CHAN CHI MING AND OTHERS v. CHEN CHIH CHIANG, in his personal capacity and in his capacity as the executor of the estate of WANG MU TAN, deceased

HCMP 359/2024

[2025] HKCFI 182

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 359 OF 2024

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BETWEEN

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JUDGMENT

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Introduction

1.  Ps took out the Originating Summons (“the Originating Summons”) and the summons for interlocutory relief against D (“the Summons”) at the same time on 1 March 2024.

2.  Ps and D are brothers and their disputes are centered on a piece of land known as The Remaining Portion of Lot No. 336 in Demarcation District No. 109 (“the Lot”) now occupied by D. Ps now complain about certain illegal structures erected on the Lot.

3.  This is the substantive hearing for both the Originating Summons and the Summons. The determination of the Originating Summons will dispose of the Summons entirely and, thus, I shall focus on the Originating Summons only.

4.  Ms Kung appears for Ps whereas D acts in person throughout. Shortly before the hearing, this court received a Memorandum of Notification of an Application for Legal Aid dated 29 July 2024 relating to D's application for legal aid.

5.  By reason of D’s application, there was a statutory stay of the proceedings pursuant to section 15(4) of the Legal Aid Ordinance. Cap. 91.

6.  This court decided to lift the stay and proceeded to hear the parties’ submissions on the Originating Summons with reasons for the decision to be given in this Judgment.

7.  This was the second time that D applied for legal aid. He made his first application on 12 March 2024 and by a Memorandum of Notification that a Party Has Been Refused Legal Aid dated 14 June 2024, the Legal Aid Department informed this court of their refusal of D’s application.

8.  There is no reason why D made his second application in the eleventh hour when he knew very well the Originating Summons would be heard and determined soon. I was of the view that his second application was just a delaying tactic. Indeed D had repeatedly asked for adjournments. Though I was aware that the statutory stay should not be lightly lifted, I was not convinced about the genuineness of D’s second application and I concluded that the substantive hearing should not be adjourned in the absence of exceptional circumstances.

9.  For completeness, by another Memorandum of Notification that a Party Has Been Refused Legal Aid dated 10 September 2024, this court was informed of the refusal of D’s second application.

Undisputed factual background

10.  There is no significant factual disputes in this matter. I believe I can largely adopt the narrative of the background facts of Ms Kung in her skeleton submissions. They are mostly evidenced by uncontroversial documentary evidence

11.  The parties are the 5 sons of one late Mr Chen Chun Chao (“the Father”) and one late Madam Wang Mu Tan (“the Mother”). D is their second son. Mr Chan Chi Chung (“Chung”) is their third son and not a party to these proceedings.

12.  The Lot formed part of the land purchased by the Father, the Mother, P1, Chung and D on 6 February 1985 then known as Lot No. 336 in Demarcation District No. 109 (“the Land”). They were tenants in common. The Father owned 4/8 whereas each of the Mother, P1, Chung and D owned 1/8.

13.  The Father passed away intestate in 1988. After his death, his 4/8 share in the Land was assigned to his 6 sons to hold as joint tenants. In around 1999, the Government resumed part of the Land with compensation paid to its co-owners. The Land was renamed as the Lot.

14.  The District Lands Office Yuen Long (“the DLO”) sent a warning letter to Ps and D as administrator of the estate of the Mother dated 20 January 2006 (“the 2006 Letter”). The DLO complained about the illegal structures on the Lot and demanded their removal and demolition within 28 days from the date of the 2006 Letter. The DLO threatened enforcement action by way of re-entry of the Lot in case of non-compliance.

15.  Neither Ps nor D complied with the demand in the 2006 Letter. The DLO sent another warning letter to them dated 13 September 2017 (“the 2017 Letter”). The parties were demanded to remove or demolish all the illegal structures on the Lot on or before 12 October 2017.

16.  By the registration of an instrument of Re-Entry dated 14 September 2022 (“the Instrument of Re-Entry”) in the Land Registry, the Government was deemed to have re-entered the Lot for breach of the covenant restricting erection or construction of any building or structure of any description on the Lot or any part thereof without first having obtained the approval of the Government as contained in the Block Government Lease (formerly known as Block Crown Lease) governing the Lot (“the Re-entry”).

17.  Prior to the Re-entry, D had disposed of his interest in the Lot. By the First Charge dated 15 January 2008, D charged his 5/24 interest in the Lot to one Mr Tang Chung Pong (“Mr Tang”). By an assignment dated 27 December 2012, Mr Tang exercised the power of sale under the First Charge and assigned D’s 5/24 share of the Lot to one Chin Kit Yee Louisa (“Madam Chin”). Madam Chin retained the said share before the Re-entry.

18.  On the other hand, D is the sole executor and beneficiary under the will of the Mother dated 23 December 2002. The Mother passed away in 2008 and until the Re-entry, the estate of the Mother continued to hold interest in the Lot.

19.  D only obtained the grant of probate of the estate of the Mother in 2023. Notwithstanding the Re-entry, in HCA 1820/2020, D sought to justify his occupation of the Lot and entitlement to reside at the illegal structures erected on the Lot.

Ps’ case

20.  Ps are now seeking to compel D to remove and demolish the illegal structures on the Lot. They complain that D has committed the tort of causing loss by unlawful means.

21.  Their case is that they had completely demolished all their illegal structures on the Lot pursuant to the 2017 Letter before the Re-entry. The Re-entry was solely caused by D’s illegal structures which he had all along refused to demolish despite repeated demands. Such illegal structures include a metal hut (“the Hut”) which is the residence of D’s family.

22.  After the Re-entry, on 3 October 2023, Ps made an application for relief against re-entry to the Lands Department purportedly pursuant to section 8 of the Government Rights (Re-entry and Vesting Remedies) Ordinance, Cap.126 (“the Ordinance”). In reply, the DLO made it clear in their letters dated 16 October 2023 (“the October Letter”) and 11 December 2023 (“the December Letter”) that one of the basic requirements for relief against the Re-entry is the demolition of all the illegal structures on the Lot.

23.  Hence, Ps complain that D’s refusal to demolish his illegal structures unlawfully erected on the Lot has caused them loss in that in the first place it prompted the Government to re-enter the Lot and then they would be denied any relief against the Re-entry and stand to lose their interest in the Lot for good.

24.  Despite the directions given by Hon K Yeung J dated 8 March 2024, D did not file any evidence in opposition.

25.  At the hearing, this court asked the parties to file expert evidence to identify all the illegal structures on the Lot and lodge submissions thereon if so advised. Whilst Ps filed a surveyor’s report (“the Surveyor Report”) compiled by Mr Tong Yuen Ming Miller of GBE Consultancy on 30 August 2024, D did not file any expert evidence. D, however, filed a submissions dated 27 September 2024 raising a number of irrelevant issues and giving an account of his personal history including his contribution to his family. He asked this court to allow him to stay at the Lot until the Government pays him reasonable compensation.

Applicable legal principles

26.  The tort of causing loss by unlawful means was authoritatively explained by the House of Lords in OBG Ltd v Allan [2008] 1 A.C. 1. Coleman J in China Concrete Company Ltd v Secretary For Justice [2023] HKCFI 2282, at §91, referred to OBG and set out the four essential elements of this tort:

(1) A uses unlawful means against the third party;

(2) which interfere with that third party’s freedom to deal with B;

(3) with an intention to cause loss to B and

(4) actually causing damages to B.

See also Bullen & Leake & Jacob’s Precedents of Pleadings (19^th ed) at §60-08, Mammy Pancake Company Limited v Carla Day Limited [2024] 3 HKLRD 17 at §§44-46; Cheng Wai Fun v Wong Yuk Ling [2023] HKDC 171 at §50(2).

27.  Ms Kung relies on the following passages in Mammy Pancake per Fung J,

“45. In the unlawful means tort, there must be an intention to cause loss. It has been held by the House of Lords in OBG Ltd v Allan [2007] UKHL 21; [2008] 1 AC 1 per Lord Nicholls at [167] and Lord Hoffmann at [134] where a defendant seeks to advance his own business by pursuing a course of conduct which he knows will, in the very nature of things, necessarily be injurious to the claimant. If the defendant goes ahead in such a case in order to obtain the gain he seeks, his state of mind will satisfy the mental ingredient of the unlawful interference tort (Clerk & Lindsell, [23-83]).

46. Unlawful means have been given a “wider interpretation” of “all acts a defendant is not permitted to do, whether by the civil law or criminal law” by Lord Reid and Lord Devlin in Rookes v Barnard [1964] UKHL 1; [1964] AC 1129 at [162] and [159] respectively, and endorsed by Lord Nicholls in the majority view in OBG Ltd v Allan (see Clerk & Lindsell, [23-85]).”

28.  Lord Hoffman in the OMG Ltd case at §51 explained the element of unlawful means in the following terms,

“Unlawful means therefore consists of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant. It does not in my opinion include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant.”

Discussion

29.  Ps’ evidence is not contradicted. I have no reason not to accept it in its entirety when it is largely supported by contemporaneous documents. Despite the submissions of D, I am satisfied that on Ps’ evidence, the case against D is amply borne out.

30.  D never denies that he is now occupying the structures including the Hut on the Lot as his residence. The Surveyor Report clearly confirms the existence of illegal structures on the Lot, which include the following:

(1) Suspended platform with brick wall underneath it;

(2) One circular shape equipment structure;

(3) Two single-storey structures; and

(4) A two-storey structure, with steel supported platform and brick wall enclosure underneath it.

31.  Mr Tong opines that those are illegal structures within the meaning of section 12 of the Land (Miscellaneous Provisions) Ordinance, Cap. 28.

32.  Mr Tong further points out that the “TS” marked on the plan attaching to the October Letter (“the Plan”) and the illegal structures identified by him are not authorized structures and/or registered squatter structures referred to in the letter of DLO dated 19 July 2022.

33.  Nothing submitted by D could cast doubt on the expert evidence of Mr Tong or alter the nature of the structures which he insists on keeping at the Lot.

34.  His purchase of the Land a few decades ago and the Mother’s interest in the Lot are irrelevant. The Re-entry was caused by the existence of the illegal structures as shown by the Instrument of Re-Entry and had nothing to do with the interest in the Lot. Pursuant to section 4(1) of the Ordinance, the Government was entitled to exercise the right of re-entry for breach of covenants in the Block Government Lease.

35.  Now I turn to the four elements of the economic tort of causing loss with illegal means.

36.  First, the erection and the continued existence of D’s illegal structures on the Lot are undoubtedly in breach of the Block Government Lease. D’s refusal to demolish such illegal structures amounting to continuation of the breach. The Government has the right and indeed the duty to enforce the Block Government Lease against D.

37.  D has committed a civil wrong, to say the least against the Government.

38.  By reason of the breach, the freedom of the Government in dealing with Ps has been interfered with. After the expiry of the deadline set in the 2017 Letter, due to the refusal to remove the illegal structures by the deadline, the Government could only exercise its right under the Ordinance though Ps were innocent having removed all their illegal structures already. The Government was not free to make any other decisions. D has not suggested any other course the Government could have taken.

39.  After the Re-entry, when Ps asked the Government for relief, the Government could not accept their request by reason of the continued existence of the illegal structures on the Lot. The Government was not free to make any decision on the request of Ps. It re-entered the Lot because of the breach of D to enforce the Block Government Lease and it would be absurd if the Government agrees to withdraw their enforcement action when the breach is continuing without abatement.

40.  Therefore, the first two elements are present. D has committed an actionable civil wrong against the Government on account of his breach of the Block Government Lease. Given D’s illegal means, the Government could only deal with Ps in a certain manner, i.e. exercising its right under the Ordinance to re-enter the Lot and refusing Ps any relief against Re-entry. The illegal means have interfered the Government’s dealing with Ps. The first two elements are present.

41.  D has evinced an intention to cause Ps loss by this illegal means. He keeps the illegal structures as his residence for his own benefit. He must be aware that his illegal structures caused the Re-entry and now render it impossible for the Government to retract the Re-entry to give relief to Ps.

42.  As pointed out by the October and December Letters, the DLO requires Ps and D to remove all the illegal structures on the Lot for their application for relief under section 8 of the Ordinance. The DLO referred to a recent inspection of the Lot and observed that there were still illegal structures remaining on the Lot. The Plan annexed to the October Letter shows where such illegal structures could be found and it is annexed to the Originating Summons.

43.  By a letter dated 31 January 2024, Ps’ solicitors provided D with all the background information and demanded D to demolish and remove the illegal structures on the Lot. The October and December Letters were enclosed therewith. D did not reply to this letter. Nor did he comply with the demand.

44.  D’s continuing breach of the Block Government Lease with the illegal structures on the Lot therefore affects the DLO’s consideration of the application of Ps for relief against the Re-entry. D must know that Ps will be bound to suffer loss if the DLO refuses to consider let alone agreeing to P’s application.

45.  I note that an application for relief under section 8 of the Ordinance should in fact be made to the court and not to the Government or the DLO (or by petition to the Chief Executive of HKSAR). I do not think that this would materially affect Ps’ case. If the DLO agrees to retract the Re-entry in the wake of the removal of the illegal structures at the Lot probably by the de-registration of the Instrument of Re-entry, there is no need for Ps to make the intended application for relief to the court. Alternatively, with the agreement of the Government, their intended application would be unopposed and likely to be successful.

46.  As it now stands, Ps has suffered actual loss arising from the existence of D’s illegal structures. The Re-entry has already deprived them of their interest in the Lot and D’s persistent refusal to demolish the illegal structures is depriving them of the chance of recovery of their interest in the Lot.

47.  I am driven to the conclusion that Ps have proved the existence of the third and fourth elements of the tort.

Conclusion and orders

48.  In the premises, I conclude that Ps have proved their case against D and are entitled to the relief claimed in the Originating Summons.

49.  I make no order on the Summons.

50.  I have perused the draft order prepared by Ms Kung in her Supplemental Skeleton Submissions. I shall order:

(1) D do, at his own costs and expenses, take all reasonable steps and actions to commence and carry out all necessary works to demolish all the illegal structures situated on the Lot at the portion coloured pink on the plan annexed to the Originating Summons and identified in §4.2 of the Surveyor Report (“Illegal Structures”), on or before 24 January 2025;

(2) The demolition of the Illegal Structures commenced pursuant to paragraph 50(1) hereinabove shall be completed on or before 28 March 2025;

(3) If D fails to comply with paragraphs 50(1) and/or 50(2) above, Ps be at liberty to make arrangements for the demolition of the Illegal Structures, and D shall indemnify Ps for all costs incurred for the demolition of the Illegal Structures;

(4) D be restrained from erecting any other fixed or temporary structures on the Lot not for the purpose of the demolition of the Illegal Structures without the authorisation of the Government in the meantime; and

(5) Liberty to apply.

51.  I should make it clear that the foregoing orders are made against D in his personal capacity only. As observed above, the continuing breach of the Blocked Government Lease by the existence of the Illegal Structures actually had little to do with any proprietary interest in the Lot. There is no allegation that the Illegal Structures belonged to or constructed by the Mother.

52.  Costs should follow the event. There is no justification for any departure from the general principle. I make an order nisi that the costs of and occasioned by the Originating Summons including the Summons be paid by D in his personal capacity to Ps, to be taxed if not agreed.

53.  Ms Kung asked for summary assessment of costs on an indemnity basis. I am not satisfied that there are sufficient reasons to justify indemnity costs. I also refuse to carry out summary assessment.

54.  If necessary, this court can arrange a court interpreter to have the Judgment be interpreted to D on request.

55.  Lastly, I thank Ms Kung for her helpful assistance.