SUPER ELECTRICAL CONTRACTING LTD v. ETEK CO LTD

HCMP 1060/2021

[2022] HKCFI 3374

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1060 OF 2021

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BETWEEN

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R E A S O N S    F O R    J U D G M E N T

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1.  By an Originating Summons of 27th July 2021 (“the Originating Summons”), the Plaintiff applied for (inter alia) a declaration that it has acquired possessory title to a part of the open space known as New Baker Court which together with the exterior walls above first floor ceiling level and all other portions of Fok Lin Building, 7-21 Baker Court, 44-50 Baker Street & 51-57 Winslow Street, Kowloon, not otherwise allocated and not designated for common use form 1/294 share in Section G of Hung Hom Inland Lot No.235 and Section M of Hung Hom Inland Lot No.235, the part being identified by means of green colouring on a plan attached to the Originating Summons (“the Area”) pursuant to s.7 of the Limitation Ordinance, Cap.347 (“LO”), and a declaration that the Defendant’s title to the Area has been extinguished pursuant to s.17 LO.

2.  At the hearing, I made an order in terms of the Originating Summons, as amended at the hearing, with no order as to costs. I now set out my reasons for so doing.

3.  I am satisfied that the Originating Summons has been served in accordance with the orders of Madam Recorder Rachel Lam SC dated 9th November 2021 and Ng J dated 15th June 2022.

4.  The Originating Summons was supported by the Affirmation of Ho Ming Kei filed on 27th July 2021. Mr Ho is a director of the Plaintiff. The Plaintiff’s evidence is unchallenged. In summary:

4.1 Fok Lin Building is a multi-storey development. The Defendant was the first registered owner of the open space of which the claimed Area forms part (“the Open Space”). Pursuant to the deed of mutual covenant in respect of the development, the Defendant had the exclusive right to hold, use, occupy and enjoy the Open Space, so that the Open Space has never been designated for common use.

4.2 The Plaintiff was incorporated in November 1989, with Mr Ho’s parents being the directors and shareholders. Mr Ho attended court to give supplemental evidence and he confirmed that there was no change in the identity of the directors and shareholders up until 2019, when Mr Ho’s father transferred his shares to Mr Ho, and Mr Ho was appointed as a director in place of his father.

4.3 By an assignment dated 28th October 1992, the Plaintiff became the registered owner of Shop No.6B on the ground floor of Fok Lin Building (“Shop 6B”). The Area is a small area at the rear of Shop 6B, and was part of a strip of open area dividing Fok Lin Building and the neighbouring buildings.

4.4 Not long after the Plaintiff acquired Shop No.6B, and in any case no later than the mid-1990s, the Plaintiff extended the shop to include the Area. The Plaintiff built a concrete ceiling and walls to enclose the Area and installed an iron gate with locks. Only Mr Ho’s family members and authorised employees had keys to the locks. The Plaintiff also built a toilet and installed electrical appliances such as fans inside the enclosed Area, and placed the Plaintiff’s items inside. It was the intention of the Plaintiff, through the family members, to occupy, possess, control and use the Area as its own. There was no consent from the Defendant.

4.5 The occupation of the Area was further evidenced by the fact that on 5th January 2007, the Building Authority issued a notice to the Plaintiff, warning that a structure at the rear lane of Shop 6B had been erected in contravention of the Buildings Ordinance. The structure was not identified in the notice. The Plaintiff says that it was the concrete ceiling covering the Area, and that this was then demolished. By a letter of 14th January 2016, the Building Authority noted that the unauthorised building works which had been the subject of the 2007 notice had been demolished or altered so that there was no longer any contravention, and the 2007 notice was withdrawn.

4.6 There have been periods from 2002 onwards during which Shop 6B has been let out.

5.  Section 7(2) LO provides that no action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him.

6.  Section 17 LO provides that subject to the provisions of section 10,[1] at the expiration of the period prescribed by the LO for any person to bring an action to recover land, the title of that person to the land shall be extinguished.

7.  I am satisfied that on the evidence before me, the Plaintiff has proved (1) the necessary degree of factual possession in the sense of physical control, in that it has been in continuous and exclusive possession of the Area, for no less than twelve years, and (2) its intention to possess in its own name and on its own behalf to exclude the world at large, including the paper owner. See Shine Empire Ltd v Incorporated Owners of San Po Kong Mansion [2006] 4 HKLRD 1 at [28]; Yeung, Abraham v Sun King Kai [2022] HKCFI 1239 at [50] to [55].

8.  The letting of the Area to tenants does not stop the running of a limitation period which started to run against the paper owner prior to letting: Kan Kam Cho v Kan Chiu Nam (2008) 11 HKCFAR 358 at [21].

9.  I was therefore satisfied that the Plaintiff had established its entitlement to the relief sought.