KO SIU PING v. CHAN SHU HUNG

HCA 1992/2018

[2020] HKCFI 2993

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1992 OF 2018

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D E C I S I O N

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A. INTRODUCTION

1.  The Plaintiff was the former landlord of shop premises which she had acquired by way of adverse possession.  The Defendant was her former tenant. After recovering the premises from the Defendant through the bailiffs, the Plaintiff had been doing business there.  However, the Defendant obstructed the entrance, changed the lock and broke in.  The Plaintiff sued the Defendant for trespass.  Since the Plaintiff had surrendered the premises to the Urban Renewal Authority (“URA”), she now seeks summary judgment against the Defendant for damages only.

2.  The Defendant disputes the Plaintiff’s entitlement to the whole shop. He claimed that he had rented half of the premises from the Plaintiff and half from a person called Wong.  In recovering the entire premises from the Defendant through LT Proceedings, the Plaintiff’s then representative had made dishonest statements to the Lands Tribunal as to her rights over the premises, which the Plaintiff had adopted.  The Defendant claims to have fresh evidence which would have entitled him to set aside the judgments of the Lands Tribunal.  He also seeks to set off damages which he might recover from the Plaintiff for trespassing that half of the premises not belonging to the Plaintiff and for breach of the Plaintiff’s undertaking as to damages when she sought the interim injunction.

B.  BACKGROUND

3.  The facts are largely taken from the written submission of Ms Phyllis Lee, counsel for the Plaintiff.

4.  The Plaintiff had been the occupier of a shop at G/F, No. 56D, Yue Wah Mansion, Yue Man Square, Kwun Tong (“56D”) since 1968.

5.  The Defendant was and is an umbrella seller trading as Sam Hung Hong (三雄行) since 1997.

6.  On 21 May 2013, the Plaintiff entered into a tenancy agreement with the Defendant, to rent 56D to him at a monthly rent of HK$4,000 from 1 June 2013 until 56D was to be recovered by the Government.

7.  The Defendant defaulted in rental payments in or around late 2013, so the Plaintiff took out proceedings in the Lands Tribunal to recover arrears of rent and/or possession of 56D, ie LDPE 1261/2013 (“2013 LT proceedings”) and LDPE 1203/2014 (“2014 LT proceedings”) (collectively “LT proceedings”). The Defendant could not get leave to appeal.  Eventually, the Defendant was evicted by the bailiff on 9 March 2015 and possession of 56D had been returned to the Plaintiff since then. 

8.  Allegedly since around mid-2015, the Plaintiff with the assistance of her daughter, commenced business of a toy shop under the name of “Good Ma Ma Shop”（好媽媽商店）at 56D.  However, the date of the first business registration certificate produced by the Plaintiff showed the commencement date to be 1 September 2017.

9.  Following the Defendant’s eviction from 56D in 2015 to 30 July 2018, the Defendant had not physically interfered with the Plaintiff’s use of 56D.  However, the Defendant, admittedly, unilaterally registered his son, Chan Fat Ka as the user of electricity at 56D in October 2017 without the Plaintiff’s knowledge and consent. 

10.  Upon knowing about the change of registrant, the Plaintiff immediately made enquiries and re-registered herself as the user with CLP Power Hong Kong Limited. 

11.  At or around 8 pm on 30 July 2018, the Plaintiff discovered umbrellas and bags being hung up by ropes at the external wall and door of 56D with sign boards stating “三雄行”, “三雄行雨傘” with the Defendant’s name and contact number placed on the floor and leaning against the door of 56D.  The door of 56D was fully covered and the only entrance and exit to 56D was obstructed.  The Plaintiff could not gain entry or do business there.

12.  The Plaintiff made repeated requests and demands for the Defendant to remove the items from 30 July to mid-August 2018 but to no avail.

13.  On 24 August 2018, the Plaintiff issued the writ in this action, seeking an order:

(1)     That the Defendant do demolish or remove items and structures which were hanging or placed on the outside wall, floor and door of 56D;

(2)     That the Defendant be restrained from:

(a)     Erecting or placing or hanging any structures and/or items on the outside wall, door and floor of 56D;

(b)     Obstructing the entrance of 56D; and

(3)     For damages, including loss of profits, to be assessed.

14.  On 31 August 2018, the Plaintiff obtained interim relief as prayed for in paragraphs 13(1) and (2) above (“the Injunction Order”).

15.  In breach of the Injunction Order, until at least late June 2019, the Defendant had continued to carry out acts that obstructed the entrance of 56D.  He replaced the Plaintiff’s door lock, wrote characters on the door to 56D with red and black paint, put black paint and newspaper on the external wall of 56D, broke into 56D, painted Chinese characters on the wall of 56D and put a lock on the door inside 56D. 

16.  The Plaintiff and her daughter, as occupier and store operator of Good Ma Ma Shop at 56D, had surrendered possession of 56D to the URA on 12 August 2019 permanently, in return for compensation.  The Plaintiff therefore seeks damages including loss of profits now.

17.  The URA has commenced an action in the High Court for, amongst others, an injunction against the Defendant, prohibiting him from entering into or possessing nos. 407-431 Kwun Tong Road and Nos. 34-62 Yue Man Square, which covered the location of 56D.

C.  DEFENDANT’S CASE

18.  Whilst acknowledging that the Plaintiff had been in adverse possession of Unit 56D and so there were no registered floor plans, the Defendant disputes the Plaintiff’s entitlement to occupy the entirety of 56D.  His pleaded case is that:

(1)     Before 2013, the Plaintiff and Mr Wong Chung Yim (“Wong”) jointly occupied 56D; the Plaintiff occupied the front portion (“Plaintiff’s portion”) and Wong the rear portion and cockloft (“Wong’s portion”).

(2)     Since 2012, the Defendant was authorized by Wong to use half of the G/F shop and half of the cockloft of 56D.  Wong received half year’s rent from the Defendant.  There was a tenancy agreement (“Wong TA”).

(3)     Later, Wong introduced the Plaintiff to the Defendant. The Plaintiff rented half of the G/F shop to the Defendant.

(4)     Wong lived and worked in Mainland China on a long term basis.  In August 2018, Wong returned to Hong Kong to register with URA and he registered and admitted that the Defendant was his lawful tenant.

(5)     The lease between Wong and the Defendant was valid and subsisting such that the Defendant was a co-occupier of 56D, with rights to make use of the entrance and wall outside 56D.

19.  The Defendant also contends that he is entitled to set aside the judgments in the LT Proceedings on the ground of fraud in the light of “fresh evidence” showing that the Tribunal was misled by the Plaintiff as to the area of 56D she was entitled to.  The fresh evidence consisted of affirmations made by:

(1)     Wong concerning his “ownership” and earlier use of 56D, as well as the reasons for his non-participation in the LT proceedings.

(2)     Two construction contractors engaged by the Defendant explaining how the former partitions in 56D were demolished to form one larger unit after the Defendant entered into the 2 leases with the Plaintiff and Wong.

(3)     Two members of the local community who visited 56D around the time when the Defendant decided to lease the unit from the Plaintiff and Wong and to convert it into one larger shop.

20.  Mr Joshua Chan, counsel for the Defendant, contends that such fresh evidence would have addressed a number of critical issues which were left unresolved in the LT Proceedings such as the parcel of land which was owned by Wong and leased to the Defendant and the reason why Unit 56D, which was ostensibly one single shop unit, was owned by 2 different persons.

D.  ISSUES

21.  The issues for this summons can be classified as follows:

(1)     Whether the Plaintiff had title or was entitled to possession of the whole of 56D;

(2)     Whether the Defendant was entitled to set aside the Lands Tribunal judgments for fraud on the bases of fresh evidence; and

(3)     Whether the Defendant’s acts complained of amounted to trespass.

E.  LEGAL PRINCIPLES FOR SEEKING SUMMARY JUDGMENT

22.  The applicable principles on an Order 14 application are trite and have recently been summarized in On Loong Investment Company Ltd v IO of Wah Luen Industrial Centre (HCA 341/2014, Unrep, 8 January 2016), Au-Yeung J, at §20:

(1)     The burden is on the defendant to show a bona fide defence or some other reason for a trial.  This is normally done by affidavit and it is incumbent upon the defendant to “condescend upon particulars” in such affidavit;

(2)     The mere assertion in an affidavit of a given situation by the defendant does not, ipso facto, ground leave to defend;

(3)     Order 14 is only for clear cases, and ought not to be applied in cases where there are serious material factual disputes, or a difficult point of law not fit for summary determination, unless it is obvious that the defence put forward is “frivolous and practically moonshine”; and

(4)     The Court should not embark on a mini trial on affidavits.  Where there are factual disputes, the issue is not whether the defendant’s assertions are to be believed; it is whether those assertions are believable.

23.  The Court must, of course, also scrutinize the strength of the Plaintiff’s case and the veracity of the Plaintiff’s evidence.  If the Court harbours any doubt about the Plaintiff’s case, the Defendant should be granted unconditional leave to defend: Billion Silver Development Ltd v All Wide Investments Ltd [2000] 3 HKC 262 at 266D-E, 268C-D.

F.  DISPUTE AS TO FACTS

24.  Ms Lee points out that the Defendant had provided 3 different versions of the Wong TA, 2 of which bore alterations which were questionable. She queried the existence of the Wong TA, challenged the certainty of its terms and the location actually rented.

25.  She also points out that the Defendant has put forth different sketches as to Wong’s portion and the Plaintiff’s portion, mixing up their front and rear locations.

26.  The Plaintiff also suggested that there were other units in Yue Man Square (431-433 and 56D1) which were occupied by Wong instead.

27.  The Court does not have to resolve these points by a mini-trial on affirmations, as they are factual and credibility issues.  For present purposes, I shall take the Defendant’s case at its highest and assume that he will come up to proof on the facts.

G.  ISSUE 1 – WHETHER THE PLAINTIFF WAS ENTITLED TO POSSESSION OF THE WHOLE OF 56D

28.  The Plaintiff’s case is well supported by documents and judgments of the Lands Tribunal and Court of Appeal.

29.  Mr Chan submits that there are triable issues as to (a) whether the Plaintiff alone or with Wong jointly had been occupiers of 56D; (b) whether each of them had entered into a lease with the Defendant; and (c) the area of the Plaintiff’s portion.

30.  Mr Chan relies on the following legal propositions.

31.  As the Plaintiff had allegedly entered into possession in 1968 while the Defendant alleged that the Plaintiff and Wong had been in joint occupation since 1987/1988, any right of action would have accrued before 1 July 1991.  The necessary period of occupation to extinguish the paper owner’s right to possession was 20 years under s.7 of the Limitation Ordinance (Cap 347): Land Law in Hong Kong (4^th ed) at §6.7.

32.  Where more than one squatter has possession simultaneously, the title acquired is held by the squatters as joint tenants, in the absence of a contrary intention, but one alone of the joint squatters cannot claim title alone: Jourdan and Radley-Gardner on Adverse Possession (2^nd ed) at §§20-68.

33.  At common law, each co-owner is as much entitled to possession of any part of the land as others.  No one co-owner (whether as joint tenant or tenants-in-common) has a better right to the property than another, so an action for trespass against the co-owner will not normally lie unless there is some act amounting to ouster of the other co-owners: Megarry and Wade, The Law of Real Property, 9^th ed at §§7-056, 12-005; Tang Tak Sum v Tang Kai Fong [2015] 1 HKLRD 286, CA, at §34.

34.  I will add to these the trite principle that if the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess.  Factual possession signifies an appropriate degree of physical control.  It must be a single and conclusive possession.  Tang Tak Sum at §35.

35.  In applying these principles, I have assumed that there was indeed a Wong’s portion and the Plaintiff and Wong had respective leases with the Defendant.

36.  As a matter of law, a defendant in an action for trespass cannot plead that the land belongs to some third party, not to the claimant (ie a defence that was historically known as jus tertii).  As against a defendant having no title to the land, the occupier’s possession is in itself a title. See Megarry & Wade, §7-004.  This alone would have rendered issue 1 unarguable.

37.  As a matter of fact, the Plaintiff had been solely in possession of 56D from 9 March 2015 to 20 November 2018 when she could not gain entry. This was not contradicted by the Defendant.  Even on the Defendant’s own case, neither he nor Wong were in possession in that period. The Defendant has not even asserted that he had tried to gain entry to Wong’s portion in that period at all.  The Plaintiff plainly can sue in trespass.

38.  Further, the legal principles in paragraphs 32-33 above govern the relationship between the squatters, ie the Plaintiff and Wong, but not the Defendant.  Even if those principles were applicable, there is nothing to prevent the Plaintiff, as one of the co-owners, to enforce her rights over 56D against the Defendant as trespasser.  How she would account any rent to Wong should not concern the Defendant.  Her act of recovering what the Defendant described as the whole of 56D (covering Wong’s portion) would have amounted to ouster of Wong and it added strength to the Plaintiff’s claim against the Defendant.

39.  Mr Chan submits that the Plaintiff and Wong were joint tenants.  I disagree.  The evidence of the Defendant in the LT proceedings till now, has been that the Plaintiff and Wong each had a defined portion of 56D.  The location of the Plaintiff’s portion had been the subject of a final determination in the 2014 LT proceedings on 3 February 2015 (with the reasons for decision given on 18 December 2018). 

40.  That determination came about because, on 20 November 2018, the Defendant sought leave to appeal against the reasons given on 18 December 2018 in the 2014 LT proceedings.  The Defendant claimed not to be in Hong Kong and discovered that URA was registering occupants.  The Plaintiff claimed to be the sole occupant of 56D and hence violated the tenancy rights of the Defendant (§17 of the Reasons for Decision dated 1 March 2019 in the 2014 LT judgment).

41.  In the reasons for decision dated 18 December 2018, the Lands Tribunal accepted the Plaintiff’s version, whose sketch was given to the bailiffs.  The Defendant sought leave to appeal 3 years and 10 months out of time against the 2^nd Judgment but was refused.

42.  Further, as pointed out by the Court of Appeal (on appeal from the 2013 LT proceedings), when refusing to give leave to the Defendant to appeal, a tenant could not impeach his landlord’s title: HCMP 632/2014, 2 May 2014, §6.

43.  Considering all the factors in section F, issue 1 is not triable.

G.  WHETHER THE DEFENDANT IS ENTITLED TO SET ASIDE THE LANDS TRIBUNAL JUDGMENTS FOR FRAUD ON THE BASES OF FRESH EVIDENCE DISCLOSING

G1.  Legal principles for setting aside

44.  The legal principles have been considered by the Court of Appeal in Mayer Corp Development International Ltd v Alliance Financial Intelligence Ltd [2019] HKCA 777, in the context of an appeal against an order striking-out the action.

45.  The Court of Appeal left open the question of whether setting aside of an earlier judgment for fraud applied only where the successful party was fraudulent, or should be extended to where any of the parties to the action was fraudulent (at §60).  However, in the present summons, this issue does not arise because the only successful party in the LT Proceedings is the Plaintiff against whom fraud is now alleged.

46.  The Court of Appeal also left open the question of whether it must be shown that the fresh evidence could not, with reasonable diligence, have been adduced in the earlier proceedings (at §70).

47.  The Court of Appeal, however, held that:

(1)     there must be “conscious and deliberate dishonesty” in relation to the relevant evidence given;

(2)     the fresh evidence must be “material”, in that it demonstrates that the previous relevant evidence, action, statement or concealment was an operative cause of the court’s decision to give judgment in the way it did, or that it would have entirely changed the way in which the first court approached and came to its decision; and thus the conscious and deliberate dishonesty must be causative of the impugned judgment being obtained in the terms it was; and

(3)     the question of “materiality” of the fresh evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not by reference to its impact on what decision might be made if the claim were to be retried on honest evidence.

48.  Kwan VP held that the fresh evidence must be “new” and not simply additional evidence to improve and elaborate on the existing evidence.  This requirement went hand in hand with the “materiality” requirement. If the further evidence was just “more of the same”, it might not have satisfied the “materiality” requirement.

49.  The Court of Final Appeal refused to grant leave to appeal.  However, the Appeal Committee added that the jurisdiction of the court to set aside judgments on the ground of fraud was an equitable jurisdiction.  What was of course required was cogent evidence of fraud in the first place: Bumper East Limited & anor v Mayor Corporation Development International Limited [2020] HKCFA 11, at §11.

50.  It can thus be seen that the law relating to Issue 2 has not been settled in Hong Kong.  However, in deciding whether Issue 2 is triable, I shall adopt the lowest legal threshold on the 2 questions that the Court of Appeal left open. 

G2.  The Defendant’s case

51.  Mr Chan relies on several matters which, he submits, were consistent with the Defendant’s defence:

(1)     That the written tenancy agreement between the Plaintiff and Defendant related to only half of a shop in Yue Man Square.

(2)     It was Wong who introduced the Defendant to the Plaintiff and asked her to lease her space to the Defendant as well.

(3)     Transcripts of the 2013 LT Proceedings showed that the Plaintiff’s then representative (Mr Chan Wai Ming) acknowledged that the Defendant had also rented Wong’s portion behind the Plaintiff’s.  That was before any dispute as to ownership of what the Defendant called 56D arose.

(4)     Transcripts of the hearing before Member Pang on 3 February 2015 in the 2014 LT proceedings showed that the Defendant had first rented Wong’s portion at the rear and then wanted to rent the Plaintiff’s portion as well.

(5)     The Defendant has purported to explain why the Wong TA had been altered to add the address rented and the parties’ signatures for stamp duty purposes, although that was not accepted by Member Pang.

52.  Mr Chan points out that Chan Wai Ming made reference to the sketch of the Defendant in the 2014 LT proceedings and claimed that Wong’s portion was not part of 56A, B, C or D (ie the area which is referred to as 56D in the present case).  He submits that there was conscious and deliberate dishonesty in Chan Wai Ming’s evidence.  The Plaintiff could not have been mistaken because Wong had been in occupation for over 20 years.  The Plaintiff was personally present at the hearing before Member Pang on 3 February 2015 but did not dissociate herself from or correct Chan Wai Ming’s evidence.  She had adopted the dishonest statement.

53.  With respect to Mr Chan, the Defendant’s case does not bear scrutiny for the following reasons.

54.  Firstly, applying paragraph 46, however low a threshold applies, the “fresh evidence” was not only obtainable but it was actually obtained and presented to Member Pang (§9 of the Reasons for Decision dated 1 March 2019 in the 2014 LT proceedings).

55.  Secondly, applying paragraphs 47(1) and 49, the Plaintiff could not be said to have been fraudulent when her representative actually acknowledged that Wong had interest in some parts of land and there was a Wong TA. There was dispute as to where Wong’s portion was and where the Plaintiff’s portion was.  That a party’s evidence was contrary to the case of another could not, in itself be evidence of fraud.

56.  Thirdly, applying paragraphs 47(2) and (3), the materiality requirement was not met.  It was true that Member Pang accepted and relied on the Plaintiff’s evidence for the 3 February 2015 judgment (§5 of the Reasons for Decision dated 1 March 2011). However, he was provided with some of the “fresh” evidence at the hearing on 4 February 2019.

(1)     He expressly referred to the Defendant’s difficulty in getting over the test in Ladd v Marshall [1954] 1 WLR 1489 (§§10-11 of the Reasons for Decision dated 1 March 2019).

(2)     He expressly held that even if the fresh evidence was believable, it would not have affected the outcome; the Defendant was merely repeating his arguments at the original trial.  He refused to let the Defendant adduce the new evidence.  (§12)

(3)     He maintained his finding that Wong’s portion was at the rear of 56D (§15).

(4)     Despite having that “fresh” evidence, Member Pang refused to give leave to appeal.

57.  Applying the principle in paragraph 48, the evidence now presented by the Defendant on Issue 2 was anything but “fresh”.  Wong made an affirmation. However, it was plain that Wong was aware of the LT proceedings, by mid-2018, at the latest.  He was in Hong Kong then but the Defendant did not ask him to be a witness in the 2014 LT proceedings that took place in 2018.

58.  The affirmations of the 2 contractors and 2 community members went to prove that the Defendant was a tenant of Wong, but that was not disputed by the Plaintiff.  That the 2 contractors had removed the partition in 56D and built a cockloft so that the Defendant could use the Plaintiff and Wong’s portions could not enhance the Defendant’s case.

59.  In the premises, the “fresh evidence” was simply additional but not fresh evidence.  It is now presented to repeat the Defendant’s arguments before Member Pang and to make a collateral attack on the Lands Tribunal judgments given 5 years ago.

60.  I hold that issue 2 is not triable.

H.  ISSUE 3: WHETHER THE DEFENDANT’S ACTS AMOUNTED TO TRESPASS

61.  Trespass consists of any unjustifiable intrusion by one person upon land in the possession of another.  The slightest crossing of boundary is sufficient.  See Clerk and Lindsell on Torts (22nd Edition) at §19-01.

62.  For the same reasons given in paragraphs 37-42 above, the Plaintiff was in possession of 56D at the time the writ was issued.

63.  Even if the court were to accept that the Plaintiff was entitled to occupy only the Plaintiff’s portion, the Defendant’s conduct in obstructing the only entrance and exit and replacing the door lock with a metal bar to 56D amounted to trespass.  In fact, the Defendant admitted that the Plaintiff was unable to gain access into 56D.

64.  The Defendant also removed the suspended lightings without the Plaintiff’s consent.  He refused to remove his items, despite police being called by the Plaintiff and a demand letter from the Plaintiff’s solicitors.

65.  The Defendant persisted in the trespass after the Injunction Order was obtained:

(1)     On 18 April 2019, the Defendant had, through his solicitors, claimed to have removed all the items outside 56D.  The Plaintiff had, on 23 April, with photos, contradicted the Defendant’s solicitors.

(2)     On 18 June 2019 the Defendant once again damaged the door lock and replaced it.  He wrote Chinese characters on the door to 56D with red and black paint.  The Plaintiff’s complaint by letter was met with no response from the Defendant.

(3)     The Defendant continued to put black paint and newspaper on the external wall of 56D, broke into 56D, wrote Chinese characters on the wall of 56D and put a lock on the door inside 56D.

66.  The Defendant’s acts amounted to trespass and ouster of the Plaintiff.  It is noteworthy that those acts and the application for leave to appeal 3 years out of time in the 2014 LT proceedings occurred soon after the URA started to register occupiers of Yue Man Square.  They were but the Defendant’s desperate attempts to try and get some benefits out of the URA’s recovery of Yue Man Square.  I have no hesitation in holding him liable for damages. 

67.  Mr Chan submits that the Plaintiff was initially at fault by wrongfully excluding the Defendant from Wong’s Portion since December 2014 (ie for over 5 years).  The Plaintiff would herself be liable in trespass.  She would also be liable under her cross-undertaking as to damages in support of her application for interim injunction.  The Defendant would be entitled to set off any damages payable by him to the Plaintiff.

68.  Given the analyses above, I find that there was no wrongful exclusion and there is simply no triable issue for a counterclaim.

I.  CONCLUSION

69.  I hold that no triable issues have been raised by the Defendant as to the Plaintiff’s entitlement to possession of 56D or that any of the Lands Tribunal judgments should be set aside for fraud.  The Defendant had committed trespass between 30 July 2018 and 12 August 2019.  I therefore give judgment to the Plaintiff on liability, with damages (including loss of profits) to be assessed by a Master. 

70.  On a nisi basis, costs shall be to the Plaintiff to be summarily assessed on 15 December 2020 at 4:30 pm on the papers without a hearing. The Plaintiff shall file and serve herstatement of costs by 7 December 2020.  The Defendant shall file and serve his grounds in opposition by 14 December 2020.

71.  56D did not appear to be a big property.  I query whether or not substantial damages can be recovered by the Plaintiff.  I direct the parties to show cause in writing within 21 days, copied to the other party, as to why this case should not be transferred to the District Court.

72.  I thank counsel for their assistance.