MARSPAN LTD v. CHIU MARGARET AND OTHERS

HCMP 968/2022

[2023] HKCFI 241

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 968 OF 2022

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DECISION

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1.  This is the first hearing of the inter partes summons of 30 December 2022 (the “Summons”)  taken out by the plaintiff (“P”)  for an interim injunction against the 1^st and 2^nd defendants (“D1” and “D2”)  in relation to the use and occupation of a piece of land of about 1,070 square meters (the “Garden”)  surrounding a property at Lots 2 and 630 in DD 238 (the “Property”).

2.  Only 15 minutes have been sought for the hearing.  The matters have quite some history behind it.  I am not prepared to deal with the Summons substantively without affording the defendants any chance to file evidence. Relevant to this also is the fact that the Originating Summons herein was issued on 21 July 2022, and the Summons was not taken out until more than 5 months later.  The substantive hearing of the Summons will therefore have to be adjourned.  But pending that substantive hearing, P seeks an interim-interim injunction in terms of the §§(1)(a)  and (1)(b)  of the Summons.

3.  I recite the following core relevant facts.

4.  D1 was adjudicated bankrupt in April 2020.  She used to hold 999 of the 1,000 issued shares in P.  Upon her bankruptcy, title to the shares passed to her trustees in bankruptcy (the “Trustees”).  After a number of legal battles, the Trustees were finally in November 2021 registered as P’s shareholders.

5.  P is the legal owner of the Property.  It is also the leaseholder of the Garden under a short-term tenancy dated 4 February 1998 from the Government (No. SX1811, the “STL”).

6.  The STL contains provisions governing the use of the Garden (confined to “private garden, storeroom and kitchen” – Clause 2(b)  read with the First Schedule (the “Permitted Uses”))  and construction thereon (restricted in effect to the existing and specified ones except with prior approval – Clause 2(c)  read with the Second Schedule, and Third Schedule Condition 2).

7.  D1 used to occupied the Property.  That was until July 2022 when she was evicted upon a number of enforcement and execution proceedings for possession of the Property.

8.  However, upon eviction, D1 together with certain unknown persons continued to occupy the Garden.  It is P’s case that D1 has been occupying the same as her residence, or at least not for the Permitted Uses.

9.  On 21 July 2022, P commenced the present proceedings under Order 113 for possession of the Garden.

10.  As observed by Lam VP (as the PJ then was)  in China Shanshui Cement Group Ltd and others v Zhang Caikui and others [2018] HKCA 409, in relation to an application for interim-interim relief, the court’s primary concern is to do practical justice on the balance of fairness.

11.  In relation to §(1)(a)  of the Summons:

(a)  P seeks thereby to restrain D1 and D2 from using or permitting the use of the Garden otherwise than for the Permitted Uses;

(b)  The matters, as I have said, have quite a bit of background behind it. In particular, D3’s position is that he is the beneficial owner of 500 of the shares in P, that on the basis of estoppel, he is entitled to enter and access inter alia the Garden, and that he has authorized D1 to do so on his behalf. Relying on those same bases, D1 says that her occupation of the Garden is justifiable;

(c)  The present action was taken out in July last year;

(d)  P has so far not been able to obtain any summary relief under Order 113;

(e)  On the other hand, various interlocutory applications have been taken out thereunder, which have been adjourned for substantive hearing in the later part of this year;

(f)  Despite the initiation of the present action in July last year, the present Summons was only taken out on 30 December 2022;

(g)  On the facts of the case before me, on the balance of fairness, I am not prepared to grant any interim-interim relief in relation to §(1)(a)  of the Summons.

12.  In relation to §(1)(b)  of the Summons:

(a)  P seeks thereby to restrain D1 and D2 from “erecting any structure on the Garden”;

(b)  According to the evidence before me, recently on 6 December 2022, construction works were commenced at the Garden.  A metal wall and gate (the “Metal Wall and Gate”)  were erected across the entrance to the Garden;

(c)  Breaches of the STL may entitle the Government to re-enter;

(d)  Mr Lai contends that the Metal Wall and Gate are not “structure”, which term he submits should be construed as property having a degree of permanence;

(e)  I express no view at this stage on the correctness of that construction, because that contention and construction put forward have to be considered with regard to the full terms of Third Schedule Condition 2, which relate not just to “structure” but also “boundary walls and fence”, that:

“No structure shall be erected on the premises other than the existing one-storey storeroom and one-storey kitchen as shown on the plan annexed hereto … , boundary walls and fence except with the prior written approval of the District Lands Officer”;

(f)  The Metal Wall and Gate are not “existing boundary walls and fence”;

(g)  Even if the word “existing” does not qualify “boundary walls and fence”, it is highly arguable that the Metal Wall and Gate are not “boundary walls and fence”, as they are built beyond the existing boundary within the Garden;

(h)  In the course of the hearing, Mr Li has further clarified that P is not seeking by §1(b)  removal of the Metal Wall and Gate, but an injunction against further building against the STL;

(i)  I add that the question relating to the construction of structure etc at the Garden is independent of any background and other disputes between the parties, and is also independent of any averred justification on D1’s part to occupy the Garden;

(j)  On balance of fairness, I grant interim-interim relief in the following terms, that “D1 and D2 be restrained from erecting on the Garden any structure, building, boundary walls and fence not permitted by the terms of the STL.”

13.  I now proceed to give directions on the further conduct of the matter – 21 days for D1 to do so, 14 days thereafter for P in reply, and no further affirmation without leave.  As the Summons is only against D1 and D2, I do not specifically grant any liberty to D3 to file evidence, but there is nothing to stop him from doing so should he want to as a witness for D1.  The substantive hearing will be fixed in consultation with (but not bound by)  counsel diaries, with 3 hours reserved.

14.  Costs will be in the cause of the Summons.