XCHRX SHING SHU CHIU and Others v. KAN CHOI MING and Another

1997, No.A755

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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1. This is an appeal from the Order of Master Chung on 3 December 1997 whereby the Plaintiffs obtained summary judgment against the 1st and 2nd Defendants for trespass to the Plaintiffs' land ("the property") with damages and mesne profits to be assessed. The aforesaid Order was made pursuant to O.27, r.3 on the basis of admissions of the Defendants that they had trespassed onto the Plaintiffs' land.

2. In or about June 1995, the 1st Plaintiff discovered that dumping of rubbish such as top soil had occurred on their property. On or about 30 June 1995, the 1st Plaintiff's sister ("Ms Shing") contacted the 1st Defendant Mr Kan by telephone. He agreed to reinstate the land by the end of July 1995. However, he failed to do so by that date. The 1st Plaintiff's another sister then wrote to him on 15 August 1995 enquiring whether he could reinstate the land by the end of August.

3. By letter of reply dated 25 August 1995, the 2nd Defendant replied and expressed regret that they had not removed the soil and had caused inconvenience to the Plaintiffs. It was further said that the 2nd Defendant would agree to reinstate the land once permission from the Planning Department was obtained.

4. The matter was not resolved in spite of several telephone calls from Ms Shing to Mr Kan on divers occasions. Eventually in or about September 1995, according to Mr Kan it was orally agreed over the phone between Ms Shing on behalf of the Plaintiffs and Mr Kan on his own behalf and on behalf of the 2nd Defendant, that the Plaintiffs on one part and the 1st and 2nd Defendants on the other part shall settle the dispute in the following manner :

a) The 1st and 2nd Defendants or anyone of them shall take a lease of the property from the Plaintiffs and the Plaintiffs shall abandon their rights of legal action against them for the said dispute.

b) The lease shall be for a term of three years commencing on 1 July 1995 with an option to renew for a further term of two years upon expiry of the said term.

c) The monthly rent shall be $15,000 for the first year with an increment of 5% per year for the second and third years and thereafter if the option to renew is exercised the annual increment shall be 10%.

d) A rental deposit of $30,000 shall be paid to the Plaintiffs on or before the signing of the lease.

e) The parties concerned shall reduce the above terms of the lease to writing within a reasonable time.

5. The Defendants referred to the aforesaid agreement as "the Settlement Agreement".

6. A cheque dated 29 December 1995 in the sum of $120,000 ("the first cheque") was received from Mr Kan for the aforesaid deposit of $30,000 and six months' rental of $90,000. A Tenancy Agreement executed by Mr Kan was also delivered by the Defendants' solicitors for the Plaintiffs' signature and it was Mr Kan alone who was stated to be the intended tenant.

7. However, the first cheque was dishonoured and when the Plaintiffs were asked to resubmit the same, it was again dishonoured.

8. Thereafter, the Defendants delivered a second cheque for the same amount dated 5 February 1996. This was also dishonoured upon presentation on 10 February 1996. The Plaintiffs did not sign the Tenancy Agreement. Instead an action was brought on the second cheque by the 1st Plaintiff against the 2nd Defendant in High Court Action No.A3454 of 1996. An application for summary judgment was taken out by the 1st Plaintiff against the 2nd Defendant in that action and on 19 June 1996, the 1st Plaintiff accepted the sum of $90,000 paid by the 2nd Defendant into Court in satisfaction of the causes of action and claims in respect of the second cheque.

9. In the present application, Mr Kan, the 1st Defendant, filed an affirmation for himself and for the 2nd Defendant and said that they were the tenants of several pieces of land ("the adjoining land") adjoining to the property. In June 1995, the 2nd Defendant was carrying out certain works on the adjoining land and had to place some soil thereon. Because of the vague boundaries between the adjoining land and the property, at that time neither the 2nd Defendant nor he was aware that the 2nd Defendant had negligently placed some soil on the property until Ms Shing informed him by phone in mid June 1995. He had an inspection of the property and discovered that some soil was indeed put onto the property. He then agreed, on behalf of the 2nd Defendant, with Ms Shing over the phone in about late June 1995 that the 2nd Defendant would remove the soil by the end of July 1995.

10. The first point taken by Mr Ho for the Defendants in this appeal was that the 1st Defendant had never admitted liability on his own behalf. He only said that it was the 2nd Defendant who was carrying out certain works on the adjoining land. The letter of reply to Ms Shing dated 25 August was written by a Ms Tse, manageress of the 2nd Defendant for and on behalf of the 2nd Defendant with the 2nd Defendant's chop.

11. I agree with Mr Reyes, Counsel for the Plaintiffs, that the 1st Defendant's contention was rather artificial and what he said in the affirmation is entirely incredible in respect of his statement in para.3 of his affirmation that he only agreed on behalf of the 2nd Defendant with Ms Shing over the phone. It was admitted that he was also one of the tenants of the adjoining land. The works on the adjoining land must be for his benefit as well as the 2nd Defendant. The lease was stated to be taken out by him personally. The reality of the situation must be that he had made the admission without qualifying that it was made on behalf of the 2nd Defendant only. Indeed when the threat of legal action against him and the 2nd Defendant was made by Ms Shing, he said that the oral agreement over the phone with Ms Shing was made on his own behalf and on behalf of the 2nd Defendant. In the end, I find it quite clear from all the evidence before me that it was the 1st Defendant who made the admission and it was made on his own behalf as well as on behalf of the 2nd Defendant.

12. The second point taken by the Defence was that the settlement agreement over the phone has already put an end to the cause of action of trespass. Mr Ho for the Defendants relied heavily on Chitty on Contracts 27th ed. Vol.I para.22-014 which said :

" Executory satisfactory. At one time, a number of cases appeared to establish the rule that satisfaction was of no effect unless it was executed. While the satisfaction remained executory, that is to say, so long as the agreement to give satisfaction remained unperformed, the original claim was not discharged, nor would any action lie for breach of the accord. Even a tender of performance of the satisfaction agreed upon was adjudged insufficient. Only executed satisfaction would suffice. This rule, however, was never completely accepted and it is now established that satisfaction may be executory. The question is one of the construction of the accord: whether it was intended that the promise itself or the performance of the promise should discharge the original claim. 'The rational distinction seems to be, that if the promise be received in satisfaction, it is a good satisfaction; but if the performance, not the promise, is intended to operate in satisfaction, there will be no satisfaction without performance.' "

13. The question is therefore one of construction of the accord, whether it was intended the promise itself or the performance of the promise should discharge the original claim.

14. The parties did not say as to what were their intentions. From the evidence on the affirmation, in my view, it is unarguable that the accord was based on the performance of the settlement agreements and not on the promise itself only. Even the 1st Defendant said that "the parties had agreed to settle the said disputes on the property in the following manner" and one of the terms was that the Defendants should pay the rental deposit of $30,000 on or before the signing of the lease and Ms Shing's contention that six months' rental should be paid in advance was never disputed by Mr Kan. It could not be the case that the dispute should be settled by accepting a piece of paper which happened to be a dishonoured cheque. A proper construction from the contentions of the parties on the affidavits had clearly pointed to the construction that the accord is founded on the performance of the promise in the form of actual payment which would discharge the original claim and not the promise itself.

15. Incidental to the aforesaid submissions of the Defendants, Mr Ho further said that the admission of the Defendants was only up to 25 August 1995 and not thereafter, and the Plaintiffs should not be entitled to rely on such an admission for a continuing breach. I find this admission without any merit at all. Ms Shing has categorically stated that the trespass continued even up to 11 January 1998. I agree with Mr Reyes that every continuance of a trespass is a fresh trespass, the plaintiff who has remained in possession of the land are at least entitled to sue for the continuing trespass (see Clerk v. Lindsell on Torts (17th ed.) para.17-02 (pp.837-8); 30-21 and 30-22 (pp.1567-8). Whatever may or may not have happened to the Plaintiffs' cause of action in 1995, the Plaintiffs' trespass continued and continues today. The original admissions of the 1st and 2nd Defendants that the soil was dumped by them and such situation continued until the writ and the date of hearing (which is not at all disputed by the Defendants) is sufficient for the purpose of entering judgment by the Master.

16. Further, the acceptance of the Defendants' payment into Court in respect of HCA No.A3454/96 did not revive the said settlement agreement. That cheque is sufficiently supported by consideration which is not the concern of this Court in this Action. No doubt, such payment would be taken into consideration in the assessment of damages.

17. By reason of the aforesaid matters, this appeal is dismissed with costs to the Plaintiffs.

(D. Yam)

Judge of the Court of First Instance,
High Court