MEGA RICH LOGISTICS LTD v. TIN SHUI WAI GREENFIELD GARDEN CO LTD AND ANOTHER

HCA 2181/2018

[2019] HKCFI 3020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2181 OF 2018

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D E C I S I O N

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A. Introduction

1.  This is the hearing of the plaintiff’s application for summary judgment.  The plaintiff claims possession of a piece of land in the New Territories as the legal registered owner thereof.  The 1^st defendant (“the defendant”) claims that the plaintiff’s title has already been extinguished because it has been in adverse possession of the land since or before about 1999.  The question is whether the defendant has shown an arguable defence or triable issues on such ground.

B.  The plaintiff’s claim

2.  The plaintiff is the registered owner of a piece of agricultural land known as the Remaining Portion of Lot No 2482 in DD 129 situated at Sha Kong Wai, Yuen Long, New Territories (“the Land”).  The area of the Land is about 21,126.80 square feet.  The plaintiff became the legal registered owner of the Land by an assignment dated 10 January 2018.

3.  The plaintiff claims that, at all material times, the defendant is and was the occupier or tenant or user of the lot(s) of land known as The Remaining Portion of Section A of Lot No 2841 in DD 129, adjacent to and bordering on the north and eastern boundaries of the Land, and is and was operating the business of an outdoor barbecue and refreshment facility.

4.  On or about 8 May 2018 and thereafter, during site visits by the plaintiff’s representatives, it was discovered that the defendant or its agents had trespassed and entered on the Land, and used the same as a car-park or parking lot for vehicles, for the use of the defendant or its customers, etc, and had erected or maintained structures and trade fixtures on parts of the Land including (a) a fence or fences and/or railings and pickets and/or stakes along the southern border of the Land adjacent to a public road; (b) wooden pole(s) or post(s) with wires erected within the Land; (c) a structure or structures with cover(s) and kiosks at the north eastern section of the Land; (d) a number of wooden signboards erected and/or affixed on or attached to and within the north eastern section of the Land; and (e) visible markings and lines drawn on and over most parts of and within the Land to demarcate or allocate parking spaces for vehicles.

5.  By a notice in writing dated 28 May 2018, the plaintiff, through its agent, Hing Yip Advisory Limited (“Hing Yip”), asked the defendant to remove all structures, chattels, objects and things on the Land.  By letter dated 8 June 2018, the defendant, through solicitors, replied that it had been in sole and exclusive occupation of the Land for a sufficient long period of time without any interruption from the former registered owner of the Land and was entitled to adverse possession.  The plaintiff refuted such allegation.  The defendant failed and refused to vacate the Land notwithstanding the plaintiff’s repeated requests.

C.  The defendant’s defence and counterclaim

6.  In the Defence and Counterclaim, the defendant pleaded that, since or before 1999, it has been in sole and exclusive possession of a large area of land including the Land against the whole world at large without interference or objection from the then registered owner or any person whatsoever.  As the then legal owner of the Land had not taken any action to recover possession of the Land within the time limit prescribed by section 7 of the Limitation Ordinance (Cap 347) (“LO”), the then legal owner’s title has been extinguished by section 17 of the LO.  The defendant has, therefore, acquired a possessory title of the Land.

D.  The plaintiff’s summary judgment application

7.  The plaintiff seeks summary judgment for possession of the Land save and except those parts thereof located at the north or north-east of the Land marked pink hatched black on the plan attached to its summons dated 20 November 2018 together with other remedies.

8.  Mr Wong Wing Chung Patrick (“Mr Wong”), a director of the plaintiff, said that, before the plaintiff acquired the Land, it had appointed its estate agent, Hing Yip, to do site inspections.  Mr Choy Chin Wing Alan (“Mr Choy”) of Hing Yip stated that he paid two visits to the Land on 23 September 2017 and 30 December 2017 respectively, and was able to obtain unimpeded vehicular access to the Land through an entrance or opening at the south-eastern border of the Land which led to a public road.  Mr Choy noticed that there were some small structures encroaching on the north eastern part of the Land and there were a number of vehicles randomly parked in the interior of the Land.  He observed that there were various structures or fixtures on the Land as described in the Statement of Claim.  He noted that there were several adjoining land lots on three sides of the Land ie the east, the north and the west, which appeared to be occupied by or under the control of an entity by the name of “綠田園燒烤樂園”, and there was a large signboard with those Chinese characters erected near the northern border of the Land.  He stayed there for around 15 – 20 minutes on each occasion without any interruption from anyone.  Upon enquiries, he learnt that the signboard belonged to the defendant which was carrying on business as a refreshment and barbeque outlet with recreational facilities and playgrounds at the adjoining lots; and the defendant was making use of the open ground of the Land for parking of vehicles of the defendant and its customers.

9.  Mr Wong also said that, after the plaintiff acquired the Land, in mid-January 2018, the plaintiff appointed a firm of surveyors ie T H & Associates Limited (“the Surveyors”) to carry out a boundary survey of the Land.  On 23 January 2018, a survey team of the Surveyors visited the Land and gained vehicular access to the Land from the said public road through the said entrance at the south-eastern border of the Land without any difficulty.  However, on 3 February 2018 and 13 February 2018, a survey team of the Surveyors, after entering the Land in the same way, were later stopped and driven away by some unknown persons.  On 15 May 2018, Mr Choy and a survey team of the Surveyors visited the Land again.  After entering the Land in the same way, they were again confronted by some unknown persons as a result of which a report to the police was made.

10.  The Surveyors compiled an expert survey report on changes of grounds features and occupation on the Land dated 12 November 2018 (“the Report”).  They had studied, inter alia, the lot index plan, aerial photos and survey sheets in relation to the Land.  The Report indicates that the Land is of an irregular pear shape and is bounded by Lot No 2846 at its west border, by Lot Nos 2843 and 2836 at its north border, and by Lot No 2841 S.B RP and Lot No 2841 S.A RP at its eastern border.  The south-eastern boundary fronts onto the adjacent Government land where there is a public road; and there is an open space giving access to the interior of the Land via that road.  There are small structures and some circular objects encroaching on the northern part of the Land covering spaces of about 173 m² as at 3 January 2018.  The Surveyors concluded that, in general, the Land was used and occupied as a pond before 1998.  Since 2000, the Land was earth-filled and became an open ground.  The Land was found encroached by some structures at its northern section since 19 November 2009 and the encroached area was enlarged with the construction of additional structures along its northern perimeter since 2008.  The aerial photo taken on 20 December 2005 shows markings of car parking spaces.  But no such markings could be found in 2006.  The aerial photos show that the markings of car parking spaces appeared again in 2010 and 2012 and the car parking spaces were well occupied in 2014.  A fence was found at the eastern perimeter of the Land adjacent to Lot No 2841 S.B RP since 2006.  A gate was shown on the survey sheet since 2006 but could not be identified in the aerial photos.

11.  Mr Kwong Cherk Wing (“Mr Kwong”), a director of the defendant, said that, since 1980s, most of the agricultural lands and fish ponds in various sections of DD No 129, including the Land, with a total area of about 39,417.80 m² had been abandoned.  They became dumping areas of construction waste and debris by construction contractors.  Hence, the defendant developed the Lands into a “Green Field Garden” since 1997 and started operation in about late 1998.  It conserved the rural character at large and created countryside recreation/leisure pursuits to local population, outsiders and tourists.  It became a viable concept welcome by the schools and general public in the vicinity.  It instructed its consultant, Planning Team HK Ltd, to submit an application in February 1999 under section 16 of the Town Planning Ordinance for approval to develop the lands as “Green Field Garden” (“the 1999 Application”).  The Town Planning Board issued a letter dated 28 May 1999 approving the application with conditions.  The defendant has been using the lands (including the Land) as “Green Field Garden” since then.  The Government later resumed portions of the lands for construction of a public road; as a result, the original Lot No 2482 became the Remaining Portion of Lot No 2482.  The defendant started to rent some of the lands in DD 129 but did not rent Lot No 2842 in DD 129 or any part thereof including the Land because the then owner could not be located.  Since early 1999, it started to occupy the Land after removing construction wastes and debris.  The boundary of Lot No 2842 in DD 129 has been surrounded and enclosed by its rented lands at Lot Nos 2843 and 2845 (at its north west), 2836 and 2839 (at its north), 2841 (at its north east) in DD 129 and some slopes at its east, south and south sides.  Lot No 2846 in DD 129 have been covered by lots of trees (grown by the defendant) which enclose the south and south west of Lot No 2842 in DD 129.  After Government resumption of portion of Lot No 2482 in DD 129, the Land has continued to be so enclosed with substantial parts of the slopes being constructed as a public road and ancillary parts and drainage.  The defendant has been using the Land as a car park.  It paved the land surface with platinum oil to make it suitable as a car parking lot; and it received parking fees from its customers who visited “Green Field Garden”.  It recruited caretakers to manage and arrange parking of vehicles, and evicted people and vehicles who did not pay fees for parking their vehicles there.  No one can enter or stay at the Land without the approval or permission of the defendant.  At a certain stage, it erected fences at the outer boundary of the Land to exclude others from entering.

12.  Mr Wong pointed out that Mr Kwong was only appointed as a director of the defendant on 20 May 2013; and hence, most of his evidence was hearsay.  The Surveyors were asked to prepare Supplementary Notes.  According to the 1999 Application, the intention of the defendant was to retain the fish pond on the Land.  In fact, the filling of the pond at the Land started after 25 October 1997 and before 10 July 1998, and had been continuing up to 24 November 1999 when the pond was nearly filled up and it was totally reclaimed on or before 1 June 2000.  There was no evidence that the defendant had complied with the conditions imposed by the Town Planning Board.  There was also no evidence of continuous use of the Land for car-parking until about 2010.

13.  Mr Kwong filed a supplemental affirmation dated 29 November 2019 without leave.  At the hearing, Mr Lau, acting for the defendant, confirmed that the defendant would not rely on it.

E.  Analysis

14.  The principles for Order 14 applications are well established.  As the Court of Appeal reaffirmed in Paul Y Management Ltd v Eternal Unity Development Ltd & others CACV 16/2008 (12 August 2008, unreported), §19, the test is whether the defendant has raised credible triable issues; if there are, the matter should go to trial; if not, judgment should be entered against the defendant; the court will of course not take the alleged defence on its face value but test it against the evidence; but what the court should not do is to conduct a mini-trial on complicated factual issues.  It must be borne in mind that Order 14 is for clear cases only: that is, cases in which there is no serious material factual dispute and, if a legal issue, then no more than a crisp legal question as well decided summarily as otherwise (Hong Kong Civil Procedure 2020, vol 1, §14/4/9 at p 316).

15.  The legal principles concerning adverse possession are also not in dispute.  A person claiming to be in adverse possession must be shown to have both factual possession and the requisite intention to possess (Wong Tak Yue v Kung Kwok Wai & another (No 2) (1997–98) 1 HKCFAR 55 at 68E).

16.  Having considered all the evidence and counsel’s submissions, I have come to the conclusion that this is not a suitable case for summary judgment.  As the case will go to trial, I shall only explain briefly my conclusion.  None of what I will say below constitutes any “finding”, or even a provisional view of the merits of any particular point.

17.  To begin with, the plaintiff accepts that there is a triable issue in relation to a part at the north-eastern section of the Land.  In practice, a trial seems inevitable.  More importantly, the existence of some structures on that part of the Land seems to be consistent with the defendant’s case as to how different parts of the Land have been used for different purposes for the operation of “Green Field Garden” as a whole.

18.  The 1999 Application is a contemporaneous document.  The application site was shown in the site plan in figure 3.1, which covered the Land.  Further, in §3.3.1, it was stated that the application site comprised 53 pieces of land lots in DD 129; and in Table 3.1, Lot No 2842 with an area of 3156.66 m² was included.  At that time, the Government had not yet resumed a part of Lot No 2842.  In §2.2.1, it was stated that the proposal to develop a “Green Field Garden” at the application site was initiated in early 1997 and eventually started operation until late 1998.  As explained in §2.3.1, the defendant only realized that planning permission was required when it received enforcement notice in September 1998 during renovation of the then existing squatter buildings and implementation of the scheme.  In §3.2.1, it was stated that, by then, a “Green Field Garden” had in principle already been materialized on the application site: much of the land were allocated for agricultural use as green fields, horticulture and sculpture garden; a variety of countryside recreation facilities were provided such as picnic area, BBQ area and green gardens.  In §3.2.2, it was further stated that much effort had been devoted to retain the existing fish ponds for appropriate use like Japanese fish pond, lily pond and tortoise pond though a portion of the southeastern fish pond gazetted for Government resumption had been filled.  In §5.1.1, it was repeated that the planning application was unique in the sense that the major part of the proposal had already been materialized as the then existing “Green Field Garden” had been operated since December 1998.  In short, there were suggestions in the 1999 Application that the defendant was already using and controlling the Land at that time; and that it intended to continue to do so.

19.  As a condition of the approval granted by the Town Planning Board, the defendant was required to submit and implement the layout of the car park as described in the 1999 Application within nine months to the satisfaction of the Commissioner for Transport or the Town Planning Board. It also appears that the Land was intended to remain as a pond under the 1999 Application.  I agree that the Report and the Supplementary Notes of the Surveyors raise serious questions as to whether the defendant had compiled with the said condition, or implemented its intention on how to use the Land.

20.  As to how the Land had actually been used over the years, the plaintiff relied mainly on the Report and Supplementary Notes of the Surveyors including the primary materials that they had considered.  I do not accept the submission of Mr Lau, acting for the defendant, that they are inadmissible expert evidence as no leave had been given to adduce such evidence in accordance with Order 38, rule 36, Rules of the High Court (Cap 4A) (“RHC”).  As explained in Hong Kong Civil Procedure 2010, vol 1, §38/36/1 at p 916:

“ This rule does not apply to expert evidence which is permitted to be given by affidavit (r.36, para.(2)). The obvious reason is that the filing of an affidavit and its service on the other parties is as effective a means of securing the disclosure of expert evidence as is provided by Part IV of this Order; and moreover, it would be highly impracticable to apply the provisions of this Part of the Order to proceedings, such as interlocutory proceedings in which evidence is normally given by affidavit.”

21.  According to the Surveyors, the Land, which used to be a pond, was gradually filled up from late 1997 till late 1999 when it was nearly filled up, and it was totally reclaimed before 1 June 2000.  One may ask whether such land filling works were carried out by the defendant and if so, for what purpose.  And after it had become an open field, between around 2000 and 2004, although the aerial photos did not show any marking of car parking space, I do not think one can infer conclusively that the Land was not in fact used for car parking as alleged by the defendant during that period. The aerial photos, taken at high altitudes, may not show all the features on the ground.  And even if there was no marking on the ground, it does not necessarily follow that the Land was not actually used for car-parking. And even if the Land was simply left vacant as an open field after the land-filling, one would still need to consider whether the defendant was in actual occupation of the Land by, for example, controlling access thereto.

22.  Most importantly, the aerial photo shows car park markings as well as parking vehicle on 20 December 2005. Even if adverse possession only started on that day, as the writ was issued on 18 September 2018 which was more than 12 years after that, the defendant’s claim would still succeed.  I am aware that the defendant has not pleaded any alternative case.  However, the defence might be amended, and it will be open to the court to make such a finding at trial.  I note that, according to the aerial photos, the car park markings disappeared between 2006 and 2009; and they only reappeared in 2010.  But whether the Land has continuously been used as a car park is a matter that cannot be decided solely by reference to the aerial photos.

23.  All in all, I take the view that there is sufficient evidence supporting a triable issue as to whether the defendant had continuous and exclusive use and control of the Land not later than 1999 by, inter alia, first converting the pond into an open field, and then using it as a car park for itself, its agents or customers.  Whether doing all these things, in particular, using the Land for car parking is sufficient to constitute factual possession must depend on the circumstances on each case, and cannot be decided summarily.  For instance, the court may need to consider to what extent the defendant had control over access to the Land; and how effective such control was.  It appears that the Land was surrounded by other lands under the defendant’s occupation or some natural barriers.  In late 2006, a gate at the entrance from the public road on the south-eastern side of the Land was observed.  And by late 2017, it is clear that the entrance at the south- eastern part of the Land was the only access to the Land.  It may also be appropriate to consider the inherent probability that car parking facilities might be required due to the absence or lack of public transportation and the remote location of the Land.  To what extent the defendant has been in possession of the Land (whether wholly or only a part thereof, and if so, which part), if any, is a matter that requires further investigations.

24.  It is correct that the defendant had paid rents to the legal owners of some adjoining lands.  Obviously, it cannot claim adverse possession of those lands.  However, in respect of the Land, the defendant said that it could not locate the registered owner.  There is no evidence that it had paid any rent or offered to pay any rent to anyone in respect of the Land. The evidence, as it stands, seems to be different from that in Wong Tak Yue v Kung Kwok Wai & another (No 2) (1997–98) 1 HKCFAR 55 where the occupier gave affirmation evidence that, since the expiry of a tenancy, his intention had been that he was willing to pay rent to the owners if they had requested payment and that he was ready and able to do so.  The Court of Final Appeal held that such evidence was inconsistent with the intention to possess.

25.  I believe I have said enough to explain why I have concluded that the defence of adverse possession is arguable, and gives rise to triable issues.

F.  Conclusion and order

26.  For the above reasons, I shall give unconditional leave to defend to the defendant.

27.  As to costs, I agree that the Defence and Counterclaim filed by the defendant is lacking in particulars.  It was not unreasonable for the plaintiff to take out the summary judgment application.  And, hence, I have not dismissed the plaintiff’s summons pursuant to Order 14, rule 7(1), RHC.  This case is similar to a case where a defendant has not filed any defence, and only showed an arguable defence or triable issues after an Order 14 application has been taken out. In the circumstances, I take the view that the appropriate order is costs in the cause.

28.  As I have given leave to defend, I should give further directions pursuant to Order 14, rule 6(1). It appears that the defendant might wish to amend its Defence and Counterclaim, and the parties would probably need to seek directions on expert evidence.  To ensure that all procedural matters (including amendment of pleadings, discovery, exchange of witness statements and directions for expert evidence) may be dealt with in one go, I direct that the plaintiff shall take out a case management summons returnable before a Master within 14 days hereof.  The parties may, of course, agree on further directions for the trial by a consent summons subject to approval by the court.  I understand that the plaintiff has not yet filed any Reply and Defence to Counterclaim.  In view of the real possibility that the defendant may apply to amend its Defence and Counterclaim, to save costs, I also direct that the plaintiff needs not file any Reply and Defence to Counterclaim pending the disposal of the case management summons to be taken out or further order.