HO MING KONG AND OTHERS v. CHOW WONG HING AND OTHERS

HCA 2829/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTIONNO.2829OF2004

(Transferred from the Lands Tribunal under LDPE 904/2001 and LDPE 226/2002)

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J U D G M E N T

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1.  The Ho family have lived in Shau Tau Kok for four generations. Shau Tau Kok of course has a history of its own. It is on the border with theMainland.

2.  Back in the early 1970s, Mr Ho ChapHing’s mother, who lived at 39 Chung Ying Street, owned the land which is in dispute, namely subsections 10, 11 and 12 of Section A of Lot 727 in Demarcation District No. 40, New Territories (“the land”).  That land stretches between Chung Ying Street at one end and Tsoi Yuen Kok at the other.

3.  The land was just two doors along, so to speak, from the Ho family house.  The land was, essentially, fields.  That land is now owned by theplaintiffs, and theplaintiffs say that Madam Ho rented it out to the father of Mr Chow WongHing(“Mr Chow”).  Mr Chow tells me that his father is still alive and in good health.  But he says the land was rented out by his paternal grandmother.  In the event, that probably does not matter.  The amount of rent does not matter, either.  It seems to have been $1,200 per year and it was paid at Chinese New Year.

4.  Mr Chow’s father ran a grocery or provisions business and he used the land to raise chickens and probably ducks,as well.  The business still exists today.  It is called Chow Yeung Kee, and it is owned by Mr Chow and his brother.  There were chicken sheds on the far end of the land from Chung Ying Street, i.e. the sheds were just across Tsoi Yuen Kok from house No. 58, where the Chow family lived.  The family rented that house from the Ho family. Also on the land, next to the chicken sheds, was a kitchen.  Whether that was used for domestic purposes or for cooking chicken feet and other food to be sold does not matter any more, although it might have done at one stage if it were contended that the property was rented as domestic premises.  The rest of the land seems to have been covered in vegetation, mostly trees.  Lungngan, banana and guava have been mentioned in the evidence.

5.  From 1949, Mr Ho ChapHing lived in the mainland.  Although he came back to Hong Kong for Chinese New Year, he did not come back to live in Shau Tau Kok until 1986.  But his son did return in 1981.

6.  Rent receipts were given to Chow Yeung Kee. They state that it was“in respect of vegetable land 727 A10, A11, A12, Tsoi Yuen Kok, Chung Ying Street.”  Copies of receipts have been produced in evidence for the years 1988, 1994 and 1998.  Those copies came initially from the solicitors acting for Chow Yuen Kee.  Other receipts in similar terms have also been produced.

7.  There has been a joint surveyors’ report made by the parties’ surveyors.  That states that in 1976 there was a“fence…surrounding the subject lots(coloured yellow on the survey sheet).”  The report states that the fence was there in 1979.  In respect of 1985, it is said“that the temporary structure at the western side of the subject lots and the fence recorded on the survey sheet were the same as those in the 1976 and 1979 survey sheets.”

8.  That fence was also the subject of evidence from Mr Ho MingPor.  He had taken a photograph in 1985 from a vantage point overlooking the land.  That photograph shows the roofs of what must have been the chicken sheds and the kitchen.  Indeed, there is a chimney in the roof of the kitchen.  The rest of the land was covered in trees.  Mr Ho MingPor said that at the time, there was a nettingfence around the land andthatthe structures that one sees ontheChung Ying Street side were outside the netting fence and not on the landand that they must have been on Government land outside the property.

9.  Things being what they were, the Government never asked for rentorrates until about year 2000. That caused some difficulty, because Chow Yeung Kee was unwilling to bear that.  So notice to quit was served.

10.  Although Mr Chow said in evidence that he gave back what had been rented immediately, that was clearly and demonstrably not the case.

11.  Theplaintiffs commenced proceedings on 10 October 2001 in the Lands Tribunal for possession.  That was resisted.  As a result, the proceedings were transferred to the High Court and this action resulted.

12.  A defence and counterclaim was filed on behalf of Chow Yeung Kee, thefirst defendant. Not only was the tenancy of what was originally a piece of agricultural land admitted and averredbutit was claimed that the premises had, in the mid-1980s, become domestic premises by reason of the fact that at the time a new residential dwelling, including a kitchen, had been constructed for domestic use.

13.  On that basis, thefirstdefendant claimed to be entitled to a tenancy of the land.  No attempt was made to suggest that thefirst defendant only claimedatenancywhichdid not extend to the whole of the land.

14.  Mr Chow gave evidence and claimed that the tenancy had only been in respect of the chicken sheds and kitchen.  In the first place, he was not party to arranging the tenancy.  His father, who is still alive and well, could easily have been called to give evidence,hewould havehad knowledge of mattersmuch closer to the time when the tenancy had been created.  In the second place, I could not accept his evidence in other respects.  His protestations that he did not know Mr Ho ChapHing, who was the person who collected the rent and lived no more than a few yards away from the Chows’ house at No. 58, had a decidedly hollow ring. Mr Chow no doubt wished to deny Mr Ho ChapHing’s assertion that Mr Ho had complained about the construction of buildings on the Chung Ying Street side of the land in 1992.

15.  In that respect, I accept Mr Ho’s evidence.  He gave evidence that he had complained to the police.  A copy of his notebook was produced, showing his notes made at the time when the complaint was made and the police officer who had received the complaint.

16.  In the circumstances,I have no doubt whatever that the tenancy that Chow Yeung Kee had was of the whole of the land, namely the whole of subsections 10, 11 and 12 of Section A of Lot 727.

17.  I do not lose sight of the fact that Mr Chow had something to gain by trying to limit thefirst defendant’s tenancy to the sheds.  As a result of a judgment that has been obtained against thefirst defendant, thefirst defendant is responsible for mesne profits in respect of the land.  Possession was only obtained by theplaintiff in March 2006, when thefirst defendant failed to comply with an unless order.

18.  In those circumstances, it is conceded by Ms Au, who has courageously and strenuously argued a most difficult case on behalf of thesecondtofourth defendants, that thosedefendants have no defence.

19.  However, for completeness, it is right to deal,briefly,with the assertions made on behalf of thesecondtofourth defendants as to their occupation of the land.  I say on behalf of those defendants advisedly, as of those proprietors or thosedefendants, only Chow SauFong gave evidence.  She is the partner of thethird defendant.  She lived in Tsoi Yuen Kok.  Her witness statement stated that,in 1982, she set up a temporary stall in Chung Ying Street.  The witness statement continues that at that time, on the Hong Kong side of Chung Ying Street, i.e. that towards Tsoi Yuen Kok,therewas mostly abandoned uncultivated agricultural land.  She said that thesecondandfourth defendants moved there about half a year later.  The statement says thatshe and her husband hada small temporary stall.  After about a year, her husband and her reinforced the structure with a tin roof and walls and secured it with a lock.  The squatter control on several occasions demanded the demolition and removal ofhershop.  Eventually the structures became permanent, and by 1993 they had water and electricity at the shops. It can be observed that that date coincides with the business registrations which have been produced.

20.  As has been pointed out, thedefendants may have been advised initially that 12 years’ possession was sufficient to establish their right to remain in the property.  See, for example, paragraph 22 of the amended defence and counterclaim and paragraph 19 of Chan SauFong’s witness statement.

21.  Whatever, the case for thesecondtofourth defendants has fallen back to the assertion that they stored goods on the land under canvas under the trees, where they could not be seen from the aerial photographs.

22.  I regret that not only did I find such evidence as was called thoroughly vague and unconvincing, but the surveyors’ agreed report shows that up to about 1985, there were only hawkers’ stalls or the like on Chung Ying Street,outside thenettingfence marking the boundary of the land.  Starting in 1986, there seems to have been encroachment onto the landwith what appears to have been very temporary canvas coverings.

23.  I accept Mr Ho ChapHing’s evidence that the construction of premises on the land really took place in about 1992.  After all, he lived no more than a few yards away. He complained to the police, but his complaints were of no avail because the land was rented out.

24.  Basing herself on the very indefinite evidence primarily from Chan SauFong, Ms Au has said that there was storage of goods under the trees which could not be seen.

25.  I simply cannot accept that.  It is inconsistent with the survey report.  It is belied by the photograph taken by Mr Ho MingPor.

26.  The evidence ofLeeSauKwanand Wong Chi Fai really were of no assistance to thedefendants at all.  Their evidence was that the structures had always been on the land from well before the time, when it is clear that they were not.  One simply has to have regard to the photograph taken by Mr Ho MingPor to be assured of that.

27.  In those circumstances, I have no hesitation in giving judgment for theplaintiffs.

(Submissions on costs)

28.  I think it is clear that under the provisions of Order 22, Rule 24, which relate to sanctioned offers, if a judgment against a defendant is more advantageous to the plaintiff than the proposals contained in the sanctioned offer, then the plaintiff is entitled to costs on an indemnity basis after the latest date on which the defendant could have accepted the offer without requiring leave of the court.  The offer that was made was simply that the land be given back to the plaintiffs and that no mesne profits would be required.  Ms Au has drawn my attention to two letters from the defendants’ solicitors, and really, they amount to an offer to buy the land from the plaintiffs for, in the second letter, a total of $6 million.

29.  Unfortunately, I do not consider that that is a reasonable offer which the court can take into account under the terms of Order 22, Rule 24(5) as a basis for saying that it would be unjust to make the order because an offer to buy somebody else’s land, if he is unwilling to sell it, is not something which I consider, at any rate as regards this case, is something which the court could say would justify the defendant in holding out.

30.  In those circumstances, the plaintiffs would be entitled to their costs on an indemnity basis from the last date on which that offer could be accepted without any leave of the court, and that date is 22 June.

31.  The matter is remitted to the Master for assessment of damages and mesne profits.

32.  Costs to theplaintiff.  Costs from 22 June on an indemnity basis.