JOSEPH WONG & CO. (H.K.) LTD. v. WING SHING AIR-FLOW CO. LTD.

DCCJ 3369/2002

IN TH DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.3369 OF 2002

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J U D G M E N T

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1. This is an application for summary judgment. The disputes between the parties may be briefly summarized as follows. The Plaintiff and one Mr. Lam Chi Keung (Lam) and one Mr. Wong Chit Ming (Wong) purchased a piece of land described as Lot 4E, DD 212, Sai Kung (Lot 4E) in 1989. It was intended to be used as an access road. A Deed of Mutual Covenant (DMC) was executed to give effect to the intention of all parties.

2. It was alleged that in or about February 2002 without the consent of the Plaintiff, the Defendant entered Lot 4E and erected an unauthorized structure thereon and that the said unlawful entry and erection amounted to trespass.

3. From the Statement of Claims, it is clear that this is an action brought against the Defendant for trespass. This is not an action against Lam and Wong for breach of DMC. Both Lam and Wong have not been joined as co-plaintiffs. Neither have they been sued as co-defendants.

4. Lam stated in an affirmation filed on behalf of the Defendant that in 1989 due to business expansion, Lam and Wong purchased pieces of land in Sai Kung inter alias Lot 4D. An access road passing through Lot 4D was required by the Plaintiff. As such, a strip of land which ran immediate parallel to the Hiram's Highway was agreed by the Plaintiff and Lam and Wong to be used as the access road. In fact this strip of land had been used by the Plaintiff as access road for many years.

5. This strip of land where the access road situated on was later given a designation of Lot 4E. Thus Lot 4E was alienated from Lot 4D though the designation was not known to Lam at the time. It was further agreed by the Plaintiff on its part and Lam and Wong on theirs parts that Lot 4E would be co-owned in equal shares. After the purchase of Lot 4D in 1989, save and except the strip of land that alienated out as access road, the boundary of Lot 4D was fenced off. It was in 1990 that the Defendant was incorporated and both Lam and Wong have been directors since.

6. In essence, Lam stated that the unauthorized structure was erected on Lot 4D where it was owned by Lam and Wong. The Defendant therefore had not trespassed into the Plaintiff 's land at all. There was a mistake in both the Deed of Assignment and the Deed of Mutual Covenant in depicting the true location of Lot 4E. Both instruments fail to reflect the true intention of the parties. Lot 4E should not be where it is depicted or described to be. Rather it should be the strip of land that had been used by the Plaintiff as access road. Alternatively if one uses the current lot index as described in the March 2002 Lot Index Plan, the access road should be designated as Lot 4D rather than Lot 4E.

7. It was also submitted on behalf of the Defendant that not only the Defendant but also the Plaintiff were under the same mistake. It was therefore submitted that rectification was available when there was a common mistake. Alternatively it was submitted that where a party who knew of a unilateral mistake under which the other party was laboring, the former was estopped from resisting rectification where the he did nothing to correct it, which was in his favour.

8. Alternatively it was submitted that the Defendant was permitted to enter and erect by Lam and Wong , therefore there was no trespass. Further it was submitted that the Plaintiff was not in possession of the land and therefore had no cause of action for trespass.

9. Mr. Derry Wong also submitted on behalf on the Defendant that apart from facts, as a matter of law, the Plaintiff should not be entitled to judgment for the party issue had not been satisfactorily resolved. It was submitted that Order 15 rule 4(2) of the Rules of District Court stated that unless the Court had given leave to the contrary, all persons entitled jointly to the relief should be parties to the action. Lam and Wong were never made a party either as plaintiff or defendant.

10. The applicable principles in an Order 14 application are well-known and may be easily found in Hong Kong Civil Procedure 2002 Vol 1 Para 14/4/1 et seq., and there is not much point in my repeating them here, save to say that I have taken them into account.

11. "Order 14 is for clear cases; that is, cases in which there is no serious material factual dispute and, if a legal issue, then no more than a crisp legal question as well decided summarily as otherwise... The procedure is entirely inappropriate where the plaintiff's entitlement to recover any sum is the subject of any serious dispute, whether of law or fact." Crown House Engineering v Amec Projects Ltd (1990) 6 Const LJ 141

12. "The test at the summary stage is indeed as simple as whether the defendant's assertions are believable...whether the defendant's assertions are believable is a question to be answered not by taking those assertions in isolation but rather by taking them in context of so much of the background as is either undisputed or beyond reasonable dispute." Re Safe Rich Industries Limited Civ. App. No. 81 of 1994.

13. Having pursued affirmations filed on behalf of the Plaintiff as well as the Defendant and the exhibits annexed thereof, I am satisfied that this is a case where there are serious factual disputes such as the location of the access road where the Plaintiff had been using in the past; the true location of the intended access road; the existence of any mistake and the knowledge of such by any parties; the existence of any mistakes in any legal instruments; the history and age of the unauthorized structure etc. These are by no means exhaustive.

14. All these factual disputes cannot be resolved satisfactorily without a trial bearing in mind that the court should not at this stage conduct a mini-trial based on affirmations. I would give the Defendant on the first ground alone leave to defend. I order that the Defendant be given unconditional leave to defend. In light of the order, I refrain from going into the dispute or issues between the parties in any greater detail lest it might affect the future conduct of the case.

15. As regards costs, I make an order nisi that, save and except the costs of hearings on 10 July and 13 August 2002 be to the Defendant with certificate for counsel, the costs of this application be costs in cause, to be taxed if not agreed. Unless either party applies to vary this order nisi within 14 days after the handing down of this judgment, the same shall become an absolute order.