evenly balanced it is prudent to preserve the status quo. The extent to which the disadvantages to each party would be incapable of being compensated if he succeeds at the trial is a significant factor in assessing where the balance of compensation lies. See Fellowes & Son v. Fisher [1976] 1 QB 122 CA.

36. As I remarked at the hearing, this is only a car park. The plaintiff lets his tenants park on it. The defendants want to drive over it to get to their own houses. It should be no big problem. One would have thought that sensible men could readily reach some agreement acceptable to both sides. I do not know what costs the parties have incurred so far but given the volume of the affirmations they are probably high. The costs of going on to trial will be higher. Unfortunately there is a family dispute here, so no one can be relied on to take a sensible approach and the court cannot force litigants to do that. So a trial there must be.

37. If no injunction is granted and the plaintiff succeeds at trial his damages will not be great; mostly they will be the reinstatement of his brick wells and concrete blocks. He should have no other monetary losses, because he says that he allows his tenants to park free of charge, and in any event there should be no inconvenience to his tenants if the defendants use the Possessed Land only for access and not for parking themselves. If the defendants succeed at trial, and an injunction is granted meantime, their loss will be several months' rights of access. Whether they have incurred any cost for parking their cars elsewhere is not clear. However they own Lot No. 1114B RP so presumably can park there.

38. The parties are therefore pretty much evenly balanced as regards any financial costs which may be incurred. Prudence dictates that the status quo should be maintained. This is particularly so here where the injunctions have already subsisted since 30 March this year, and where there is such a long-standing dispute between the parties. The prudent course is to leave the injunctions in place until the trial. The plaintiff must however not be allowed to sit on his interlocutory injunctions; the case should come to trial as soon as possible. I will make an order for directions and for early trial under Order 29, rule 7 and rule 5 of the Rules of the High Court.

39. I therefore order that the injunctions granted herein on 30 March 2001 be continued until further order. I will hear the parties as to directions and costs, on a date to be fixed, before 21 December 2001.