LUI HON KWONG AND OTHERS v. 譚木慶 AND OTHERS

HCA 1428/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1428 OF 2002

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(by Counterclaim)

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(By original Writ and by Order to carry on proceedings dated 20 April 2009)

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J U D G M E N T

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Introduction

1.  The 4 plaintiffs commenced this action in April 2002 claiming (among other things) an order for possession of the suit property against the defendants.  The cause of action lies in trespass.

2.  There is also a claim in conversion concerning chattels inside the suit property.

3.  The defendants (in effect, the 1^st-named defendant, Madam Tam Muk Hing (“Mdm Tam”)) deny the claim and counterclaim that Mdm Tam acquired title by way of adverse possession of the suit property.

4.  In short, the suit property is a portion of the empty space on the ground floor beside (and underneath) the staircase leading to the upper floors of a building in Kimberley Street, Tsimshatsui (also called “the said staircase”).

The Plaintiffs’ Case

5.  The 2^nd plaintiff (“Mdm Kan”) claims in essence that (either directly or through others) she has been occupying the suit property since about 1993 pursuant to a lease or licence granted by the other plaintiffs, the suit property’s registered co-owners.

6.  The suit property, and a small portion of the pavement immediately in front of it, was first used by Mdm Kan’s former husband, Mr Ng Kam Wa (“Ng”), to operate a plumbing and electrical work business.  Mdm Kan began to operate a flower shop, called “Lee Po” (利寶), in February 1993 when Ng went to the Mainland to start his business there.

7.  Since about 1998 or 1999 to the end of 2001, Mdm Kan allowed Mdm Ng, the sister of Ng, to operate the flower shop.

8.  Since an unknown date in January 2002, Mdm Tam started to trespass the suit property, using it to operate a flower shop called “Lan Yuen” (蘭苑).

The Defendants’ Case

9.  Mdm Tam’s son, one Mr Leung Siu Man (“Leung”) was a repairman.  Since the 1960’s, Leung has been operating a small electrical work and plumbing business underneath the said staircase.  Leung’s business also extended to the pavement immediately in front of the suit property.

10.  Leung passed away in 1992 (when he was about 44 years old).  Mdm Tam then sold off the remaining inventory such as light bulbs and batteries.  In about 1993, she started to run a flower shop at the same location until now.  Her shop is called “Lan Yuen”.

11.  The suit property has never been occupied by Mdm Kan or anyone else.  From about 1992 to about 1998/1999, Mdm Tam allowed Mdm Kan to sell flowers in her shop.  Mdm Kan was replaced by Mdm Ng in about 1998/1999 until early 2002 (when Mdm Ng, who came from Macau, was arrested for breach of her conditions to stay in Hong Kong and repatriated).

Witnesses’ Credibility and Findings of Fact

12.  4 witnesses testified at trial:-

(a) for the plaintiffs, Mdm Kan;

(b)    for the defence:-

(1)  Mdm Tam;

(2)  Ms Lee;

(3)  Mr Lau (“Lau”).

Apart from the above, reference has been made by the defendants to the witness statement and affirmation of the 1^st plaintiff (“Lui”) who was one of the registered co-owners of the suit property before he passed away.  After his death, Lui’s claim continues to be pursued by his widow, Mdm Chan.

13.  In gist, I accept the testimony of Mdm Kan to be truthful and reliable.  On the other hand, I do not accept Mdm Tam’s testimony.  I find the testimony of Ms Lee and Lau to be unreliable.

(a)   Mdm Kan

14.  Mdm Kan’s testimony follows essentially the plaintiffs’ case summarized above.

15.  The defendants criticize her credibility based on the following matters.

16.  First, there is a discrepancy between Mdm Kan’s testimony and the account given by Lui.  According to Mdm Kan, after Leung passed away in 1992, Ng obtained the permission of Lui to use the suit property and Mdm Tam’s permission to use the pavement in front (that is, Leung’s place of business) to run his own business.  However, Lui’s affirmation narrates that in 1993, he and the other co-owners agreed to let the suit property to Mdm Kan for operating a flower shop.  Lui’s witness statement states that the co-owners let the suit property to Ng first and to Mdm Kan later.

17.  I consider the above difference to be the result of incomplete memory on the part of Mdm Kan or Lui.  In fact, the difference shows that both were trying their best to recount events which happened some years back.  I do not consider it an indication of dishonesty.

18.  The same conclusion should be reached regarding the difference in the amount of monthly sum paid by Mdm Kan to Lui: one states that it was $2,000 whereas the one states it was $1,500.

19.  Secondly, Mdm Kan has testified to matters which do not appear in her witness statement or her affirmation:-

(1) Mdm Kan said that Ng agreed to pay her $10,000 in 1998 or 1999 in exchange for Mdm Kan returning the flower shop to Ng (so that Ng’s sister, Mdm Ng, could operate it).  Mdm Kan testified that it was also agreed if Ng failed to pay the sum within 3 months, the flower shop would have to be returned to her.  The last-mentioned matter does not appear in Mdm Kan’s witness statement;

(2) further, Mdm Kan’s affirmation entirely omits to mentioned the alleged agreement, but claims that Mdm Kan handed the flower shop over to Mdm Ng because of her unavailability due to personal engagement.

20.  The content of Mdm Kan’s witness statement is more detailed than her affirmation.  This is understandable in view that the affirmation was prepared for the purpose of an application for an interlocutory injunction.  The time available for preparing the affirmation was probably more limited.  Para. 19(2) above should be considered in that light.

21.  As regards para. 19(1) above, Mdm Ng’s testimony about the agreement relating to the time for Ng to pay her $10,000 was elicited by counsel during her cross-examination.  Moreover, her witness statement has in fact mentioned Ng’s failure to pay as promised and the quarrel which ensued.  She also said in the witness statement she demanded Ng to return the shop.

22.  Other points have also been raised by the defendants.  However, I regard them to be minor matters and will not set them out here save to say they have been considered by me.

(b)   Mdm Tam

23.  Mdm Tam is about 89 years old.  Despite her relatively advanced age, she spoke with clarity and exhibited no hearing or comprehension problem.

24.  Her testimony is also along the lines of the defendants’ case summarized above.

25.  In brief, I agree with the plaintiffs that her testimony is not to be believed for the following reasons.

26.  One, Mdm Tam’s case is that, since about 1993 up to now, the suit property (and the pavement immediately in front) has always been operated by her as a flower shop called “Lan Yuen”.  The photographs produced by the plaintiffs render that to be inherently implausible.  Dates have been imprinted on some of the photographs.  It can be inferred they reflect the time when the photographs were taken.  I conclude that the photographs were mostly taken in the 1990’s (especially between 1993 and 1997) and they show the flower shop to have a signboard “Lee Po”.  Mdm Tam has not been able to explain this, except that she did not bother with the signboard.

27.  Two, Mdm Tam claims that, since about 1992, she permitted Ng to install a telephone in her shop.  She also permitted Mdm Kan to share the suit property with her (also to sell flowers).  Since about 1998 or 1999, she permitted Mdm Ng to do the same.

28.  There is an agreed plan showing the approximate measurements of the area occupied by the flower shop.  The main portion of the shop is roughly 3 metres deep with a frontage of about 1.4 metres.  It is highly implausible two businesses selling the same type of goods could be accommodated in such a small space for a sustained period of time.

29.  The hawker licence of Mdm Tam shows the following address:-

“KIMBERLEY ST. ON PAVEMENT [IN FRONT] OF NO. 22”

(金巴利街22號前行人路上)

The area occupied by Mdm Tam’s business (1.3 metres x 0.3 meter) also appears on the licence.  Neither the address nor the area can advance the defendants’ case.

30.  The hawker licence has to be considered in the following light:-

(a) Mdm Tam’s testimony is in short that Leung’s business consisted basically of two wooden boxes; the larger one was placed on the floor on top of a stand while the smaller one was hung on the wall (whether it was the external wall is unclear);

(b)    Mdm Tam’s hawker licence was “inherited” from the hawker’s licence of Leung; she sought a change of the licensee’s name to her after Leung’s death;

(c) Leung’s hawker licence dated 7 October 1983 shows the same address and area stated in para. 29 above.

31.  The only piece of evidence which arguably may support the defendants’ case is Leung’s business registration record.  The document was dated 2 March 1970 and bears an address:-

“22, Kimberley New St., Stair-Case, Kln.”

(金巴利新街22號樓梯口)

It is undisputed “Kimberley New Street” refers to the same street.  But whether the reference to the said staircase in the record actually meant a business located underneath it, or merely one located near it, is again unclear.

32.  Three, it is not Mdm Tam’s case either Mdm Kan or Mdm Ng has made any payment for sharing the shop space.  She was unable to explain why she did not consider or seek payment from Mdm Kan or Mdm Ng.

33.  Fourth, electricity bills in Ng’s name does not fit Mdm Tam’s case that Ng only used her shop for contact purpose.

(c)   Ms Lee

34.  Ms Lee’s witness statement dated 10 March 2004 states the following:-

“譚木慶與兒子梁兆民在三十年前已經在金巴利街22號樓梯口經營長虹水電工程 … ”.

35.  Ms Lee testified to events which took place about 30 years ago, when she was about 8 to 10 years old.  Her testimony is to the effect Leung has had two wooden boxes placed at the entrance but he also has had a show-case placed underneath the said staircase.

36.  I do not find her memory of where Leung’s business was located to be reliable.  Mdm Tam, who should have a better memory of her son’s possessions, only mentioned the two boxes; she did not say Leung also possessed a show-case.

(d)   Lau

37.  Lau’s witness statement dated 10 March 2004 also states the following:-

“譚木慶與兒子梁兆民在三十年前已經在金巴利街22號樓梯口經營長虹水電工程 … ”.

However, in a hand-written note dated 28 May 2002, Lau said:-

“長虹水電工程梁兆民生前在金巴利街22號門邊叁拾多年 … ”.

The Chinese characters “門邊” literally mean “door edge”.

38.  The common way of expressing something to be underneath a staircase in Cantonese is “樓梯底”.  Even “樓梯口” may be taken to have the same meaning.  But the description given in Lau’s note militates against such meaning.

39.  For this reason, I do not consider Lau to be a reliable witness insofar as he insists that Leung’s business was located underneath the said staircase.

(e)   Findings of Fact

40.  Having considered the totality of the evidence (including my assessment of the witnesses’ testimony summarized above), the following facts are found:-

(1) the suit property was possessed by Ng since about 1993 pursuant to a lease or licence granted by the co-owners including Lui;

(2) Ng also obtained Mdm Tam’s permission to occupy the pavement in front of the suit property around the same time;

(3) Mdm Kan took over the said premises from Ng shortly later and commenced operating her flower shop “Lee Po”;

(4) Mdm Kan handed the shop over to Mdm Ng in about 1998 or 1999 on condition Ng should pay her $10,000;

(5) despite his promise, Ng failed to do so and Mdm Kan kept on demanding him to return the shop to her;

(6) Mdm Ng was arrested by the police and left the shop in February 2002;

(7) Leung and Mdm Tam did not occupy the suit property since the 1960’s but only occupied the pavement nearby, running first a plumbing and electrical work business and then a flower-vendor’s business.

Legal Principles

41.  The legal principles relating to adverse possession are undisputed.  In essence, they are:-

(a) there must be factual possession signifying an appropriate degree of physical control: Powell v. McFarlane [1977] 38 P & CR 452;

(b)    there must be the requisite intention to possess: Wong Tak Yue v. Kung Kwok Wai and Another [1998] 1 HKC 1.

Conclusion

42.  It is accepted the burden of proof is on the defendants to establish adverse possession.  I conclude that they have failed to do so.  On the other hand, I am satisfied that Mdm Kan has established her claim.

43.  Judgment should be entered in Mdm Kan’s favour in the terms set out below.  Save as regards costs (see paras. 50 to 56 below), no order will be made in relation to the other plaintiffs.

44.  The counterclaim is dismissed.

Relief

(a)   Possession

45.  An order for possession of the area depicted in the agreed plan should be made.  The precise term of the order for possession should be agreed between the parties or, failing agreement, as approved by the court.

(b)   Damages for Trespass

46.  I am satisfied that mesne profits should be assessed at $2,000 per month, being the amount agreed to between Lui and Mdm Kan.

47.  Mesne profits should be payable by the defendants from January 2002 to the delivery up of vacant possession of the suit property.

(c)   Conversion of Chattels

48.  I agree with the defendants that there is no reliable evidence of ownership of the chattels.  For that reason, I am not prepared to award nominal damages (which is what the plaintiffs seek) under this head of claim.

(d)   Injunction Orders

49.  There is no indication at present the defendants will not comply with the order for possession.  No injunction order is granted at this stage.

Costs Order

50.  Subject to paras. 51 and 52 below, the parties agree that the usual rule that costs should follow the event is applicable.

51.  The defendants argue in their written supplemental closing submission that a plaintiff must have an immediate right of possession in order to successfully ground an action in trespass (see also Clerk & Lindsell on Torts (2006)19^th Ed., para. 19-10).

52.  Having granted a lease or licence in Mdm Kan’s favour, the defendants contend that Lui, the 3^rd and 4^th plaintiffs lack sufficient interest to bring this action.

53.  The defendants’ above contentions are only raised during closing submission stage.  Their pleadings never make that distinction.  In fact, their counterclaim is brought against the plaintiffs en bloc.

54.  The defendants fairly admit that no practical benefit would be obtained by them even if the above contentions are accepted by the court.  They are still liable to deliver up the suit property to Mdm Kam.  The contentions are therefore in the context of this action “technical”.

55.  By reason of the matters set out in paras. 53 and 54 above, it is unfair to award costs against the “technically” unsuccessful plaintiffs.

56.  There will accordingly be the following costs order.  No order is made as regards costs incurred for the exclusive benefit of the unsuccessful plaintiffs.  Subject to that, the costs of this action (including any reserved costs) are to be paid by the defendants to the plaintiffs to be taxed if not agreed.

57.  The defendants’ own costs are to be taxed in accordance with the Legal Aid Regulations (Cap. 91A).