CHAN WING TONG v. THE INCORPORATED OWNERS OF KAM CHUNG BUILDING (JAFFE ROAD) AND OTHERS

HCA 1581/2017

[2024] HKCFI 508

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1581 OF 2017

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JUDGMENT

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Table of Contents

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A.  INTRODUCTION

1.  The Plaintiff (陳永棠) (“P”) commenced this action over 6 years ago claiming adverse possession against the Incorporated Owners of Kam Chung Building (Jaffe Road) (“IO”), now the 1^st defendant, over a part of the lot where Kam Chung Building (“Kam Chung Building”) is situated. The lot is a piece of land known as Remaining Portion of Section C of the Inland Lot 2821 (“Lot”). Kam Chung Building is bounded on its immediate southern side by a scavenging lane (“Lane”). Part of the Lane falls on the Lot, with the remaining part falls on the adjacent government land. It is P’s pleaded case that since no later than 1974, he and his family have been operating a store in the Lane called Choi Kee 財記 (“Store”) and occupying part of the Lot and part of the adjacent government land (“Occupied Area”).

2.  The relevant part of the Lot said to be occupied by the Store is stated to be about 8.26 sq m (“Relevant Part”), and coloured brown on a survey plan dated 28 June 2017 (site inspection date 13 June 2017) signed by P’s expert, Mr Chan Tak Hing of TH & Associates Limited, and attached as Enclosure 1 (“2017 Survey Plan”) to P’s re-amended statement of claim (“RASOC”)[1]. As seen on the 2017 Survey Plan, the northern boundary of the Relevant Part is part of the southern exterior wall of the Kam Chung Building. The part of the Store which falls on the government land is coloured green which is stated to be about 1.34 sq m. The dimensions of the Relevant Part are disputed by the IO.

3.  P claims against the IO, amongst other things, a declaration that P has obtained a good possessory title to the Relevant Part.

4.  It is not in dispute that the Relevant Part is not allocated any undivided share[2].

5.  About 5 years after the commencement of this action, on 10 May 2022, the majority owners of the Building (collectively “MOs”) issued an application in the Lands Tribunal under LDCS7000/22 under the Land (Compulsory Sale for Redevelopment) Ordinance, (“Cap 545”) for an order of sale of the Kam Chung Building (“LT Proceedings”). The trial was scheduled to commence on 4 December 2023 and was fixed for 6 days.

6.  In the course of the LT Proceedings, P had sought a confirmation from the MOs that they would take no issue with P’s contention that an order for sale if granted in the LT Proceedings would not affect P’s position and would not bind P. As no such confirmation had been forthcoming by the MOs, P issued an application to join the MOs as defendants in the present action.

7.  Pursuant to a decision handed down by this Court on 29 May 2023 (“Joinder Decision”), leave was granted to P to join the MOs, and to re-amend P’s then amended statement of claim, and the RASOC was subsequently filed. Leave was granted to the IO to file and serve a re-re-re-re-amended defence and counterclaim (“”RRRRADC”) and for the MOs to file their defence and counterclaim.

8.  Counsel Mr Benjamin Chain together with Mr Kevin Poon appeared for P at the trial, Mr Hatten Kong Sau-Fung and Mr Vincent Wan appeared for the IO, and Mr Edward Chan SC and Ms Verna Lui appeared for the MOs.

B.  BRIEF OVERVIEW

9.  It is P’s case that his father Chan Chee (陳志) (“Father”) started to operate a fruit stall under the name “Choi Kee” (“Fruit Stall”), with the help of P’s uncle Chan Chun Choi (陳振才) (“Uncle”), on the Occupied Area in early 1960s, and that between 1964-1965, when the then old 4 storey tenement building (“Old Tenement Building”) where Kam Chung Building is now situated was demolished for redevelopment, Father had kept the space of the Fruit Stall enclosed for storage. P’s allegations were denied by the IO.

10.  The occupation permit of the present Kam Chung Building was granted on 6 March 1967[3].

11.  It was not disputed that telephone service was connected to the Store from about 15 March 1974. There was also a Tobacco Retailer’s Licence issued to Uncle for the Store in April 1974. An application for electricity supply to the Store was also made in April 1974 which was connected. P’s case is that the new or present Choi Kee, ie the Store, was formally opened in winter 1974.

12.  P had also made an application on around 5 November 1976 for a “Fixed Pitch (Wall Stall) Licence” (“Fixed Pitch Licence”) for the Store from the Urban Council & Urban Services Department of the Urban Services District Office (“USD”). It would appear from USD’s letter dated 18 May 1977 addressed to P that in order to obtain the licence, the Store must not protrude from the building line more than 2 feet or half the width of the pavement or lane, whichever was the less, and according to USD, this condition was not being complied with and P was required to reduce the size of the Store[4].

13.  By a further letter dated 31 August 1977 addressed to P, USD had referred to P’s application for the Fixed Pitch Licence on 5 November 1976 and had pointed out as the Store was situated on private property, it was not necessary at that moment for P to apply for such a licence[5]. Subsequently on 26 March 1985, P had written a further letter to the USD to ask them to reconsider his case[6]. On 16 September 1985, a further letter was sent to USD. This time it was signed by Uncle, and had referred to an interview with the USD on 12 September 1985. In this letter, Uncle had stated that his nephew, ie P, had jointly operated the Store with him since 1965 and that Uncle informed USD that as his health had deteriorated, he was unable to stay in the Store during the whole trading period, and that he was willing to “transpose with his nephew” and permit P to be the sole legitimate applicant for the Fixed Pitch Licence for the Store[7] (“Uncle’s Letter”). Eventually, on 10 December 1985, USD sent a letter to P and confirmed that as the Store was within private land, no licence would be issued to him and that if the land occupied by the Store was returned to the government, P could re-submit his application[8].

14.  On 7 July 1986, Uncle made an application to the USD to appoint Father as a manager of the Store, for the purpose for an application for a “Frozen Confections Permit” and/or “Milk Permit” for the Store[9].

15.  On 5 October 1994, one of P’s brothers, Jacky Chan, had signed an agreement on behalf of the Store with Nestle Dairy Farm Limited for the loan of a milk cabinet, and P had produced a copy of the agreement[10]. P had also produced a “Milk Permit” issued to Uncle on 21 February 2006 by the Public Health and Municipal Services Ordinance, Cap 132[11]. The Milk Permit was eventually cancelled on 1 April 2009, due to non-renewal[12].

16.  According to P, he took over from Father the business of the Store in 1998. This was disputed by the IO.

17.  The IO was incorporated on 14 September 2005. Prior thereto, according to the IO, Kam Chung Building was managed by a company called Hong Kong Property & Management Services Limited (“Former Property Manager”), and according to the IO, although they had tried to contact the Former Property Manager for information on the Store, they were offered no assistance[13].

18.  On 5 August 2013, the IO issued a letter addressed to the Store[14], alleging trespass and enclosing among others copy of a letter dated 12 December 2011 sent to the IO from the Buildings Department[15] alleging that there were illegal structures on the ground floor and demanding the removal of such illegal structures[16] (“IO’s 1^st Letter”). No action was taken afterwards.

19.  Eventually, P issued the writ herein on 5 July 2017 against the IO for amongst other things a declaration that he has obtained a good possessory title to the Relevant Part and the title of the registered owners to the Relevant Part has been extinguished. As mentioned, the LT Proceedings were issued on 10 May 2022 by the MOs.

C.  LIST OF DISPUTED ISSUES

C.1  Lack of Parties

20.  Both the IO and the MOs have raised the issue that P should have joined all the minority owners of Kam Chung Building and that P’s claim must fail due to the minority owners not being joined.

C.2  As between P and the IO

21.  There are a total of 9 agreed disputed issues and one non-agreed disputed issues.

22.  I will group together some of the agreed disputed issues for consideration:

(1)  Issues 1 and 2 – Factual possession

(2)  Issues 3, 4 and 5 – Licence, Animus Possidendi, and Possessory Title

(3)  Issue 6 – Illegality

(4)  Issue 8 – Nuisance and trespass

(5)  Issues 7 and 9 – Reliefs

23.  The non-agreed issue, Issue 10, is on the dimensions of the Relevant Part.

C.3  As between P and MOs

24.  There are two agreed disputed issues namely:

(1)  if P succeeds in establishing a possessory title over the Relevant Part, whether the same is only an incumbrance for the purpose of Cap 545 ( Issue 11)

(2)  whether an order for sale under Cap 545 has any effect on P’s possessory title (if established) ( Issue 12).

25.  There are two non-agreed issues, namely[17]:

(1)  whether the issue between P and MOs should be stayed pending the determination in the LT Proceedings, and if and when appropriate, the result of the auction if an order for sale is granted, as well as the joinder of all necessary parties for the determination of this issue (Issue 13)

(2)  whether the Court should refuse to entertain P’s claim against the MOs or alternatively adjourn the determination of such claim sine die with liberty to restore without prejudice to P making such application to the Lands Tribunal to assert its right (Issue 14).

D.  WITNESSES

D.1  Factual witnesses

26.  Uncle had passed away on 23 January 2008 at the age of 71 years old[18], some 9 years prior to the commencement of this action.

27.  By the time of the trial, Father had passed away. Father was born in 1929, and P had produced a medical certificate dated 17 April 2018 which indicated that Father, then 89 years old, had been suffering from cerebral vascular accident and had been kept bed bound for 10 years by then, and was totally disorientated in time, place and person[19]. There was no witness statement submitted by Father.

28.  P’s mother Siu Wai Ying (蕭惠英) (“Mother”) was born in 1938 and was at the time of the trial about 85 years old. At the time of commencement of this action in 2017, she was about 79 years old. There was no witness statement submitted by her.

29.  P had submitted a total of 4 witness statements and attended trial for cross-examination.

30.  The Chairman of the IO, Ms Fok Fung Yin (“Ms Fok”) had submitted 3 witness statements. Mr Lau Ping Tat, the manager of Winland Estate Management Limited (“Mr Lau”), the current property manager of Kam Chung Building, submitted a witness statement on behalf of the IO. Mr Wong Hin Sun, an officer of the MOs (“Mr Wong”) submitted a witness statement on their behalf [20]. They all attended trial to be cross-examined.

D.2  Expert witnesses

D.2.1.  On Land Boundary

31.  Leave was granted to P on 19 December 2017 to adduce a survey expert report on the Land Boundary in respect of P’s encroachment on the Lot[21] (“Land Boundary”). Pursuant thereto, a Land Boundary Survey Report dated 28 June 2017 prepared by P’s expert, Mr Chan Tak Hing of TH & Associates Limited who had prepared the 2017 Survey Plan, was filed on 23 January 2018 (“2017 Survey Report”)[22]. However, in P’s List of Documents filed on 30 January 2018, P disclosed an earlier survey report dated 1 September 2008, prepared by a Mr Chan Hin Yee, also of TH & Associates Limited, and endorsed by Mr Chan Tak Hing (“2008 Survey Report”). A copy of this was formally produced by Mr Chan Tak Hing when he attended trial for cross-examination[23].

32.  There was no expert evidence from the IO on Land Boundary.

D.2.2.  On Building Matters and on Risk of Fire Hazards

33.  On 9 January 2020, Master Ho granted leave to P and the IO to adduce respective expert evidence on the liability issues relating to building matters (“Building Matters”) and also risk of fire hazards (“Fire Risk”).

34.  On Building Matters, the expert evidence is on:

(1)  whether the Lane forms part of the fire escape route (“Fire Escape Route”) of Kam Chung Building and/or David House and YF Life Tower (formerly Mass Mutual Tower) (“Adjoining Buildings”);

(2)  if answer to (1) is positive, the condition and availability of the Lane as a means of escape from fire, and the appropriate measures which would improve the said condition and availability (if any); and

(3)  whether the Store and/or the building works and structures thereof constitute unauthorized building work(s) and/or structure(s) (“UBWs”)

35.  P’s expert on Building Matters is Mr Siu Koon Hoi Carmine (“Mr Siu”). IO’s expert is Mr Lam Siu Tong (“Mr Lam”). Apart from their respective solo reports, they submitted a joint expert report on 13 July 2020 (“Joint Building Report”)[24] and a supplemental joint expert report dated 21 June 2021 (“Supplemental Joint Building Report”)[25]. They had both attended trial to give oral evidence.

36.  On Fire Risk, leave was granted to P and the IO to adduce expert evidence on the following liability issues:

(1)  how and to what extent the Store and/or building works and structures and various items contained in the Lane may have impact on the risk of fire hazards to Kam Chung Building and/or Adjoining Buildings, fire loading, evacuation time (assuming it to be a means of escape) in case of fire, and the Lane as a whole being a means of escape for Kam Chung Building and/or Adjoining Buildings leading to the ultimate place of safety; and

(2)  appropriate measure which would reduce the risks of fire hazards to Kam Chung Building and/or the Adjoining Buildings, fire loading, evacuation time (assuming the Lane to be a means of escape) for the users of Kam Chung Building and/or the Adjoining Buildings in case of fire, and improve the Lane as a whole being a means of escape for Kam Chung Building and/or Adjoining Buildings leading to the ultimate place of safety.

37.  P’s fire expert is Mr Tsui Hon Wong, Terry (“Mr Tsui”) and IO’s expert is Ms Choi Yuk Kuen Annie (“Ms Choi”). They each submitted a solo report and they submitted a joint report on 15 June 2020 (“Joint Fire Report”)[26]. They had both attended the trial to give oral evidence.

E.  LACK OF PARTIES

38.  An issue raised by the IO, and also the MOs, is whether P should have joined each and every owner, namely all the minority owners of Kam Chung Building, and not only the MOs, in this action. Mr Wong had on behalf of the MOs set out that they own 117 shares out of 135 undivided shares of and in the Lot, 97 of those shares being acquired on 4 March 2005 and the rest 20 shares acquired on 20 March 2018. Mr Wong also set out the 3 minority owners (respondents in the LT Proceedings) and their shares totalling 18 shares.

39.  It is not disputed that P commenced this action pursuant to section 16 of the Building Management Ordinance (“Cap 344”) which states that:

“16. Rights etc. of owners to be exercised etc. by corporation

When the owners of a building have been incorporated under section 8, the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by, and the liabilities of the owners in relation to the common parts of the building shall, subject to the provisions of this Ordinance, be enforceable against, the corporation to the exclusion of the owners, and accordingly—

(a) any notice, order or other document which relates to any of the common parts of the building may be served upon the corporation at its registered office; and

(b) any proceedings in the tribunal in respect of any of the common parts of the building may be brought and pursued by or against the corporation.”

40.  It was submitted by Mr Kong on behalf of IO that as P brought this action as a squatter prior to 12 years/20 years before the IO was incorporated, P ought to have joined each and every owner of the units in Kam Chung Building in this action.

41.  Mr Kong referred this Court to the Court of Appeal decision in One Beacon Hill v Match Power Investment Ltd [2012] 5 HKLRD 375, CACV 226/2011. In this case, amongst other things, disputes arose as to whether the defendant as developer had acted in breach of the consent scheme contracts regarding the construction of the common parts of the development. Instead of the affected co-owners suing the defendant for breach of contract, the plaintiff as the Incorporated Owners sued the defendant developer , who then applied to strike out the action on the ground that the Incorporated Owners lacked the necessary locus to sue. The judge refused to strike out the action, and the defendant appealed.

42.  On appeal, the arguments focused on section 16 and section 18(2)(g) of Cap 344. Essentially, it was held by the Court of Appeal that:

(1)  Section 16 of Cap 344 applies only to vest the right of suit regarding the common parts of a building in the Incorporated Owners for causes of action that accrued to all the co-owners (paragraph 21);

(2)  There is no justification for imposing a liability on the Incorporated Owners that was, prior to incorporation, the responsibility of only one or some individual owners, because other co-owners in a minority would be, in effect, forced to fund the litigation and run the risk of losing it via the Incorporated Owners ( paragraphs 28-33);

(3)  The Incorporated Owners’ exposure under section 16 is limited to the pre-incorporation liabilities of the owners collectively, as distinct from one or some of the co-owners and, this must be equally true in respect of the Incorporated Owners’ assumption of the right of suit under section 16 (see paragraphs 39-50); and

(4)  The argument that section 16 was satisfied so long as the right or liability involved was something in which the owners had a “common interest” is accepted only insofar as “common interest” was limited to a legal right or liability common to all co-owners in relation to the common parts (paragraphs 52-54).

43.  Mr Kong also referred this Court to The Incorporated Owners of Chungking Mansions v Shamdasani [1991] 2 HKC 342 where it was stated at 352D-355E, where it was stated by the late Jerome Chan J, that one essential feature of a tenancy in common is that apart from the unity of possession, the interest of each is separate and distinct and each co-tenant could deal with his own share as he saw fit. Therefore, if a co-owner grants a licence to a stranger for the occupation of a common part of a building, no right of action could accrue to him in respect of such occupation by the stranger. It follows that the time for commencement of the squatter’s adverse possession and the incidence of his adverse possession would not necessarily be the same as against all tenants-in-common and his possession can be adverse to some but not all of the tenants-in-common. In the premises, the Judge having considered section 16 of the Multi-storey Buildings (Owners Incorporation) Ordinance (the predecessor of Cap 344), held that a squatter must establish adverse possession against each and every holder of the other undivided shares in the land and the building for the period prior to the incorporation of the Incorporated Owners.

44.  On the other hand, Mr Chain relied on Hang Yick Properties Management Ltd v Incorporated Owners of Tuen Mun Kar Wah Building [2005] HKLRD 499, [2005] HKCA 194, CACV 355/2004.

45.  In this case, the plaintiff’s summons was for summary judgment under Order 14 of the Rules of District Court (RDC) against the defendant Incorporated Owners in respect of its claim for re-imbursement of the management expenses paid by it on behalf of the owners of Tuen Mun Kar Wah Building prior to the incorporation of the defendant, whereas the defendant’s summons was pursuant to Order 33 of the RDC for determination of a preliminary issue to the effect as to whether the claim was a liability enforceable against the defendant under s 16 of Cap 344. The judge held that the defendant was not liable to the plaintiff’s claim insofar as the expenses were incurred prior to the incorporation and that the defendant was only liable for such of those expenses as were incurred after the incorporation.

46.  Woo VP stated in his judgment, at paragraphs 18-21:

“18. It is plain that a major purpose of the incorporation of owners of flats in buildings at which the Ordinance expressly aims to facilitate is to provide convenience in suit and to avoid the problems that might arise from the multiplicity of parties and suits involving such owners which may be numerous. S 16 is specifically designed for such purpose, so that after incorporation under the Ordinance, the rights, powers and privileges of the owners in relation to the common parts of the building shall be exercised and the duties of the owners in relation thereto shall be performed by the corporation to the exclusion of the owners, and that the liabilities of the owners in relation thereto shall be enforceable against the corporation to the exclusion of the owners. The corporation is intended to be the sole representative of all the owners regarding matters within the ambit of s 16.

19. The owners are no longer liable to be sued for their liabilities in relation to the common parts; only the corporation is so liable. As the owners are not liable to be sued under s 16, their liabilities in relation to the common parts, as enveloped in s 16, have been eliminated save where the court grants leave pursuant to s 17 of the Ordinance for any judgment against the corporation to be enforced against any individual one of them.

20. But are the liabilities of the owners in relation to the common parts limited to those incurred by them after incorporation or do they include those incurred before incorporation? The contentions of the parties before us are diametrically opposed. I consider that the answer depends on the facts of each particular case. Sometimes, the liability of an individual owner in relation to the common parts is personal, and thus such liability should not be covered by s 16, or else the other owners would be unfairly prejudiced by the corporation being sued and if the suit is successful, for the judgment being enforced against them or each of them pursuant to s 17. This kind of personal liability, depending on the facts of each case, can be tortious or contractual in nature, it matters not. But where the liability is that owed by the owners as a whole, then the liability of suit passes onto the incorporated owners. This is clear from the words “owners” in the plural used in s 16, as opposed to the singular.

21. There is no question that s 16 covers the liabilities of the owners as a whole in relation to the common parts after incorporation: see Grenville House and the observation of Litton NPJ in Chi Kit at p 277B-C. The parties do not argue against this proposition.”

47.  As pointed out by Mr Chain, prior to incorporation, the rights to the common parts may be separate in that e.g. if one of the owners grants, or purports to grant a licence to a stranger, that licence would only be binding on the grantor but not against all owners , although all other owners except the licensor can take steps to evict him.

48.  Anyway, as set out later, P’s case as that Father’s/Uncle’s/P’s occupation and possession of the Relevant Part are adverse to all owners, and that there was no licence granted by any of the owners. It is also P’s case that on the expiration of 20 years from no later than 1974, all the owners’ titles to the Relevant Part were extinguished. IO was incorporated in 2005, but by the time this action was commenced in 2017, if P’s case is proved, then as pointed out on behalf of P, there was nothing for the IO to “inherit” when it was incorporated in 2005. It was submitted on behalf of P that under section 16 of Cap 344, IO was in law the only proper defendant when P commenced this action.

49.  In light of P’s claim for adverse possession is against all the owners, I am of the view the proper defendant under section 16 is the IO. I am not satisfied that it is necessary for P to join all the individual owners of Kam Chung Building in this action. The issue of lack of parties was never raised by the IO as between them and P, and was only raised by the IO and the MOs at the time when P applied to join the MOs.

50.  As set out in the Joinder Decision[27], P’s application to join the MOs arose mainly because of MOs’ failure to provide a confirmation sought from them by P that in the event that P were to succeed in this action, an order for sale in the LT Proceedings would not affect P’s position, and that during a call over hearing in the LT Proceedings, when one of the minority owners applied for a stay of the LT Proceedings pending the determination of this action, MOs’ submission in those proceedings was that even if P were to succeed with his claim in this action, it would be at most an incumbrance. This was the Legal Issue to be determined and it was for determination of the Legal Issue that MOs have been joined. The Legal Issue was raised as a result of MOs’ stance, and not by the minority owners. I do not see why the minority owners need to be joined by P.

F.  FACTUAL POSSESSION - ISSUES 1, 2

51.  Issues 1 and 2 are as follows:

(1)  Issue 1 – Is/was P and his predecessors in exclusive factual possession of the Relevant Part?

(2)  Issue 2 – Whether P and his predecessors had had continuous and uninterrupted factual possession and occupation of the Relevant Part for a period of not less than 12 or 20 years before commencement of the proceedings here

52.  The above issues will be considered together.

F.1  P’s and IO’s respective case

53.  It is P’s pleaded case that he and his family have been operating a stall in the name of Choi Kee Store on the Lane since no later than 1974. This is denied by the IO and they put P to strict proof of his allegations. It is further averred by the IO amongst other things that P and his family members were not known to the IO prior to the commencement of this action[28].

F.2  P’s evidence

54.  P was born in December 1956 and was 66 years old at the time of the trial. He is now the sole proprietor of the Store and his evidence was that the Store and/or the former Fruit Stall, was established by Father and that Uncle was said to have helped Father and worked at the former Fruit Stall in the early days. Father and Mother had 5 sons, of which P was the eldest and the 2^nd son had already passed away. As mentioned earlier, Uncle had passed away on 23 January 2008 at the age of about 71 years[29].

55.  According to P, at the time of his birth, his parents were living in a wooden hut in Chun Fai Terrace in Tai Hang (大坑春暉台) and that in early 1960s, in order to earn a living, and to accommodate P’s parents and their 5 sons and Uncle, Father and Uncle came to the Lane, and built a small wooden hut (木屋) (“Wooden Hut”) on the Lane at the back entrance to the then no 50, Jaffe Road and no 29, Lockhart Road, or about half way down the Lane from the Fenwick Street entrance, ie the area coloured pink on Plan 1 (“Plan 1”) attached to P’s witness statement[30]. P’s written evidence was that Father started to operate a drinks stall (茶水檔) on the Lane adjacent to the Wooden Hut, ie the area coloured orange on Plan 1 (“Drinks Stall”)[31]. As seen on Plan 1, in those days, the Lane was a dead end at one end, with the other end opening onto Fenwick Street. Father had at that time also arranged for Uncle to set up the Fruit Stall on the Lane selling fruits (生果檔) near the Fenwick Street end of the Lane, ie the area described by P as coloured light green (or yellow) on Plan 1. According to P, Father was paying a monthly wage to Uncle for helping Father to run the Fruit Stall.

56.  During the trial, P said in the 1960s, the Drinks Stall had no name, but the Fruit Stall was called “Choi Kee” as Uncle’s name was Chan Chun Choi 陳振才. Anyway, P maintained that Father was the actual owner of the Fruit Stall and that Father had occupied 3 areas along the Lane, namely (i) the Wooden Hut (ii) the Drinks Stall, and (iii) the Fruit Stall. According to P, the Fruit Stall was where the Store is now situated.

57.  It was also P’s written evidence that Father had used some wooden planks and iron sheets to enclose the table in the Fruit Stall and the stock and tools therein, and also to store some stock and tools from the Drinks Stall, and that every evening, at close of business, Father would lock up the Fruit Stall.

58.  During the trial, under cross examination as to where the Drinks Stall was, P had first said the Drinks Stall was right next to the Wooden Hut, and later he said it was within the Wooden Hut, which had a cockloft, according to a diagram he drew during the trial[32]. When it was pointed out that Father could store his goods and tools of the Drinks Stall within the Wooden Hut and there was no need for Father to place them in the Fruit Stall, P said it was Father’s or the adults’ decision. He also admitted that he was not sure as to how exactly the Fruit Stall was enclosed.

59.  According to P’s written evidence, in about 1964/1965, the Old Tenement Building was demolished and the area became a construction site and there was a lot of dust, and Father then decided to ask Uncle to cease operating the Fruit Stall, but P said the area occupied by the Fruit Stall continued to remain enclosed and was used by Father as a storage of the items from the Drinks Stall. Uncle then started to work as a part time taxi driver and a “pak pai” (白牌) driver, mainly driving customers from nearby bars, and he moved out of the Wooden Hut, whilst Father continued to operate the Drinks Stall. During the trial, P maintained that Father had kept the space of the Fruit Stall enclosed for storage of items from the Drinks Stall.

60.  The permit to occupy a new building in respect of Kam Chung Building was issued on 6 March 1967[33].

61.  It was not disputed that not long after the Old Tenement Building was demolished, the site where David House now is, on the other of the Lane was also being developed and the occupation permit of David House was issued on 1 September 1970[34].

62.  According to P’s written evidence, upon the completion of Kam Chung Building and after the surrounding planks were removed, Father immediately installed a canopy on the exterior wall of the Kam Chung Building over the area of the former Fruit Stall, ie area coloured brown and green on the 2017 Survey Plan, and Father installed wooden shelves against the exterior wall and tracks on the ground for the wooden planks to be inserted in order to enclose the area for storage of items from the Drinks Stall, and Father had also added a lock to the wooden planks. At the same time, Father had continued operating the Drinks Stall.

63.  During the trial, P’s evidence was that after the wooden planks surrounding the newly completed Kam Chung Building were removed, Father had constructed a hut, namely “屋” for storage of items from the Drinks Stall, over the area coloured blue and yellow on Plan 2 attached to P’s 1^st witness statement. According to P, Father had worked as a construction worker, and that Father was building the “hut” whenever he had time even though Father was still running the Drinks Stall, and that Uncle was busy and did not help. When asked why Father wanted to build a “hut”, P had said that Father wanted to “霸地方”, ie to adversely possess the area.

64.  P’s written evidence was also that due to frequent police visits to the Lane to drive away illegal hawkers, Father decided to ask Uncle to help to apply for business registration of the business under the name of “Choi Kee”, ie 財記. Although the business registration certificate was issued to Uncle as sole proprietor, P maintained that the business and ownership of the Store was all along Father’s solely.

65.  P had produced various business registration certificates of “Choi Kee”. He had produced a certified extract from the Business Register dated 09/03/2017[35] (“Certified BR Extract”). The Certified BR Extract indicated that Uncle was named as the applicant with his residential address stated to be “no 3, Funwick Street, side door, Hong Kong”, and the name of the business was stated to be “Choi Kee” with a principal place of business at “7, Funwick Street, G/F, side door, Hong Kong”, and description and nature of the business being described as a “store”, with a date of commencement of 1 October 1966.

66.  The business address was updated to “17, Fenwick Street Side Door Wanchai” on 20 March 1993. Under “Business Particulars”, the business status stated as at 17 October 2000 was “partnership” but it was changed to “individual” on 31 October 2000. Under “Owner Records”, the “Incoming Date” for Uncle was stated to be 1 October 1966, and the “Outgoing Date” was stated to be 27 October 2000, and the ‘Incoming Date” for P was stated to be 11 October 2000.

67.  To summarise, the Certified BR Extract showed that Uncle was the sole owner/proprietor of Choi Kee with a business address at 7, Funwick Street, G/F, side door, Hong Kong from 1 October 1966 with P joining as a partner on 11 October 2000, and that from 27 October 2000, P became the sole owner/proprietor.

68.  P had also produced copies of the business registration certificates (“BR Certificates”)[36] for (i) 12 months from October 1974, (ii) 12 months from October 1975, (ii) 12 months until 30/09/97, (iv) 12 months until 30/09/99. Although on the BR Certificates, the address of Choi Kee was initially stated to be at no 7, Funwick Street, G/F, Side Door and later 17, Fenwick Street, Side Door, Wanchai, P had explained in his 1^st witness statement that according to his knowledge, no 3-7 Funwick Street were the old numbers of Kam Chung Building, which were later changed to no 17- 21 Fenwick Street. It was P’s written evidence that these different addresses referred to the same site of the Kam Chung Building[37]. This was not disputed by the IO[38].

69.  In any event, what can be seen was that on the occupation permit of the Kam Chung Building issued on 6 March 1967, the address of Kam Chung Building was written to be at 3-7, Fenwick Street, & 52-54, Jaffe Road[39], ie at the corner of Fenwick Street and Jaffe Road, which was also the address of Kam Chung Building stated on the building plans submitted to the Building Authority for the construction of the new building[40]. However, on the Deed of Mutual Covenant dated 28 August 1967[41], the address of the Kam Chung Building was stated to be Nos 17, 19 and 21 Fenwick Street and Nos 52, 54, 56 and 58 Jaffe Road[42]. It is thus clear that prior to the Old Tenement Building was demolished, the site it occupied was numbered 3-7 Fenwick Street & 52-54 Jaffe Road and after completion of the Kam Chung Building, the site was re-numbered 17-21 Fenwick Street & 52-58 Jaffe Road.

70.  P’s written evidence was that when he was about 10 years old, which was in about 1967, he started to help Father in the Store. Thus, in 1960s/early 1970s, he was still at young age and during the trial, he admitted that it was only when he commenced this action, he had asked Mother why the Store was called “Choi Kee”, and that Mother told him this was because it was Uncle who made the application for the business registration, and that as Father and Uncle were brothers, it did not matter in whose name the application was made. According to P, he had also asked Mother to look for relevant supporting documents, and it was Mother who found those various supporting documents disclosed by him in the course of this action.

71.  According to P, in the 1970s, Father had the assistance of a man by the name of 蔡克勤, who was the boss of a night club on the ground floor of the Kam Chung Building called “Club Donhill” (“Club Donhill”), and that 蔡克勤 had instructed an employee of Club Donhill, a Mr Lam, to write a letter dated 19 April 1974 to the Hong Kong Electric Company Limited (“HK Electric”) to support Father’s application for electricity supply and to give the consent of Club Donhill for the Store to install an independent electricity meter[43] (“Club Donhill Letter”). An electricity meter for the Store was later installed at the main switch room of Kam Chung Building[44]. It appears from a floor plan attached to the Deed of Mutual Covenant of the Kam Chung Building that the main switch room/meter room is next to the transformer room on the ground floor[45]. Further the electrical fuse (熔斷器) in the Main Switch Room was said to be for use of not only the Store but all the other shops in the building[46].

72.  According to P’s written evidence, 蔡克勤 was willing to help Father as they were old acquaintances, and that in the 1960s, when Father was operating the Drinks Stall, he was also working as a “pak pai” driver for customers and waitresses of the nightclubs of 蔡克勤, who apart from the nightclub at the Kam Chung Building, also owned a number of bars near to Fenwick Street.

73.  During the trial, P said he himself had also met 蔡克勤, and that Club Donhill moved to the Kam Chung Building after it was completed and that it was operating on the 1^st floor of Kam Chung Building.

74.  According to P, upon learning that 蔡克勤 was willing to help in the installation of an electricity meter, Father applied to the Hong Kong Telephone Company Limited for installation of a fixed line telephone. P had produced copy of an invoice from the Hong Kong Telephone Company Limited for the installation fees and rental for the first year of telephone service dated 15 March 1974[47].

75.  Among the documents produced by P during discovery was what appeared to be an original application form dated 8 April 1974 signed by Uncle for a beer licence (“Original Application Form”). It was stated in the Original Application Form that attached thereto was a photograph of the site of the Store at Side Door, no 17, Fenwick Street (ie formerly no 7) and a written certificate of permission of the principal tenant (弍房東許可證明書) (“Tenant’s Certificate”) and there was also a declaration by Uncle that the Store had never been in breach of any provisions of the Dutiable Commodities Ordinance, Cap 109 (“Declaration”)[48].

76.  According to P’s re-re-re-re-re-amended reply & defence (“Reply”) to the IO’s RRRRADC, the Original Application Form was never submitted by Father/Uncle and was retained by Father and that it was only discovered by P during the course of this action, and that no document which resembled the Tenant’s Certificate was found, and further the Store had not obtained any licence for selling beer[49].

77.  During the trial, under cross examination, P admitted that the Declaration appeared to be a supporting document for the application for the beer licence, and that by having signed the Declaration and the Original Application Form, Uncle had confirmed the correctness/truthfulness of the contents. P appeared to accept that the Tenant’s Certificate once existed, but he did not know what it was and he did not know the identity of the principal tenant and was not sure why there was a principal tenant.

78.  Anyway, whether Uncle did submit the Original Application Form for a licence to sell beer or not, it appeared that he did apply for a tobacco retailer’s licence (“Tobacco Licence”) under the Dutiable Commodities Ordinance, (“Cap 109”) which was issued to him on 17 April 1974 with validity from 31 March 1974[50].

79.  During this time, according to P’s written evidence, Father and Mother further renovated the Store, by replacing the previous enclosing wooden planks and iron sheets with a wooden frame/shelf, a canopy, light bulbs, a metal storage cabinet with a lock and a wooden sliding door with a lock[51]. Further, according to P, the family also kept a large dog to guard the Store.

80.  It was P’s written evidence that the renovated Store, or the new Choi Kee, was formally opened in winter of 1974, and P and Mother were all assisting Father in operating the business, and that Uncle was by then a full time driver, and that he did not return to work at the Store. P’s written evidence was that at that time the family had continued to live in the Wooden Hut, even though they had been assigned a public housing unit in Wang Chuk Hang in 1975. In 1977, Mother bought a unit in David House, and she and their 5 sons moved to the new unit, while Father remained living in the Wooden Hut.

81.  It was also P’s written evidence that in 1980, a metal concertina gate with a metal rail were installed to replace the wooden sliding door, and later in about 1984, the old buildings (later redeveloped into the Town Place (中央廣場), Asia Orient Tower (匯漢大廈) and Fook Lee Commercial Centre (福利商業中心), collectively called Mass Mutual Asia Tower and later renamed the YF Life Tower, 33 Lockhart Road) were gradually demolished and those lots were left vacant for several years, and that at that time, P was working as a driver in addition to helping Father to open the Store in the mornings, and that in the evenings, he was working part-time as a valet parking cars for various establishments/restaurants in Wanchai area. As the Wooden Hut was demolished during the redevelopment of the site, Father had to sleep on a wooden plank inside the Store.

82.  The occupation permit of YF Life Tower was issued on 17 June 1993.

83.  According to P, in 1997, Kam Chung Building underwent major renovation, and the canopy of the Store was damaged and that he had complained to the person in charge of the renovation works, a Mr Yau, who later built a new roof for the Store. Further, P said he took over the operations of the Store from Father in 1998, but all along the Store continued to obtain the BR Certificates under Uncle’s name and that it was only after P discussed with Uncle in October 2000 that Uncle added P’s name to the business but 10 days later, Uncle then withdrew from the business, leaving P being the sole proprietor.

84.  P’s written evidence was that thereafter he continued to operate the business of the Store. It was his written evidence that Father/Uncle/he had never asked for any one’s permission/consent for occupying the Relevant Part, and also no one including any owners or the IO, after its incorporation on 14 September 2005, had ever voiced any objection, until IO’s 1^st Letter.

F.3  Chronology of relevant events

85.  The chronology of events as gleaned by this Court from various contemporary or public documents (“Chronology”) is as follows:

Date	Event
01.04.63	Lee Hing Investment Company Limited (“Lee Hing”) acquired the Lot and became the developer of Kam Chung Building (see Land Registry Search Records, E:1-245)
In 1963 (dates illegible)	The proposed building plans for Kam Chung Building were submitted (C:151-161). As seen on the plans, there were 5 shops, respectively Shops A, B, C, D, and E and the Entrance Hall on the Ground Floor of Kam Chung Building, with 1st to 16th floors, a Penthouse, roof and Upper Roof (total 18 storeys).
01.10.66	Date of commencement of business of “Choi Kee”, at “7, Funwick Street, G/F, Side Door” as stated in Uncle’s application for business registration dated 12.10.66 (see the Certified BR Extract at C:129)
06.03.67	Occupation permit of Kam Chung Building was issued (C:137): 5 shops & 1 transformer room on G/F for non domestic use; 1/F: light refreshment restaurant for non-domestic use; 2/F to 16/F (inclusive): 1 office per floor for non-domestic use; roof: 1 office for non-domestic use
26.08.67	The Entrance Hall on G/F + the entire 1/F, Kam Chung Building sold by Lee Hing to Golden Bell Enterprises Limited (“Golden Bell”) (Land Registry Record at E:50, E:61)
01.09.70	Occupation Permit issued to David House (C:138)
17.07.71	The Entrance Hall on G/F + the entire 1/F, Kam Chung Building sold by Golden Bell to a Tsai Kut Kan (E:51, E:62)
15.03.74	Invoice for installation fees and rental for 1st year of telephone service issued by Hong Kong Telephone Company Limited to Choi Kee Store, Side door, 3-7 Fenwick Street (C:1-2)
08.04.74	Uncle’s signed Original Application Form and signed Declaration for a licence for the Store to sell beer as a retailer (C:18-20)
17.04.74	Uncle’s Tobacco Licence for the Store “TR/AP/625” issued with effect from 31.03.74 (C:21-22)
19.04.74	Club Donhill Letter (with chop and printed address of Club Donhill at 3-7 Fenwick Street) addressed to HK Electric giving consent to the Store to install an electricity meter (C:27)
17.05.74	Receipt of deposit paid by the Store to HK Electric for electricity supply (D:33)
From October 1974-September 1999	BR Certificates for Oct 1974, Oct 1975, September 1997, September 1999 (C:123-128)
06.11.75	Owner of Shop A entered into tenancy agreement for 5 years from 01.12.75 with “Winner Bar” (“Winner Bar”) (see Land Registry Record at E:4)
05.11.76	P’s 1st application to USD for a Fixed Pitch Licence (see D:3, D:4)
15.11.76	Occupation Permit of East Town Building issued (C:139) Previously before redevelopment, the site was that of East Town Theatre and East Town Arcade (see Survey Sheets in March 1974 and July 1976, at C:148, C:147)
28.03.77	Mother bought Flat B, 4 floor, David House (C:111)
18.05.77	USD replied to P’s application for the Fixed Pitch Licence requiring P to reduce the width of the Store (D:1-2)
31.08.77	USD replied to P informing P that as the area occupied by the Store was on private land, it was not necessary for P to apply for a Fixed Pitch Licence and that in the event that the occupied area should revert to government, P should renew his application. (D:3)
26.03.85	P re-applied for the Fixed Pitch Licence (D:4)
16.09.85	Uncle’s letter to USD to support P’s application for the Fixed Pitch Licence (D:5)
10.12.85	USD’s reply reiterating that as the Store was within private land, no licence would be issued (D:6-15)
22.07.86	USD’s letter accepting Uncle’s appointment of Father to be the manager of the Store for the purpose of the “Frozen Confections Permit, Milk Permit” for the Store ( D:16)
From 31.03.77 to 31.03.89	Various demand notes from Customs and Excise Department to Uncle/Store demanding annual payment of licence fees for the Tobacco Retailer’s Licence (C:3-17)
After June 1983-1989	The old buildings where YF Life Tower is now situated were demolished and became a vacant site /car port (cf Survey Sheet prepared in June 1983, C:145, and Survey Sheet prepared April 1989, C:144)
30.05.89	The YF Life Tower site remained vacant (see Survey Sheet, C:143)
17.06.93	Occupation Permit issued to the new building at 44-50 Jaffe Road & 23-35 Lockhart Road (C:140), where YF Life Tower is now situated The Lane became “L-shaped”, with one end of the “L” opening onto Fenwick Street as before, the other end opening onto Jaffe Road (see Survey Sheet March 1995, C:142)
05.10.94	Agreement between Nestle Dairy Farm Limited and Choi Kee Store (signed by Jacky Chan (said to be P’s brother) for loan of milk cabinet (C:29-33)
17.10.00	The business of the Store changed from individual, ie Uncle to partnership with P joining on 17.10.00 (C:131)
31.10.00	Uncle left the business and P became sole proprietor of the business of the Store (C:131)
16.09.02	The Entrance Hall G/F + The entire 1/F Kam Chung Building sold by Tsai Kut Kan to a Ko Wai Ying (E:51,E:62)
30.04.04	The Entrance Hall G/F + The entire 1/F Kam Chung Building sold by Ko Wai Ying to Perfect Sun Trading Limited (“Perfect Sun”) (E:51, E:62)
14.09.05	The IO was incorporated (see Certificate of Registration, C:109)
21.02.06	Milk Permit issued to Uncle from 01.04.06 to 31.03.07 (C:34) Frozen Confections Permit issued to Uncle from 01.04.06 to 31.03.07 (C:35)
23.01.08	Uncle passed away (C:54)
01.04.09	Cancellation of the Milk Permit (D:23)
23.04.09	Non renewal of the Frozen Confections Permit (D:22)
05.08.13	IO’s 1st Letter alleging trespass (D:24-26)

F.4  Analysis of the evidence and findings

86.  During the trial, P’s evidence as to the location of the Drinks Stall was rather confusing and he was not sure how the Fruit Stall was enclosed. Further, there was no mention in P’s witness statement of Father constructing a “hut” after the completion Kam Chung Building with the intention of adversely possessing the area of the former Fruit Stall and P only mentioned a canopy, not a “hut”.

87.  Although there were inconsistences in P’s oral evidence with his written evidence as pointed out by Mr Kong[52], in my view, such inconsistences would not affect the overall reliability of P’s evidence and recollection of the events and the location of the Store since the 1960s. As P himself had admitted, he was still young in the early 1960s, and that his evidence about the early 1960s was mainly from his memory and what he had heard from Father and Mother, and that Father had said he was the boss of the Fruit Stall and that he learnt from conversations Father had with his mother that Father was paying a salary to Uncle for running the Fruit Stall. Although most of the P’s evidence of what he had heard from his parents would be hearsay, and his memory may have become vague over the years, I do not find it probable that he could have made up all those details in particular about the location of the Fruit Stall/the Store and the occupation thereof. Further, he himself has worked in the Store since about mid 1960s. As seen in Uncle’s Letter, even though P was only about 8 or 9 years old in 1965, Uncle seemed to have regarded P as having jointly operated the Store with him.

88.  The Certified BR Extract showed that the business and/or Store (formerly the Fruit Stall) was in existence on the Relevant Part from about 1 October 1966.

89.  It was submitted by Mr Kong that P’s expert on Building Matters Mr Siu had admitted there should have been site inspection by the Building Authority at the time of or prior to the issue of the occupation permits to the Kam Chung Building and David House, and it was submitted that it was more probable that the Store did not exist at the time of the respective site inspection.

90.  It was however admitted by P that the business of the Fruit Stall ceased during the redevelopment of the Old Tenement Building although he was not sure as to when exactly the Fruit Stall ceased its business, and as said earlier, he maintained that the space was enclosed for storage. David House was also being constructed during the late 1960s and was only completed on 1 September 1970. During those years of the construction of Kam Chung Building followed closely by the construction of David House, it did not seem probable that the Fruit Stall could have continued its business of selling fruits. Having said this, there was no sufficient evidence that Father/Uncle had abandoned the area formerly occupied by the Fruit Stall. There was also no sufficient evidence to contradict P’s evidence that the space formerly occupied by the Fruit Stall was boarded up and enclosed and used by Father for storage upon cessation of business of the Fruit Stall.

91.  In any event, there was no sufficient evidence that the existence of any boarded up and enclosed storage area of where the former Fruit Stall stood on the Relevant Part in the Lane would have an effect on the issue of the occupation permits for the Kam Chung Building and/or David House upon inspection by officers of the Building Authority.

92.  Whether Father had boarded up and used the former Fruit Stall as a storage space or not, I find that the documentary evidence set out in the Chronology showed that at least by about early 1974, the site of the former Fruit Stall/the Store was occupied by Father and/or Uncle as by 15 March 1974 the telephone line to the Store was connected.

93.  Further, whether the business of the Store was owned by Father or by Uncle, I find Father (and his family and/or P) and Uncle did have a very close relationship. This can also be seen in Uncle’s Letter to the USD and also the change of Uncle’s name as sole owner of the business of the Store to that of P’s. P is clearly the designated successor of the business whether the Fruit Stall (Store) was originally owned by Father or Uncle.

94.  There was no sufficient evidence to contradict P’s evidence that in early 1974, Father had installed a storage cabinet, wooden planks, and also wooden sliding panels on tracks to enclose the Store, which were later replaced by a metal concertina gate in 1980s. It was P’s evidence that the storage cabinet and the wooden sliding panels /metal gate would be locked upon close of business of the Store and that the keys to the storage cabinet and the wooden sliding panels/metal gate were kept by Father until 1998 when Father handed over the operation of the business of the Store to P. The events as supported by the documentary evidence set out in the Chronology showed that Father/Uncle/P had been operating the business of the Store on the Relevant Part and/or occupying the Relevant Part since at least early 1974.

95.  Ms Fok has been the Chairman of the IO since when the IO was incorporated. She is an employee of the MOs. She had confirmed that the Former Property Manager had handed over all documents they had to the IO upon IO’s incorporation. Ms Fok also confirmed during the trial that she was aware of the Store’s existence on the Relevant Part and that she would walk around the Kam Chung Building several times in a year and would walk past the Store.

96.  According to the IO’s pleaded case, there are 4 manholes on the Relevant Part which lead to the Kam Chung Building’s private sewage and drainage system (“Manholes”)[53].

97.  However, according to P, the Manholes and the drainage system were built for and meant to serve other buildings and not only Kam Chung Building in early 1990s[54]. It was P’s written evidence that there are only 3 Manholes in the Occupied Area, two of which were square in shape and they were created during the construction of the site where YF Life Tower now is. The third one, round in shape, being the one closest to Fenwick Street, belongs to the Government[55].

98.  According to P, the IO or any person in charge of the management of the Kam Chung Building had never before the commencement of the present action performed any inspection, maintenance or repair work at the Relevant Part as required by law to discharge their duties[56]. P’s evidence in his 1^st witness statement was that since the renovation of the Store until the date of his witness statement (12.06.18), no one had requested any of the Manholes be opened for inspection, cleaning or repairs[57].

99.  Mr Lau of the present management company of Kam Chung Building (part of the Winland group to which the MOs belong) had produced some photographs to demonstrate that P had complied with the instructions of the IO’s agents in removing P’s chattels on top of a round Manhole closest to Fenwick Street within the Relevant Part and complying with instructions to render assistance in IO’s maintenance work[58]. During the trial, Mr Lau admitted that he only became the manager of the present management company in September 2019 and that prior thereto, he was working for another company. Mr Lau admitted that he had no personal knowledge of matters concerning the Store prior to September 2019 save from what he saw from the documents. He further admitted that the photographs were of works carried out in 2020. He also admitted that he had P’s mobile telephone number and that he would contact P in case of any emergency works if the Store was closed.

100.  Mr Lau’s evidence clearly showed that if any maintenance works on the Relevant Part were necessary, he would contact P. I do not find it probable that the IO was not aware that P was/is the operator of the Store and/or the person who had/has the control of the space occupied by the Store. The photographs also showed that P was co-operative and would allow access to the Store for any necessary maintenance works on the Relevant Part, and in particular, the cold storage cabinet in the Store was moved aside to allow inspection to the Manhole closest to Fenwick Street by agents of the present manager company.

101.  There was also a video produced by Mr Lau to demonstrate he had free access through the Relevant Part along the Lane which was taken in September and November 2020[59]. As said by P, the Store is a wall store, and as the Store would be open for business during business hours, access by anyone past the Store along the Lane would always be possible.

F.5  Conclusion to Issues 1 and 2

102.  Even though there were some missing BR Certificates and/or Demand Notes of the annual Tobacco Licence fees and/or other invoices during the period from about early 1974 up to the date of the issue of the writ herein, there was no sufficient evidence that there had been any interruption to Father’s/Uncle’s/P’s/Store’s occupation of the Relevant Part since about early 1974. Having considered all the evidence, I am satisfied that P and his predecessors had been in continuous and uninterrupted exclusive factual possession of the Relevant Part from at least about early 1974, which had continued to the issue of the writ herein ie for some 43 years and thereafter had continued up and thereafter up to the time of the trial. In other words, by early 1994, P and his predecessors had had continuous and uninterrupted exclusive factual possession and occupation of the Relevant Part for 20 years.

103.  I therefore find the answers to Issue 1 and Issue 2 are both “yes”.

G.  LICENCE, ANIMUS POSSIDENDI, POSSESSORY TITLE – ISSUES 3, 4 AND 5

G.1  Issues 3, 4 and 5 are:

(1)  Issue 3 – whether P and his predecessors’ possession was pursuant to any licence

(2)  Issue 4 – whether P and his predecessors had the requisite intention to possess (animus possidendi) at the relevant period of possession

(3)  Issue 5 – whether P had successfully extinguished the right of IO to the Relevant Part, and whether P’s possessory title, if established, would be subject to any incorporeal rights of the IO, and if so, what those rights are

G.1.1.  P’s and IO’s respective case

104.  In the IO’s RRRRADC, it was averred by the IO amongst other things that upon investigation and inquiries made or caused to be made, any possession, occupation and/or enjoyment of the Relevant Part by the Store was/were pursuant to the consent, permission and/or licence of the co-owners of the Kam Chung Building[60]. This averment appeared to have been first made only in the amended defence and counterclaim filed on 24 July 2018.

105.  IO had relied on the following[61]:

(1)  Uncle had attached the Tenant’s Certificate to the Original Application Form which he had signed on 8 April 1974, and he had also signed the Declaration and by so signing, he acknowledged that his entitlement to use the Relevant Part was pursuant to the Tenant’s Certificate, or that the Relevant Part for the business of the Store was only used or occupied by the Store with the consent, permission and/or licence of the co-owner of the Kam Chung Building as a licensee, which had continued and subsisted until the revocation thereof by the IO’s 1^st Letter;

(2)  Alternatively, the relevant intent in the circumstances was that any right and/or title to the Relevant Part with the Store thereon could only stem and/or be acquired from the co-owner of the Kam Chung Building and the intention had continued and/or had subsisted until the revocation by the IO’s 1^st Letter;

(3)  Club Donhill wrote to the HK Electric indicating agreement to an electricity meter to be installed for use of the Store which indicated that the Store was at all material times a licensee of the co-owner of the Kam Chung Building;

(4)  The then owner of the 1/F of Kam Chung Building, Perfect Sun , had also applied to HK Electric for electricity to be supplied to the Store which showed the Store was at all times a licensee of the co-owner of the Kam Chung Building.

106.  It was however not IO’s pleaded case that any owners or the Former Property Manager had collected any rent from the Store or had authorized Father/Uncle to enclose the Relevant Part.

107.  P denied that the Store had occupied the Relevant Part under any tenancy or licence or that by the Original Application Form there was any representation made to the Government or any other third party to the effect that the Store had occupied the Relevant Part under any tenancy or licence. Further, it was P’s case that even if Father had occupied the Relevant Part under a licence, such licence was personal to Father, and that P had not been given any licence by anybody to occupy the Relevant Part for operating the Store after he took over the Store in about 1998.

108.  P also denied that the IO’s 1^st Letter was capable of constituting any revocation of any alleged licence or at all. P averred that IO’s 1^st Letter expressly denied any alleged licence by stating that the occupation of the Relevant Part by the Store was never permitted by IO[62].

G.1.2.  Licence – analysis of the evidence and findings

109.  As seen above, the IO’s case was that the possession and/or occupation of the Relevant Part by the Store was pursuant to consent, permission and/or licence of co-owner(s) of the Kam Chung Building, and the IO had relied on the Original Application Form, the Declaration and the Tenant’s Certificate, and further they had relied on P’s evidence in relation to Father’s acquaintance with 蔡克勤, and the Club Donhill Letter. It was actually not clear as to which co-owner(s) the IO alleged who had given consent/permission/licence for P and/or his predecessors.

110.  During the trial, P’s evidence was that Father decided to renovate the Store, and to apply for telephone service and various licences upon learning that Club Donhill would help Father (and/or Uncle) to apply for electricity supply. It was submitted on behalf of the IO that P’s such evidence was not credible as during cross examination, P had admitted that prior to Club Donhill agreeing to help, there was already electricity supply to the Store. However, as pointed out by Mr Chain, P’s evidence during the trial was only that there was electricity supply to the Wooden Hut and the Drinks Stall. There was no mention by P that there had already been electricity supply to the Store prior to the boss /owner of Club Donhill蔡克勤 agreeing to help.

111.  I accept P’s evidence that the willingness of 蔡克勤 to help had a significant impact on Father’s decision to invest and renovate the Store.

112.  In the IO’s Closing Submissions, it was submitted that all Father’s acts done in 1974 were open to another interpretation which was more probable, rather than merely agreeing to assist the Store to apply for electricity supply, 蔡克勤 gave a licence to Father to operate the Store on the Lane[63]. However, by agreeing to help would not necessarily mean that 蔡克勤 had given consent/permission/licence to Father to occupy the Relevant Part.

113.  First of all, even though P gave the Chinese name of the person whom he said was the boss/owner of Club Donhill, namely 蔡克勤, IO did not provide any evidence nor did they seem to have carried out any investigation as to whether 蔡克勤 or Club Donhill was an owner, or their relationship. In fact, as seen in the Land Registry record referred to in the Chronology between 17 July 1971 and 16 September 2002, a Mr Tsai Kut Kan (“Mr Tsai”) was the registered owner of the Entrance Hall on G/F and the entire 1^st Floor of Kam Chung Building and Mr Tsai’s name would sound in Cantonese very similar to 蔡克勤, ie the Chinese name of the man said by P to be the boss/owner of Club Donhill. P was never cross examined during the trial as to whether 蔡克勤 was in fact Mr Tsai or Tsai Kut Kan.

114.  Second, assuming that 蔡克勤was Tsai Kut Kan, there was no evidence as to the relationship between Mr Tsai and Club Donhill, save what P had said, that 蔡克勤 was the boss/owner of Club Donhill.

115.  During the trial, P had explained that he first saw the Original Application Form among the documents which Mother handed to him when he asked her to find supporting documents of P’s case. He agreed that the Declaration was to support the Original Application Form made in Uncle’s name and when P was asked whether the Tenant’s Certificate had existed, he said he was not clear. When P was asked to clarify whether he could not find the Tenant’s Certificate or it was a false document, his answer was he had no knowledge. P had also said he had no idea as to whether the Tenant’s Certificate was written by 蔡克勤 but when it was put to him that 蔡克勤 wrote the Tenant’s Certificate because the Store operated on the Relevant Part with his permission and assistance, P had said clearly that 蔡克勤 only wrote a letter for the installation of the electricity meter and it was not possible that 蔡克勤 had assisted in applying for the beer licence, and that he did not know who wrote the Tenant’s Certificate, ie if it existed.

116.  It was also submitted on behalf of the IO that from the evidence, it was clear that the Store was selling beer. However, this was never put to P during cross examination. As set out earlier, P’s pleaded case in his Reply to the IO’s RRRRADC was that the Original Application Form was not submitted and that “Choi Kee Store has not obtained any licence for selling beer”, and the Reply was last re-re-re-re-re-amended on 15 June 2023 about a month before the trial. P was not cross examined whether at any time after 8 April 1974, that he or Father/Uncle had applied for a licence to sell beer.

117.  In any event, I find no sufficient evidence that the Original Application Form had been submitted by Uncle on behalf of the Store together with the Declaration and the Tenant’s Certificate, if it had existed. I also find no sufficient evidence to contradict P’s evidence that there was no licence granted to the Store to sell beer as a retailer.

118.  It was however not disputed that Uncle did obtain the Tobacco Licence, for which Uncle must have made an application for the same under Cap 109, and to do so, Uncle must have complied with the requirements under the Dutiable Commodities Regulations, Cap 109A. It was not clear whether any documents similar to the Declaration and/or the Tenant’s Certificate had to be submitted in support of such application. Even assuming that similar documents had to be submitted for the purpose of an application for the Tobacco Licence, I find no sufficient evidence that 蔡克勤 had written or signed any document similar to the Tenant’s Certificate. As said earlier, 蔡克勤 if he was same person as Mr Tsai, he was an owner and not a principal tenant. There was no evidence that Club Donhill was a principal tenant of the Relevant Part. There was in fact no sufficient evidence that Club Donhill was a legal entity or when it was in operation. Even if 蔡克勤 or Mr Tsai was the co-owner whom the IO alleged had given consent/permission/licence to P’s predecessors, there was no sufficient evidence that 蔡克勤 or Mr Tsai was in a position to grant Father/Uncle consent, permission or licence to occupy the Relevant Part. In any event, Mr Tsai had sold the Entrance Hall, G/F and the entire 1/F of Kam Chung Building on 16 September 2002, and there was no evidence that he had sold it subject to any tenancy/or licence. There was also no evidence that thereafter Mr Tsai had owned any other units in the Kam Chung Building.

119.  As stated earlier, in the RRRRADC, the IO had also averred that Perfect Sun had applied to the Hong Kong Electric for electricity to be supplied to the Store[64]. Perfect Sun did not become the registered owner of the Entrance Hall on G/F and the 1/F of Kam Chung Building until 30 April 2004. P became the sole proprietor of the Store in October 2000. It was P’s evidence that he did not know Perfect Sun or any one from Perfect Sun. There was no sufficient evidence that Perfect Sun had granted any licence to P. It was not the IO’s pleaded case that Perfect Sun and/or its predecessor Ko Wai Ying had purchased/acquired the Entrance Hall on G/F and the 1/F of Kam Chung Building from Mr Tsai subject to any tenancy or licence, nor as mentioned earlier, there was any such evidence.

120.  Among those Tobacco Licences issued to the Store over various years disclosed by P, there was a copy of a Tobacco Licence issued to a Chui Oi Lin of Winner Bar[65].

121.  This Court noticed that according to the Land Registry record referred to earlier in the Chronology, there was a tenancy agreement dated 6 November 1975 entered into by the registered owner of Shop A, G/F, Kam Chung Building, a Lau Yin Ching with a “Winner Bar”, for a period of 5 years from 1 December 1975. There was no further tenancy agreement entered into with “Winner Bar” thereafter. Shop A appeared to be adjacent to the Relevant Part occupied by the Store. According to the Land Registry record, Shop A was purchased by Lau Yin Ching from the developer Lee Hing on 22 April 1969 after the issue of the occupation permit, and Shop A was later sold to a Law Wai Kun on 15 May 1987.

122.  P was not cross examined on any relationship or connection, if any, the Store or Father/Uncle/Mother had with the Winner Bar/Chui Oi Lin. In any event, Winner Bar only became a tenant of Shop A on 6 November 1975, and there was no evidence that Winner Bar had issued any document similar to the Tenant’s Certificate in 1974, or that it could have authorized or granted any licence for the Store to occupy the Relevant Part, nor was this the IO’s case.

123.  As summarized by DHCJ Marlene Ng (as she then was) in Civic Limited v 余綺妙 and others, unrep, HCA 225/2011, 28.03.14, two tests have been propounded for implied permission in England[66], and the then Deputy Judge had appointed out that although there was no final determination as yet on the applicable test for implied permission, learned textbooks had leaned in favour of the formulation derived from Lord Walker in the appeal decision in Regina (Beresford) v Sunderland City Council, [2002] 1 AC 889, at pp912-915, ie that in order to establish a licence, there must be communication, in writing, by spoken words or by overt and unequivocal conduct, that was intended to be understood, and was understood, as a permission to do something that would otherwise be an act of trespass[67]. It was further pointed out by DHCJ Marlene Ng that under the test propounded by Lord Walker, it is important to distinguish between acquiescence and express/implied permission, and that silent passive inactivity on the part of the landowner amounting merely to acquiescence is not enough to stop the limitation period from running[68].

124.  On either test, there would need to be evidence of an overt and unequivocal act or demonstrable circumstances from which the inference can be drawn. Mr Kong however submitted that it was never IO’s case that there was an implied licence between P/his predecessors and the owner of Club Donhill and/or the owner thereof and/or any principal tenant and that the IO’s case was that there was sufficient evidence for the Court to infer an express licence.

125.  However, having considered all the evidence and the facts in the present case, I find no sufficient evidence of any such overt act or any other circumstances from which any inference can be drawn that the possession and/or occupation of the Relevant Part by Father/Uncle/P/Store was pursuant to the consent, permission and/or licence, whether implied or express, of co-owner(s) of the Kam Chung Building, or of any principal tenant(s). Thus, in my view, the answer to Issue 3 is simply that there was no sufficient evidence that P and his predecessors’ possession and occupation of the Relevant Part was pursuant to any licence.

G.1.3.  Issue 4 - animus possidendi

126.  Issue 4 was whether P and his predecessors had the requisite intention to possess at the relevant period of possession.

127.  Mr Kong had referred this Court to the case of Tsang Foo Keung & Anor v Chu Jim Mi Jimmy [2017] 3 HKC 527, CACV 178/2015. The trial judge ordered the 1^st defendant to deliver up vacant possession of a small area of land he and his parents had occupied while carrying on business as a hawker stall on a flight of steps at the western end of On Hing Terrace where it joined Wyndham Street in Central.

128.  As held by the Court of Appeal, amongst other things, the formulation of the intention to possess was phrased as “in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow”, and that the intention to possess would not be established if there was evidence pointing to a contrary conclusion or the acts of the person who claimed possession were equivocal and capable of more than one interpretation[69].

129.  It was submitted by Mr Kong that in the present case, similar to the Tsang Foo Keung case, there was evidence pointing to a contrary conclusion, namely that P and his family occupied the Relevant Part under the written permission of a principal tenant of Kam Chung Building, and as such, P and his family lacked the requisite intention to dispossess each and every owner of the building[70].

130.  As said earlier, I have found no sufficient evidence that P and his predecessors had occupied the Relevant Part under the consent/permission/licence of an owner and/or a principal tenant, whether express or implied.

131.  It was P’s evidence that Father/Uncle/he had never obtained any one’s consent, permission or licence to possess and occupy the Relevant Part. It was his written evidence that upon completion of Kam Chung Building, Father had erected a canopy on the site of the former Fruit Stall (ie the Occupied Area), without seeking consent from any one and as mentioned earlier, it was his evidence during the trial, that Father had built a “hut” over the Occupied Area with the intention to adversely possess the site, namely to “霸地方”. Even though this part of his oral evidence was not stated in his witness statement, there was no sufficient evidence of any this pointing to a contrary conclusion of Father’s or Uncle’s or P’s intention to possess the Relevant Part.

132.  It was submitted on behalf of the IO that P lacked the intention to possess because he did not resist or refuse the IO’s agents to open one of the Manholes. P’s co-operation as a neighbour would not indicate that there was no intention to possess on his part. As said earlier, the fact that Mr Lau had admitted during the trial that the IO had P’s contact telephone number and they had to contact P if the Store was closed for any emergency maintenance/repair works would in my view support P’s case rather than the IO’s.

133.  Having considered all the evidence, I am satisfied that, for Issue 4, P and his predecessors had the requisite intention to possess (animus possidendi) at the relevant period of possession, namely from early 1974 onwards to early 1994 which had continued todate.

G.1.4.  Issue 5 – Possessory title

134.  In light of all above said, I find P has successfully extinguished the right of the IO to the Relevant Part by this action and P has established a possessory title to the Relevant Part latest by early 1994.

135.  Issue 5 also concerns whether P’s possessory title, if established, would be subject to any incorporeal rights of the IO and if so, what those rights are. I will consider incorporeal rights later in this judgment.

H.  ILLEGALITY - ISSUE 6

136.  Issue 6 is whether P’s claim to possessory title over the Relevant Part is defeated/excluded by illegality.

H.1  The IO’s case

137.  The IO’s case is that P’s claim for possessory title should be refused on the ground of illegality and contravention of public policies.

138.  IO relies on 3 alleged illegal acts committed by P, namely

(1)  building UBWs on the Relevant Part, thereby breaching sections 14 and 40 of the Buildings Ordinance, Cap 123 (“Cap 123”) – (“1^st Illegal Act”)

(2)  obstructing and narrowing down the Lane, which is a Fire Escape Route, thereby endangering the occupants of the Kam Chung Building and David House, and increasing the Fire Risk at the Relevant Part, breaching section 4A of Summary Offences Ordinance, Cap 228 (“Cap 228”) – (“2^nd Illegal Act”)

(3)  creating nuisance to the occupants of the Kam Chung Building by reasons of the UBWs on the Relevant Part and the fire hazard created by the Store – (“3^rd Illegal Act”)

H.2  The general legal principles on illegality

139.  It has been decided by the Court of Appeal in Monet Investment v Lau Chi Kan and anor, [2023] HKCA 479, CACV 448/2020, to follow the majority decision in the UKSC case of Patel v Mirza [2017] AC 467[71], and that the common law on the defence of illegality was declared to be decided on the “range of factors approach”, based on the trio of necessary considerations. The “trio of necessary considerations” are[72]:

(1)  consider the underlying purpose of the prohibition which has been transgressed;

(2)  consider conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim; and

(3)  keep in mind the possibility of overkill unless the law is applied with a due sense of proportionality.

140.  Mr Chain had referred the Court to R(Best) v Chief Land Registrar [2016] QB 23 which he relied on. It was argued by Mr Kong on behalf of the IO that R(Best) was decided prior to Patel v Mirza.

141.  The key question which arose in R(Best), a claim for judicial review, was whether the criminalising of trespass by “living in” a residential building pursuant to section 144 of LASPOA[73] had prevented time running for applications for registration of title by adverse possession to registered land[74]. R(Best) was cited by Yuen JA in her judgment in Monat in considering whether the ex turpi causa maxim applies to the law of adverse possession, and as pointed out by her, R(Best) was an example of the comprehensive exercise that should be undertaken by the Court in considering whether the maxim would apply. In R(Best), the English Court of Appeal affirmed the lower judge’s decision, that the mischief at which s.144 of the LASPOA was aimed had nothing to do with the operation of the law of adverse possession[75].

142.  Yuen JA had also referred to another case R(Smith) v The Land Registry, [2010] EWCA 200 in her judgment in Monat, where a claim to adverse possession of land, which included criminal trespass over part of a public highway and contrary to the Highways Act 1980, was rejected[76]. Yuen JA concluded that the court can only decide whether the ex turpi causa maxim has, or has no, application to a claim of adverse possession in any particular case after examining all the relevant factors set out in the “range of factors approach” based on the trio of necessary considerations in Patel[77].

143.  With the above legal principles in mind, I turn to the present case.

H.3  The 1^st Illegal Act – UBW(s)

144.  The facts are not disputed and it is common ground between the building experts of the parties, Mr Siu and Mr Lam in their Joint Building Report that the Store is a UBW[78]. The location of the Store is also agreed.

145.  Section 14 of the Cap 123 states as follows:

“14. Approval and consent required for commencement of building works, etc

(1) Save as otherwise provided, no person shall commence or carry out any building works or street works without having first obtained from the Building Authority—

(a) his approval in writing of documents submitted to him in accordance with the regulations; and

(b) his consent in writing for the commencement of the building works or street works shown in the approved plan.

(2) Subject to section 28B(4), neither the approval of any plans nor the consent to the commencement of any building works or street works shall be deemed—

(a) to confer any title to land

(b) to act as a waiver of any term in any lease or licence; or

(c) to grant any exemption from or to permit any contravention of any of the provisions of this Ordinance or of any other enactment.”

146.  Section 40 (1AA) of the Cap 123 then provides that any person who knowingly contravenes section 14(1) in respect of building works (other than minor works) or street works shall be guilty of an offence.

147.  First of all, the Long Title of the Cap 123 states the ordinance is “to provide for the planning, design and construction of buildings and associated works, to make provision for the rendering safe of dangerous buildings and land, and to make provision for matters connected therewith”.

148.  In Monat, Yuen JA indicated that she would tend to agree that section 14 of Cap 123 is to ensure public safely in the construction of buildings by ensuring that plans are submitted and approved before building takes place. In Monat, the brick house was built by the father of the 2^nd defendant, not by his mother or by the 2^nd defendant himself, and that it was found that the plaintiff in that case had not proved that mere occupation by the 2^nd defendant and his mother would be in breach of section 14 of Cap 123.

149.  Although it was P’s pleaded case in his RASOC that throughout the years since not later than early 1974, P and his family had erected, affixed, installed and/or maintained, inter alia, certain structures and/or fixtures on the Relevant Part of the purpose of operating the Store as particularised therein[79], as mentioned earlier, P’s written evidence was that it was Father who had built a canopy on the wall of the completed Kam Chung Building over the area occupied by the former Fruit Stall and to further erect wooden shelves and rails, and planks to enclose the area[80]. Further, during the trial, P then mentioned that Father built a “hut”. It was P’s oral evidence that as Father had worked as a construction worker, Father was the one who built the canopy or the “hut” and the shelves. P’s evidence was that Father “佢一手一腳做”. I do not find sufficient evidence before this Court that it was P who built or had participated in the building of any UBW as submitted by the IO, and/or there was sufficient evidence that it was P who had committed an offence or in breach of section 14 of Cap 123.

150.  Even though IO was incorporated in September 2005, as mentioned earlier, IO’s 1^st Letter was only sent to P on 5 August 2013. In this letter, IO had enclosed a copy of a notice letter sent by the Buildings Department to the IO dated 12 December 2011. It was not disputed by the IO that this was the first notice sent by the Buildings Department (“1^st Notice Letter”), and it was argued by the IO that there was no evidence to suggest that the Buildings Department was aware of the existence of the Store or that the Store was an UBW and yet decided not to take any enforcement action before 2011[81].

151.  In the 1^st Notice Letter, IO was informed that there was a “Revised Enforcement Policy” against UBWs announced on 1 April 2011 and that under the new policy, the Buildings Department intended to issue an order under the Cap 123 to the owners to demolish all UBWs on the Ground Floor, No 17, Fenwick Street, Hong Kong, and that in the interest of the owners, the owners should voluntarily demolish all UBWs as soon as possible[82].

152.  There was no sufficient evidence as to what UBWs were referred to in the 1^st Notice Letter. There were no particulars of the UBW(s) set out by the Buildings Department in the 1^st Notice Letter or whether, in particular that the UBW(s) referred to the Store. The address was merely stated to be the “Ground Floor”, and there was no specific reference to “side-door” or the Lane. The 1^st Notice Letter was sent to the IO and not to P, and although it was sent to the IO in December 2011, IO did not even send the 1^st Notice Letter or write to P until August 2013, some 20 months later. There was in any event, no follow up action taken by IO against P/the Store after the IO’s 1^st Letter to P, nor was there any action taken by the Buildings Department against P/the Store after their 1^st Notice Letter.

153.  It appeared to be only after the commencement of this action, namely on about 9 April 2019 that the Buildings Department sent a further notice letter to the IO and it was only in this letter that it was clear that the Buildings Department referred to the Store as being the UBW[83]. This was some 21 months after the issue of the writ herein. As set out earlier, it is this Court’s finding that P had acquired a possessory title latest in about early 1994. Anyway, there had been no enforcement action taken by the Building Authority prior to the issue of the writ for some 43 years since early 1974.

154.  It was not until 16 May 2023 that a building order was formally issued by the Building Authority to the IO under section 24(1) of the Cap 123 (“BO”)[84] and this was enclosed in a letter dated 25 May 2023 from the IO to P’s solicitors, demanding P to remove the UBWs in compliance with the BO[85]. P had on 6 June 2023 lodged a notice of appeal against the BO[86].

155.  In any event, I agree with Mr Chain, if P succeeds in his appeal, any allegation of illegality based on the UBWs is rendered de minimis if not falls away, and if P should fail in his appeal, the BO will have to be complied with, and the UBW(s) will have to be removed by P and will thus cease to exist.

H.4  2^nd Illegal Act – P’s contravention of section 4A of Cap 228 and the underlying purpose of section 4A

156.  Section 4A of the Cap 228 states that:-

“Any person who without lawful authority or excuse sets out or leaves, or causes to be set out or left, any matter or thing which obstructs, inconveniences or endangers, or may obstruct, inconvenience or endanger, any person or vehicle in a public place shall be liable to a fine at level 2 or to imprisonment for 3 months.”

157.  Section 2 of the Cap 228 provides that public place includes all piers, thoroughfares, streets, roads, lanes, alleys, courts, squares, archways, waterways, passages, paths, ways and places to which the public have access either continuously or periodically, whether the same are the property of the Government or of private persons.

158.  There was no dispute over the underlying policy objective of section 4A of Cap 228[87].

159.  It was submitted by Mr Kong that the Lane, being partly on private land and partly on government land, to which the general public has access, is a public place under the Cap 228, and that the occupants of the Kam Chung Building and David House may use the Lane to discharge into Fenwick Street in case of emergencies.

160.  Mr Chain had referred the Court to HKSAR v Choi Chau Cheong and another [2004-2005] HKCLRT 69. That case concerned obstruction of “public place”. The defendants were found in a passage inside a shopping arcade in Sai Wan Ho with a handcart containing congee and noodles. They were convicted of inter alia causing obstruction in a public place, contrary to s 4A of Cap 228. It was held by the then Deputy Judge Derek Pang that if a place squarely falls within one of the defined categories within the meaning of the Cap 228, then there is no need to consider other factors; otherwise, other factors will have to be considered, and that it is clear that, under the Cap 228, whether a place is public or private, it must be a place to which the public “have access” before it can qualify as a “public place”, but it is not clear from Chan Yuk Chun v R whether this is equivalent to the “right” referred to in that case, and that on the face of it, the two bear different meanings[88]. It was held in that case that the shopping arcade did not prevent access by pedestrians, and that the passage allowed visitors to go from point A to point B , and this fully met the requirements of Cap 228, and that the metal poles at the entrance of the shopping arcade were not directed at the pedestrians, but served to prevent oversized trolleys or objects from accessing the shopping arcade[89].

161.  It was submitted by Mr Chain on behalf of P that the Relevant Part was inaccessible and that there was no complaint for at least 48 years (from 1974 to 2022), and that before the owners’ title was extinguished, they owned the land and not just a right of way, and that after their title was extinguished, there was likewise no right of way, nor was it their pleaded case that they had a right of way through the Relevant Part, upon their title being extinguished.

162.  Under section 4A, there must be a “matter or thing” which is set out or left, to obstruct, inconvenience or endanger any person or vehicle in a public place. Presumably, IO is alleging that the “matter or thing” is the Store, or the UBWs but the Store/UBWs are on the Relevant Part which is on private land to which P has established possessory title since about early 1994. I am not satisfied that P is in breach of section 4A of Cap 228.

H.5  3^rd Illegal Act - Nuisance

163.  Mr Kong had referred the Court to the legal principles governing public nuisance in Leung Tsang Hung v The Incorporated Owners of Kwong Wing House [2007] 4 HKLRD 654 , FACV 4/2007.

164.  The legal principles were set out extensively by Ribeiro PJ (not Bokhary PJ as submitted by Mr Kong), and briefly, they are as follows:

“C.1 The nature of public nuisance

[12] Public nuisance is a common law offence. Inheriting the jurisdiction from the office of Attorney-General, the Secretary for Justice may also move to restrain a public nuisance in a relator action brought on behalf of the public at large. Public nuisance is furthermore actionable as a tort by an individual who has been caused particular damage over and above the damage suffered by the public at large… The ingredients of a public nuisance are the same for both the crime and the tort.

[13] While there is an overlap between the elements of public and private nuisance, they are causes of action which are different in kind. Private nuisance is a tort protecting property rights. It is concerned with the activities of the owner or occupier of property within the boundaries of his own land which may harm the interests of the owner or occupier of other land. But while most reported public nuisance cases involve nuisances on or emanating from land or buildings, an interest in land is not an essential element of the tort. …

C.2 Hazards which amount to public nuisance

[14] A state of affairs which constitutes a public nuisance is one which endangers the lives, safety, health, property or comfort of the public; or obstructs the public in the exercise or enjoyment of any right that is common to members of the public…

C.3 Acts and omissions

[15] A defendant may be held liable for public nuisance on the basis of his positive act or his omission. … In each case, the nuisance hazard which arises from the act or omission must be causative of particular injury to a member of the public…

[16] Where a nuisance hazard results from a positive act by the defendant, the basis of liability is relatively straightforward. But before a defendant’s omission is actionable, he must first have been under a legal duty to eliminate the nuisance hazard or to prevent it from causing harm to the public. The law must then recognize an entitlement on the part of an injured plaintiff to compensation for the defendant’s omission, which entitlement does not follow as a matter of course.

C.4 Need for knowledge or presumed knowledge

[17] The modern case-law establishes that a defendant can only be liable for public nuisance if he knew or ought reasonably to have known (in that the means of knowledge were reasonably available to him) that his act or omission would result in a nuisance hazard presenting a real risk of harm to the public. Where a defendant ought reasonably to have known of the risk, he may be said to have the necessary ‘presumed knowledge’…

[18] It is furthermore established that, as with the tort of negligence, a defendant is not liable in public nuisance unless the injury caused to the plaintiff is of a foreseeable type.

…

[23] In my view, the law has now evolved to the point where the question is simply whether the defendant knew or ought to have known of the relevant nuisance hazard. Thus, it must be shown that a defendant whose positive act creates the hazard knows or ought to know that it is the likely consequence of his act. And a defendant who is potentially liable on the basis of an omission must be shown to have had knowledge or presumed knowledge that a nuisance hazard is the likely consequence of his failure to carry out his applicable duty…

C.5 Negligence not essential but liability is not strict

[24] It is clear that negligence is not an essential element of public nuisance. However, this does not mean that liability is strict or absolute…

C.6 Duty may be non-delegable but liability is not strict

[25] It is also important not to confuse strict or absolute liability with liability arising under a non-delegable duty…

…

C.7 Liability based on positive acts

[28] Where alleged liability is based on a positive act, the defendant is liable if the act is his own or the act of someone for whom he is vicariously liable…

C.8 Liability based on omissions

[29] As noted above, an omission is only actionable in public nuisance if the defendant is under a duty to neutralize the nuisance hazard and fails to do so in circumstances where the law confers on the injured plaintiff of the right to compensation from the defendant…

C.9 Occupiers of land : the criterion of control

[30] … Occupiers of land generally come under a duty to remove any nuisance hazard on or emanating from the land of which they have knowledge or presumed knowledge, or at least to prevent such hazard from injuring members of the public. If they fail to do so and injury results, they are liable in public nuisance for such omission…

…

C.10 Relevance of the defendant’s resources

[41] … in the context of liability by omission, a particular defendant’s resources are relevant to his potential liability. The law adopts the criterion of what is reasonable in all the circumstances…

…

C.11 Actionable omissions unrelated to occupation: public authorities

[46] ….”

165.  Leung Tsang Hung was a civil action in which a corner of an unauthorised extended concrete canopy affixed to the exterior wall of a building which was common part of the building, broke off and fell killing the deceased hawker on the street below. The flat owners who erected the unauthorised canopy, and the flat tenant and also the incorporated owners of the building were sued by the deceased’s estate (plaintiff) for public nuisance. The incorporated owners were found not liable and the plaintiff appealed, and it was accepted that the liability of the incorporated owners should be determined by applying the law of public nuisance only. The appeal was allowed by the Court of Final Appeal and the incorporated owners were found liable for public nuisance.

166.  There is no dispute on the legal principles set out above in relation to public nuisance, which is a common law offence. Nuisance committed in public places is in fact also an offence under section 4 of Cap 228, but this was not referred to, nor relied on, by the IO.

167.  The 3^rd Illegal Act relied on by the IO was that P creating nuisance to the occupants of Kam Chung Building by reason of the UBWs at the Relevant Part and the fire hazard created by the Store[90]. Thus, for the 3^rd Illegal Act of nuisance, the hazards relied on by the IO, would be the UBWs being an obstruction and causing fire hazard.

168.  In the present case, nuisance is being raised by the IO as part of its defence of illegality to P’s claim of adverse possession, as well as part of IO’s counterclaim against P. There is no authority to say private nuisance is an offence under common law.

169.  Having considered those legal principles set out by Ribeiro PJ, I agree with Mr Chain that there are differences between nuisance being raised as a defence of illegality, and nuisance being raised as a cause of action in a counterclaim. I also agree with Mr Chain, that for illegality based on nuisance raised as a defence, IO should be relying on public nuisance.

170.  As said, the Relevant Part is on private land, and the 3^rd Illegal Act relied on by the IO is that P created a nuisance to the occupants of Kam Chung Building, and not a nuisance to the public and thus in my view, the IO has not satisfied this Court that P is to be held liable for public nuisance.

H.6  Public Policies and the “trio of necessary considerations”

171.  To summarise, the underlying purposes of section 14 of Cap 123, or section 4A of Cap 228, or the common law offence of public nuisance are not dispute. One of the main underlying purposes of all these provisions/prohibitions is to ensure public safety. The Store has occupied the Relevant Part since at least early 1974, and until recently, there had been no enforcement actions taken by the authorities for the three Illegal Acts relied on by the IO. The only actions appear to be prosecutions by the Food and Environmental Hygiene Department (FEHD) against P for operating an unlicensed food factory and the BO issued in 2023. In particular, as seen earlier, the Building Authority did not take any follow up action after their 1^st Notice Letter in 2011. There had also been no action taken by the authorities at the time when Father/Uncle/P applied for a Fixed Pitch Licence when the authorities inspected the site in 1977 and there was an interview and further investigations in 1985[91]. Although there had been prosecutions by the FEHD against P under sections 31(1)(a), 35(1)(a) and 35(3)(a) of the Food Business Regulations, Cap 132X for operating an unlicensed food factory, these only started in early 2017.

172.  On the other hand, there is the public policy of discouraging stale claims. Having considered all the circumstances of this case, and keeping in mind the possibility of overkill unless the law is applied with a due sense of proportionality, I have come to the view that the alleged Illegal Acts did not and would not disqualify P’s possession of the Relevant Portion for the purpose of the Limitation Ordinance.

I.  NUISANCE AND TRESPASS – ISSUE 8

173.  Issue 8 is as follows:

(1)  Whether P is liable to the IO for nuisance

(2)  Whether P is liable to the IO for trespass

174.  The above issues arose out of the IO’s counterclaim against P.

175.  In light of this Court’s finding that P has acquired a possessory title to the Relevant Part in about early 1994, the IO’s/owners’ title to the Relevant Part has been extinguished since about early 1994. The IO can now no longer counterclaim against P for trespass.

I.1  NUISANCE

176.  It appears from IO’s Closing Submissions that the IO is counterclaiming against P for both public nuisance and private nuisance.

I.1.1.  Legal principles

177.  The legal principles on public nuisance have been set out earlier. As stated by Ribeiro PJ, public and private nuisance are causes of action which are different in kind. Private nuisance is a tort protecting property rights and is concerned with the activities of the owner or occupier of property within the boundaries of his own land which may harm the interests of the owner or occupier of other land, whilst for public nuisance, an interest in land is not an essential element of the tort.

178.  Mr Kong also referred the Court to the principles on private nuisance summarised by Madam Recorder Eva Sit SC in paragraph 51 of her judgment in Cheng Lai Yin v Liu Yee Mui, unrep, HCMP 1296/2055, 04.4.22:

“(1) A private nuisance is committed by a person doing, on his own land, something which he is lawfully entitled to do, but the consequences of which extend to the land of his neighbour by (i) causing an encroachment on his neighbour’s land; (ii) causing physical damage to his neighbour’s land; or (iii) unduly interfering with his neighbour in the comfortable and convenient enjoyment of his land…

(2) For nuisance of type (ii) (damage), liability is established by proving damage to the land, or “material injury to the property”, which includes visible physical deterioration…

(3) For nuisance of type (iii) (interference with enjoyment), it must be a real interference with the comfort/convenience of living according to standards of the average man, and the discomfort must be substantial to any person occupying the plaintiff’s premises. All the circumstances, including the time of the commission of the act complained of, the place of its commission, the manner of committing it, and the effect of its commission (whether the effects are transitory or permanent, occasional or continuous) have to be taken into account in determining whether the matter complained of is or is not productive of sensible personal discomfort such as to be regarded as nuisance…. No financial or physical damage needs to be proved…

(4) Whether proof of negligence of a defendant is required depends on the nature of his conduct – if he deliberately or recklessly uses his land in a way which he knows will cause harm to his neighbour and such harm is considered unreasonable infringement of his neighbour’s interest in the latter’s property by the court, he is liable for foreseeable consequences of his unreasonable user; if he knew or ought to have known that in consequence of his conduct harm to his neighbour is reasonably foreseeable, he is under a duty to prevent such consequences as are reasonably foreseeable; if the defendant is said to be continuing a nuisance, proof of negligence is essential…

(5) In nuisance cases the plaintiff is prima facie entitled to an injunction if the court finds that there has been an unlawful interference with his use and enjoyment of the land that may be continued or repeated in the future, and will be denied only if special circumstances exist…

(6) As to damages:-

(a) Where damage to property has been caused, the general rule is that the measure of damages is the difference between the money value of the owner’s interest in property before and after the damage was done and not the cost of repair.

(b) Where the nuisance involves interference with amenity and enjoyment of property the court must place a value on an intangible loss which cannot be assessed mathematically, by assessing the notional reduction in the rental value of the afflicted property, or assessing damages generally referring as appropriate to decided cases insofar as they are helpful, or a mixture of the approaches above….”

I.1.2.  IO’s pleaded case

179.  In paragraph 15(fa) of the RRRRADC[92], it was pleaded by the IO amongst other things that P

“(fa) continues to obstruct and/or block the Lane (in particular the Fire Escape Route) which poses significant fire hazards to [Kam Chung Building] and/or other adjacent buildings. Such obstruction and/or blockage amount to a substantial interference with the reasonable possession, occupation, enjoyment and/or safety of the co-owners of the [Kam Chung Building (as well as those of the adjacent buildings), constituting an actionable private nuisance and/or public nuisance in law (as well as offences under … and other applicable ordinances/regulations) …”

(emphasis added)

180.  IO relied on particulars pleaded in their RRRRADC and in particular, P’s wrongful acts, omissions, private nuisance and/or public nuisances has/have created and wold continue to create substantial difficulties, (i) in the regular checks and maintenance of the Fire Escape Route (which includes inter alia the Relevant Part, or part thereof) by the IO and/or other relevant bodies and/or entities and (ii) fire-fighters, emergency support teams and/or medical teams to carry out emergency duties using the Fire Escape Route (which includes inter alia the Relevant Part, or part thereof).

181.  To summarise, IO’s complaints are essentially that P has obstructed and blocked the Lane in particular the Fire Escape Route which poses significant fire hazards to Kam Chung Building and/or Adjacent Buildings.

I.1.3.  Analysis of the evidence

182.  In the IO’s Closing Submissions, they mainly relied on 5 matters in support of their allegation of the Fire Risk brought by the Store, namely:

(1)  Fire Load

(2)  Fire Load Density

(3)  Evacuation Time

(4)  Fire Escape Route

(5)  Ultimate Place of Safety

I.1.3.1.  Fire Load

183.  “Fire Load” equals to the total weight of the combustible materials times the caloric value of the same, and during the trial, the two fire experts agreed to the figure of 10 MW. IO’s fire expert Ms Choi cited an example of the fire size similar to 2 passenger cars but P’s fire expert Mr Tsui opined that as the fire engine in an urban area such as Wan Chai can arrive in 6 minutes upon receipt of a call, the possibility of the fire growing up to 10 MW is not possible and moreover, such fire size can be extinguished by a hose reel jet. This is no sufficient to contradict Mr Tsui’s evidence.

I.1.3.2.  Fire Load Density

184.  Both fire experts agreed that the Fire Load Density is an important, but not conclusive, indicator of Fire Risk. According to the experts, the Fire Load Density equals to the Fire Load divided by the floor area of the premises, but they disagreed on the floor area to be adopted in calculating the Fire Load Density of the Store.

185.  It was Mr Tsui’s evidence that based on a document entitled “Fire Grading of Building issued by His Majesty’s Stationery Office”[93] the grading of occupancies according to fire load can be classified as follows[94]

(1)  Low – ≤1,135 MJ/m²

(2)  Moderate – >1,135 MJ/m² but ≤ 2,270 MJ/m²

(3)  High – >2,270 MJ/m², but ≤ 4,540 MJ/m²

186.  Ms Choi disagreed with the above classification and her evidence was that she had never seen such a document in her practice.

187.  Mr Tsui used an area of 30.25 m² , namely the total area covered by the metal canopy to arrive at a Fire Load Density of 410.16 MJ/ m² [95] whereas Ms Choi prepared a table, showing the respective Fire Load Density in the 4 sections A, B, C, D[96].

188.  From a layout plan prepared by Ms Choi[97], under the metal canopy along the Lane, there is a shorter wooden canopy which extends from Fenwick Street to above what appears to be the entrance to the male lavatory of Kam Chung Building. Sections A, B, and C are under the wooden canopy. Section A is against the exterior wall of Kam Chung Building and there are wooden cabinets and shelves, section C is against the exterior wall of David House and there are one wooden cabinet and two metallic cabinets in that section. Between section A and section C is a passage, ie section B of 7.45 m in length and 0.84m in width (6.26 m²). Beyond the wooden canopy, the metal canopy extends further over the Lane, and under the extended metal canopy area, there are two wooden cabinets (numbers 7 and 8 by Ms Choi) against the exterior wall of Kam Chung Building, and that area is section D of 1.15(0.61) in length and 0.97 (0.87) in width.

189.  When Ms Choi was asked during the trial about her way of calculations, she explained that she was only offering calculations from a different angle and would not say Mr Tsui’s approach/calculations were wrong.

190.  In Ms Choi’s solo report, she had said that with the considerable Fire Load present in the Store, the Store could not be regarded as a “wall stall” but as a small shop instead[98].

191.  Mr Tsui had explained that although the Store is in a Lane, and open ended on two sides, if there is no ceiling/canopy, there would be no building to which the “Code of Practice for Fire Safety in Buildings 2011”[99] (“Buildings Fire Safety Code”) would apply and no issue of Fire Load Density would arise and that was why for his calculations, he took into account the entire Store, ie the area occupied by the Store under the metal canopy.

192.  As indicated in paragraph 4.3.2(b) of the Joint Fire Report, Mr Tsui also did not agree with Ms Choi using two different ways for her calculations, namely (i) calculating sections A, B and C by dividing the whole floor area, and then (ii) calculating the area of Cabinets no 7 and 8 in section D and not the whole canopy covered area as well as the floor area was not the correct method stated in Part 1 of the Fire Code[100].

193.  During the trial, Mr Tsui again pointed out the above, namely that Ms Choi calculated the area of the passage between sections A and C for the area covered by the wooden canopy/wooden ceiling, but not the passage or space in the rest of the area (the rear area) where Cabinets no 7 and 8 are, which are covered by the metal canopy. When Ms Choi was asked about this, her explanation was section D was the cooking area, and when asked why she did not calculate the passage or space in section D, she said her calculations was “from another angle” and that the Fire Risk is particularly high in section D, as seen in the tables.

194.  I have to say I am not convinced by Ms Choi’s explanations as to why the passage/space in section D was not included in her calculations. As she herself had considered the Store to be a small shop, then in my view, the entire shop area should be taken into account. I find Mr Tsui’s approach is a more reasonable and logical one, and I accept his calculations.

195.  In any event, as pointed out by Mr Chain, even based on Ms Choi’s calculations, the Fire Load Density would be 617.6 MJ/m² and 911.1 MJ/m² respectively, and that these figures would still be lower than 1,135 MJ/m² which according to the grading set out earlier, is “Low”. There was no sufficient evidence that Mr Tsui’s grading was incorrect even though Ms Choi had never seen the document referred to by Mr Tsui.

I.1.3.3.  Evacuation Time, Fire Escape Route, Ultimate Place of Safety

196.  Both Mr Chain and Mr Kong agreed that it is unnecessary for the Court to consider the issue of the ultimate place of safety.

197.  The issues of evacuation time and the Fire Escape Route can be considered together.

198.  As this Court has found that P has acquired a possessory title to the Relevant Part by early 1994, the Relevant Part is private land and as pointed out by Mr Chain that there is no evidence that anyone enjoys a right of way over the Relevant Part. Thus, the issues of evacuation time and the Fire Escape Route are more about obstruction of the Lane caused by the Store.

199.  As set out earlier, the Lane has become a “L” shape after completion of YF Life Tower. The horizontal part of the “L” is in fact longer and narrower than the perpendicular part of the “L” shape (respectively referred to “Longer Part” and “Shorter Part”). The Longer Part , which leads to Fenwick Street comprises 2 portions, namely a strip of land having a width of 900 mm is the Relevant Portion on private land, and the remaining portions having a width of 15 mm is government land, and the total is about 2400 mm[101]. The Shorter Part is of width of approximately 2.93m and leads to Jaffe Road[102].

200.  There is no dispute that the Lane is a “service lane” and its functions are those set out by the IO’s building matters expert Mr Lam in his solo report[103]. Mr Lam has also set out that the stairs (or exit routes) in Kam Chung Building and David House are of 1066mm in width and those in YF Life Tower are of 1075mm[104]. Mr Lam is of the view that:

(1)  the Lane being a service lane constituted cardinal or principal part of the exit routes/fire escape routes for discharging evacuees towards Jaffe Road or Fenwick Street which is the designated ultimate place of safety;

(2)  the existence of the “Structures” (as defined there) does constitute imminent danger to life and property and/or does create an obvious hazardous situation to the occupants of both the Adjoining Buildings and surrounding buildings and significantly deprived those occupants the necessary means of escape and the only option available to eliminate such dangers caused by the Structures is to remove the Structures completely.

(3)  Mr Lam is of the view that the Structures are UBWs.

201.  P’s building matters expert Mr Siu did not disagree that the Lane is in general terms part of the Fire Escape Route and only emphasised by definition the Lane is an open area outside the subject buildings and connecting directly onto streets, and he pointed out that strictly speaking, there is no definition of “Fire Escape Route” in the Fire Safety Code 2011 but only “exit route”. I do not find it necessary to go into technicalities, as P’s own fire expert Mr Tsui has referred to the stairs/exit routes in the 3 buildings as “Fire Escape Routes”.

202.  There was also disagreement between the two Building Matters experts in relation to “ultimate place of safety”, but as stated earlier, both Mr Chain and Mr Kong agreed that this Court needs not decide on this issue.

203.  According to the approved general building plans (“GBP”), Kam Chung Building is an 18 storey commercial building with shops and restaurants on G/F to 1/F, commercial/offices on 2/F to 16/F, and a roof plant floor. There are 2 Fire Escape Routes respectively No 1 and No 2[105]. No 1 leads to Jaffe Road, and No 2 leads to the Lane. There is also a exit for Shop A, G/F, Kam Chung Building (“Exit A”). According to Mr Tsui, Exit A was not originally on the GBP for Shop A on G/F of Kam Chung Building, but had been altered to an exit door at the time when Shop A was changed to a bar as required by the food licencing authority during licencing[106]. This was later agreed by Ms Choi.

204.  David House is a 13 storey composite building with shops on G/F, F&B on 1/F to 2/F, and domestic units on 3/F to 12/F. There are 2 Fire Escape Routes respectively No 1 and No 2. No 2 leads to the Lane and No 1 leads direct to Fenwick Street[107].

205.  YF Life Tower is a 30 storey commercial building with shops on G/F, car parks on 1/F to 6/F, and offices on 7/F to 31/F ,the designation of 4^th, 14^th, & 24^th floors are omitted. There are 4 Fire Escape Routes respectively Nos 1 to 4 , No 3 & and No 4 lead onto the Shorter Part and the other No 1 & No 2 lead onto the Longer Part[108]. Mr Tsui had raised an issue with the Fire Exit Route No 1 which in fact leads to the main entrance lift lobby on G/F on Lockhart Road, as well as the Lane, and Mr Tsui opined that the main entrance should be an acceptable means of escape for the occupants in case of a fire. I agree that this would make sense.

206.  Mr Tsui pointed out that there are in fact only two exits located at and underneath the roofed area of the Store, namely Exit A for Kam Chung Building, and Fire Escape Route No 2 for David House. As mentioned earlier, the requirement of Exit A as a Fire Escape Route by the food licencing authority and was not required in the approved GBP on 6 March 1967. According to Mr Tsui, the other Fire Escape Routes in the 3 buildings are far away from the Store, and that flame, heat and smoke would not affect the evacuees to use those routes for evacuation from their buildings to the Lane. Further, Mr Tsui considered that it is realistic and practical to consider that only one building is on fire at any one time[109].

207.  Ms Choi had in her solo report referred to extracts on “Discharge Value and Width of Staircase” in the previous Means of Escape (MOE) Code 1996 and its Commentaries and also extracts from the Fire Safety (FS) Code 2011 and pointed out that the evacuation time from a storey to a protected staircase is 2.5 minutes for non-sprinklered building and 5 minutes for sprinklered building[110].

208.  Ms Choi had also used a computer software STEPs for evacuation analysis, and according to her, the use of STEPS is accepted by both the Buildings Department (“BD”) and the Fire Services Department (“FSD”) in Hong Kong for evacuation simulation analysis. Based on her analysis, the evacuation time from David House will be more than doubled from around 6 minutes 50 seconds to around 14minutes 50 seconds, with the presence of the Store, when the occupants of both Kam Chung Building and David House are required to evacuate simultaneously[111]. The extension of evacuation time of David House is due to the prolonged queueing at the staircase exit to the Lane and is caused by the Store reducing the passage way through the Land from 2400mm to 840mm. Ms Choi also used the Computational Fluid Dynamics (CFD) analysis to indicate that smoke and fire from the Store will affect both David House and Kam Chung Building, leading to simultaneous evacuation to both buildings.

209.  Ms Choi pointed out that the rear part of the Store is right adjacent to Fire Escape Route No 2 for David House and using the CFD analysis, if the fire occurs at the Store, occupants from David House requiring to discharge from that staircase would be completely blocked. CFD analysis indicated that smoke and fire from the Store would affect both David House and the Store leading to simultaneous evacuation of both buildings. Results however showed that occupants from YF Life Tower would choose the shortest evacuation route to Jaffe Road even under the worst case scenario of simultaneous evacuation of 3 buildings[112].

210.  On the other hand, Mr Tsui opined that the “Discharge Value” has no concern on the total evacuation time of the building, and that the only requirements in the Fire Safety Code are travel distance, number of exits and their dimensions and the number of staircases and their dimensions requirement, and this was because the evacuation time for different building height and occupants would have different times. Mr Tsui also considered that the use of STEPs for calculation of evacuation time was not suitable for the present case especially when the calculation was on the assumption that the occupants of all 3 buildings needed to evacuate at the same time, which was in his view quite abnormal.

211.  Ms Choi admitted her analysis was based on the “worst credible scenario”. Her analysis did not show the ceiling of the Store on the Lane, as she did not have the required data as to the material and structure of the same, and therefore she assumed the “worst credible scenario”, namely the ceiling would collapse immediately after a fire broke out. She had further explained that that the adoption of “worst credible scenario” is required by the relevant authorities as the topic is fire safety.

212.  On this, I agree with Ms Choi’s evidence that fire safety concerns human life and it is not unreasonable for her to adopt the “worst credible scenario”, even though it does not seem likely that all 3 buildings, ie Kam Chung Building, David House and YF Life Tower will be on fire or all the occupants in the 3 buildings will need to evacuate at the same time. I accept there is Fire Risk but I do not find the Fire Risk to be high.

213.  As submitted by Mr Chain, there is a legal distinction between nuisance and potential nuisance. As Lord Atkinson had said in Sedleigh – Denfield v O’Callaghan and others [1940] AC 880, at pg 896, “…so long as the offending condition is confined to the defendant’s own land without causing damage it is not a nuisance, though it may threaten to become a nuisance” and at p 915, Lord Potter had said : “…. a potential nuisance which became and actual nuisance when the floor occurred”. Further, Mr Chain submitted that the interference complained of must be substantial and that the risk must at least be objectively assessed and is real and imminent, referring to Fearn v Board of Trustees of the Tate Gallery [2023] 2 WLR 339 and London Borough of Islington v Elliott & Anor [2012] EWCA Civ 56[113].

214.  The interpretation of “fire hazard” is set out in section 2 of the Fire Services Ordinance, Cap 95. IO relies on the meanings set out in sections 2(e) and (f), which are:

“(e) inadequate means of egress from any premises in a building to street level outside the building or using such means of egress for a purpose which gives rise to any circumstance described in paragraph (f);

(Added 56 of 1969 s. 2. Amended 29 of 1975 s. 2)

(f) any other matter or circumstance which materially increases the likelihood of fire or other calamity or the danger to life or property that would result from the outbreak of fire or the occurrence of any other calamity, or which would materially hamper the Fire Services Department in the discharge of its duties in the event of fire or other calamity;

(Added 1 of 1964 s. 3)”

215.  Mr Tsui has pointed out in paragraph 3.1.2 of his solo report that the “means of egress” in section 2(e) refers to egress from any premises within a building to street level outside the building only, and further the Director of Fire Services has the power to require a person to abate a fire hazard pursuant to section 9 of Cap 95 for the breach of such an offence[114]. However, there was no sufficient evidence to show that the Director of Fire Services had ever exercised his powers under section 9 of the Fire Services Ordinance, Cap 95 against P.

216.  Further, as pointed out earlier, the fact is that between at least 1974 and until the commencement of this action, there had been no enforcement action taken by the Building Authority in relation to any UBWs and the BO was only issued in 2023 against which P has lodged an appeal. As said earlier, if the appeal is unsuccessful, all UBWs have to be removed. Further, P has undertaken to cease occupation of the Lane (apart from the sliding gate) and to remove all the cabinets etc on the side of David House before the end of September 2023 (“P’s Undertaking”).

217.  Having considered all the evidence, I am of the view that the Fire Risk although it exists, it is not high and in any event, it is only a potential nuisance. In light of P’s Undertaking, I am of the view that IO’s counterclaim against P on nuisance must fail.

J.  ISSUES 7 AND 9 - RELIEFS

218.  In light of P having succeeded in his claim of possessory title over the Relevant Part, P is entitled to judgment for possessory title as against all the owners as represented by the IO, and a declaration that all the owners’ titles were extinguished upon expiration of 20 years from about early 1974, namely by about early 1994.

219.  As for the non-agreed issue in relation to dimensions of the Relevant Part, it was pointed out by Mr Kong that Mr Chan, P’s expert on Land Boundary, accepted there were “curved” edges to the Store due to the metal sliding gate. During the trial, Mr Chan Tak Hing accepted the area of the Relevant Part in the earlier 2008 Survey Report was stated to be 9.56 sq m as that did not take into account curved edges and a small gap but he said the difference was at most about 1 sq m. There was a more recent plan of survey date of 7 October 2019 prepaid by Chynchen Associates Limited on which the alleged encroachment was stated to be 7.58 sq m[115]. However, no leave had been granted to adduce this report. Having considered all the evidence I accept the area to be about 8.26 sq m.

220.  As for IO’s counterclaim, in light of what has been said, such will be dismissed.

K.  ISSUES BETWEEN P AND MOs

K.1  The disputed issues

221.  The issues as between P and the MOs set out in the MOs’ Opening Submissions are:

(1)  Whether the issue between P and MOs should be stayed pending the determination in the LT Proceedings and if and when appropriate, the result of the auction if an order for sale is granted, as well as the joinder of all necessary parties for the determination of this issue;

(2)  In the alternative to (1) above, whether the Court should refuse to entertain P’s claim against the MOs, or alternatively adjourn the determination of such claim sine die with liberty to restore, without prejudice to P making such application to the Lands Tribunal to assert his right;

(3)  In the event Issues (1) and/or (2) above are ruled in the negative,

(i)  then if P succeeds in establishing a possessory title over the Relevant Part, whether the same is only an incumbrance for the purpose of Cap 545.

(ii)  whether an order for sale under Cap 545 has any effect on P’s possessory title , if established;

(4)  whether P has successfully extinguished the right of the IO to the Relevant Party by this action, and whether P’s possessory title, if established, would be subject to any incorporeal rights of the owners of the Lot (and/or to be exercised by the IO) and if so, what those rights are.

K.1.1.  Issues (1) and (2)

222.  As seen in the Joinder Decision, the Legal Issue (as defined) is whether P’s claim in this action, even if successful, is at most only an incumbrance. This is a distinct legal issue.

223.  It has been suggested by both the IO and the MOs at the joinder hearing that as the Legal Issue only arises if and when P succeeds in establishing his possessory title over the Relevant Portion and that if and when the MOs succeed in obtaining an order for sale in the LT Proceedings, and thus it is not necessary and pre-mature to determine the Legal Issue at the trial of this action.

224.  In short, it has been argued on behalf of the MOs at the Joinder Application that it is premature to consider the Legal Issue at the trial in this action. I have said in the Joinder Decision that to avoid multiple applications, and to secure the just resolution of all the disputes in accordance with the substantive rights of the parties, the Legal Issue should be canvassed at the trial in the event of P’s claim for possessory title is to succeed[116].

225.  It was submitted by Mr Chan SC at the trial on behalf of the MOs that they maintain the view that deliberating the Legal Issue now is unnecessary and premature. It was argued that for the debate on the Legal Issue, not only the minority owners should be joined but also the “future purchaser” in the event of an order for sale made in the LT Proceedings.

226.  As pointed out by Mr Chain, it is clear that the MOs’ position in the LT Proceedings is that a possessory title would be merely an incumbrance under Cap 545 and that they were going to make this submission to the Lands Tribunal in the LT Proceedings and the Lands Tribunal had already (without hearing P) expressed a preliminary view that it was so.

227.  It is common ground that as P has no undivided share in the Lot, he is not entitled to participate in the LT Proceedings. Mr Chain had submitted the reason why P had to make this claim in the High Court or in this action was because he had no right to be heard before the Lands Tribunal, at least not before an order for sale.

228.  The trial in the LT Proceedings was scheduled to commence in December 2023. Up to the date of the handing down of this judgment, no one had informed the Court of the outcome of the LT Proceedings.

229.  In any event, this Court had already decided in the Joinder Decision to grant leave for P to join the MOs as defendants in this action, and I maintain my views on the reasons set out therein. MOs were present throughout the present trial. There was no appeal from the Joinder Decision. I do not agree that P’s claim against the MOs or the Legal Issue is only a hypothetical question, which should be stayed or adjourned sine die with liberty to restore.

K.1.2.  The Legal Issue

230.  It is submitted on behalf of the MOs that a possessory title is, or is treated as an incumbrance under Cap 545

231.  Section 11 of Cap 545 provides for application of proceeds of sale for the lot the subject of an order for sale, and it is set out in section 11 (3) that without prejudice to the operation of subsection 11(3), an “incumbrance” in relation to a lot does not include, unless otherwise specified in directions, (a) any Chinese custom or customary right affecting the Land if Part II of the New Territories Ordinance, Cap 97, applies to the lot; (b) any easements, rights of way or rights of water; or (c) any covenants which run with the lot.

232.  As pointed out by Mr Chan SC, possessory title is not one of the above. Mr Chan also referred the Court to the Hansard[117] and submitted that all possessory titles acquired by adverse possessors would be treated as incumbrances, to be discharged using the proceeds of sale. In particular, Mr Chan referred to the following on pages 176-177 of the Official Record of Proceedings of Provisional Legislative Council on 7 April 1998:

“Third, the question arises as to how title disputes, such as those arising from adverse possession should be dealt with … after careful consideration together with the Bills Committee, we agree that provision should be made for the Lands Tribunal to direct the trustees appointed under an order for sale to set aside parts of the proceeds of sale in view of any pending action, or lis pendens, affecting the lot registered under the Land Registration Ordinance for payment to persons concerned upon the settlement of such disputes.”

233.  Mr Chan SC also referred to ss.4(6)(a)(i) & (iii)(A) of Cap 545 where the Lands Tribunal is given the task of settling the conditions of sale and to require the Trustees to discharge any lis pendens affecting the lot, in support of his submission that a possessory title, or is at least treated as, an incumbrance under Cap 545.

234.  It was submitted on behalf of the MOs that if P should obtain a declaration of possessory title to the Relevant Part, the declaratory judgment would be registrable under (“Cap 128”) and that the writ herein registrable under section 14 of Cap 128. This was mentioned during the direction hearing for the joinder and the writ had been registered thereafter.

235.  However, in the minutes or records of proceedings referred to by Mr Chan SC, “adverse possession” was only mentioned as an example of title disputes affecting the lot and how the proceeds of sale were to be dealt with when there was any pending action or lis pendens of such title disputes.

236.  Having read those minutes and records, I agree with Mr Chain that the references in the Hansard only indicated the discussions at that time were about how to treat “pending claims”, but this is different from where possessory title has been proved.

237.  There are in fact no provisions in Cap 545 as to how to treat a case where possessory title has been proved.

238.  It was submitted by Mr Chain that under English common law, in Hong Kong, a possessory title even though not a statutory assignment is in practical terms, subject to the government’s freehold title, the best title. The previous owner’s title being extinguished, the squatter’s title is “better” title than the whole world. There is no dispute to this.

239.  However, as there are no undivided shares to the Relevant Part, P does not fall within the definition of a “minority owner” under Cap 545 even if he is the owner of a possessory title. Under section 2 of Cap 545, “minority owner” in relation to a lot which is the subject of an application under section 3(1) is a person/persons who owns or own undivided shares in the lot otherwise than as a mortgagee.

240.  An application under section 3(1)(b) is only for an order to sell all the undivided shares in the lot. An “order for sale” is defined in section 2 to mean an order under section 4(1)(b)(i) of Cap 545, which is an order that all the undivided shares in the lot, the subject of the application, be sold for the purposes of the redevelopment of the lot. How to deal with the sale proceeds under section 11 should thus be read in connection with sections 3 and 4 and section 11 is only in relation to sale proceeds of undivided shares.

241.  As said earlier and set out in paragraph 5 of MOs’ Closing Submissions, it is not disputed by the IO and the MOs that the Relevant Part is a common part of Kam Chung Building and the Lot and that none of the common parts of and in the Lot are allocated any undivided share. The question is then how the Lands Tribunal is to deal with a part of a lot, not within the building, where no undivided shares have been allocated thereto. Although it is not really disputed that the Lands Tribunal has exclusive jurisdiction under Cap 545, there are no provisions in Cap 545, insofar as this Court can see or which have been referred to this Court, which concern the sale of a part of lot outside a building to which no undivided shares have been allotted.

242.  Having considered Cap 545, in my view, the Lands Tribunal has no power under Cap 545 to make an order for sale for a part of the lot outside a building which has not been allocated with any undivided shares. The answer to Issue (3) is thus, P’s possessory title over the Relevant Part is not only an incumbrance for the purpose of Cap 545, and in any event, any order for sale under Cap 545 has no effect on P’s possessory title over the Relevant Part.

K.1.3.  Incorporeal Rights

243.  Issue (4) as between P and the MOs has also been raised under Issue 5 between P and the IO.

244.  This issue was in fact proposed by the MOs. Mr Chan SC had in MOs’ Opening Submissions[118] referred to Reliefs (2) and (2A) of IO’s counterclaim.

245.  Although the IO has counterclaimed against P in their RRRRADC for various reliefs including an injunction (in Relief (2)) and reimbursement of expenses for demolition of the Structure and reinstatement of the building in compliance with the Building Order (in Relief (2A)[119], there were no submissions made in the IO’s Closing Submissions as to what incorporeal rights they or the owners of Kam Chung Building would have in the event P’s possessory title were established.

246.  As I have found that that P has acquired a possessory title of the Relevant Part by early 1994, the IO will not now be entitled to any injunction sought in Relief(2)(a). As for Reliefs 2(c) and 2(d), these are now subject to the BO against P and P’s appeal. For Relief 2(b), the electricity meter of the Store is in the Main Switch Room of the Kam Chung Building and is in the control of the IO and in my view the IO can have it removed anytime. No injunction is necessary. As for Relief (2A), as P was appealing against the BO, the outcome is unknown. It goes without saying that any removal of UBWs on the Relevant Part will be at P’s expense should he fail in his appeal. It is not necessary for the IO to seek those reliefs. P has acquired a possessory title of the Relevant Part latest by early 1994. The Deed of Mutual Covenant appears to bind only those owners with undivided shares only. However, normally, co-owners of land share the benefits, fruits, and liabilities of the land according to their respective shares of the area of the land, and it appears to the Court that P’s share would be the area of the Relevant Part, ie about 8.26 sq m over the entire area of the Lot.

L.  CONCLUSION

247.  In light of all said above, I make the following declarations/orders:

As against the IO:

(1)  A declaration that the registered owners of Kam Chung Building and the IO ceased to have any right of action to recover the Relevant Part since early 1994;

(2)  A declaration that the title of the registered owners of Kam Chung Building to the Relevant Part has been extinguished since early 1994.

(3)  A declaration that P has obtained a good possessory title to the Relevant Part since early 1994.

As against the MOs

(1)  A declaration that in the event an order for sale is made in the LT Proceedings, such order has no effect on P’s possessory title

248.  IO’s counterclaim against P is hereby dismissed. MOs’ counterclaim against P is also dismissed.

249.  P’s costs of his claim against the IO and IO’s counterclaim against P are to be paid by the IO, to be taxed on party and party basis, if not agreed.

250.  P’s costs of his claim against the MOs and MOs’ counterclaim against P are to be paid by the MOs jointly and/or severally, to be taxed on party and party basis, if not agreed.

251.  The costs orders are made on nisi basis, which shall be made final after 21 days.