KOWLOON-CANTON RAILWAY CORPORATION v. HA CHIU YEUNG AND ANOTHER

HCA 385/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 385 OF 2013

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D E C I S I O N

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Introduction

1.  In the present action, the plaintiff Kowloon-Canton Railway Corporation (“P”) claims against the defendants (“Ds”), among other things, for an order that Ds do deliver up vacant possession of an alleged encroached area (“Encroached Area”) of land vested in P under the Kowloon-Canton Railway Corporation Ordinance, Cap 372 (“Vested Land”). 

2.  Ds are the owners and occupies of a lot situated near a portion of the Vested Land.  The Encroached Area is a part of the Vested Land on the crest of a slope (“Slope”)[1], adjoining Ds’ lot in Hong Lok Yuen.   

3.  P now seeks leave to be released from its implied undertaking and to disclose a report prepared by its geotechnical engineer and all subsequent investigation reports in relation to the various structures erected by Ds on the Encroached Area, to the Buildings Authority, the Lands Department, the Civil Engineering and Development Department and any other relevant Government bureaus and departments (collectively “Government Authorities”) for their advice, assistance and/or enforcement actions.

4.  Although P remains the legal owner of the Vested Land, in December 2007, it has granted a 50 year service concession to the MTRC Corporation Limited (“MTRC”) to operate P’s railway lines, including the East Rail Line, which runs immediately below and adjacent to the Slope.

5.  It is P’s allegation that the various structures erected by Ds on the Encroached Area are unathorized and illegal, being contrary to section 14(i) of the Buildings Ordinance, Cap 123.  Such structures included fences, a swimming pool, the Retaining Walls referred below, balustrades, terrace, staircases etc (collectively “Structures”)[2].

6.  Ds’ defence and counterclaim is mainly based on their “adverse possession” of the Encroached Area.

Background leading to the present application

7.  P attended a site inspection outside the Encroached Area on 8 January 2016, when P first observed that Ds had put up extensive brick retaining walls (“Retaining Walls”) within and near the boundary of the Encroached Area, which P alleged to be of poor design and construction.  P then requested Ds to allow them to enter the Encroached Area to conduct a site inspection, but such request was rejected by Ds.

8.  This led to P issuing a summons applying for a site inspection of the Encroached Area.  P’s application was granted by G Lam J on 3 June 2016 (“Lam Order”).  A joint site inspection was subsequently carried out by the parties’ respective geotechnical engineers on 30 June 2016.

9.  Thereafter, P’s geotechnical engineer Mr Brian Ieong who attended the joint site inspection produced an inspection report on 23 August 2016 (“Ieong Report”).  The Ieong Report contains worrying findings as to the dangers arising from the Structures.  In particular, Mr Ieong is of the opinion that the Retaining Walls on the Slope are sub-standard and have a potentially high risk of collapse[3].  It is Mr Ieong’s recommendation that the Structures on the Slope be removed as soon as possible.  However, if they cannot presently be removed, Mr Ieong then recommends that ground investigation works (“Ground Investigation Works”) be carried out as soon as possible in order to determine the stability of the Structures.

10.  In light of the above, P’s solicitors wrote to Ds’ solicitors to consider (a) undertaking the urgent demolition of the Structures; or (b) undertaking the necessary Ground Investigation Works. Neither proposal was accepted by Ds which led to P issuing a summons on 30 August 2016 (“30.08.16 Summons”).

11.  In the 30.08.16 Summons P sought the following orders, among other things:

(i) Ds to permit P and MTRC to enter the Encroached Area and the surrounding area within Ds’ physical possession and control (collectively “Site”) for conducting the Ground Investigation Works;

(ii) An injunction to restrain Ds form interfering with, disturbing or preventing P and MTRC from entering the Site and carrying out the Ground Investigation Works and taking photographs and/or video recordings ;

(iii) Leave be granted to P to disclose the Ieong Report and all subsequent investigation reports to MTRC and the Government Authorities for their advice, assistance and/or enforcement actions.

12.  The above summons came before this court on an urgent basis and this court granted orders in respect of (i) and (ii) above on 5 September 2016[4] (“05.09.16 Order”).  At the same time, leave was granted to P to disclose the Ieong Report and all subsequent investigation reports to MTRC for its advice, assistance and/or enforcement actions.  This court took the view that there was no similar urgency in relation to P’s application for leave for disclosure sought in (iii) above as against the Government Authorities and the remaining of (iii) was adjourned to a date for argument.

13.  Subsequently, on 29 September 2016, instead of restoring the 30.08.16 Summons in relation to the remaining part of (iii) above before this court, P issued another summons before Master A Ho to seek leave to disclose the Ieong Report and all subsequent investigations reports produced pursuant to the 05.09.16 Order to the Government Authorities for their advice, assistance and/or enforcement actions (“29.09.16 Summons”), which was directed to be fixed before this court for argument.

14.  By the time of the present hearing before this court, there had already been 6 Case Management Conferences before the Master and discovery had been completed and witness statement exchanged and at the hearing, all parties agreed to a speedy trial and directions were so given.

15.  The court was also informed at the hearing that after the 05.09.16 Order, there had to be a tendering process as to which firm of contractors P was to instruct to carry out the Ground Investigation Works and that such works only commenced in early November 12016 and were estimated to completed by end of December 2016.  There was at one stage apparently some disagreement as to the hours and the number of days on which P’s contractor was allowed to carry out the works, and this had been the subject of another summons issued by P, but this matter was resolved at the hearing.

16.  Counsel Mr Justin Lam appeared by P and Counsel Mr Fung Pak Kay appeared for Ds.

General Principles

17.  The general principles on release of implied undertaking of documents obtained on discovery have been set out in this court’s decision in Anite Telecoms Ltd v World Best Cargo-Ling Co Ltd, HCA 2560/2013, unrep, 19 October 2015[5], to which both Counsel referred.  In summary, the person who obtained the documents or information has to demonstrate cogent and persuasive reasons for release and each case turns on its own facts.

18.  Mr Fung further referred to paragraph 19.42 of Matthews and Malek QC on Disclosure, 4^th Edition, namely:

“In deciding whether or not to grant permission it is submitted that the correct approach is for the court to look at all the circumstances including the circumstances of the original disclosure, the nature and strength of the evidence, the type of criminality involved and the interests of both the applicant and the party providing discovery as well as any public interest involved.”

19.  There was no dispute between Counsel on the broad principles.

The evidence

20.  P’s company secretary and senior manager of administration, Mr Michael John Arnold, had filed an affirmation in support of the 30.08.16 Summons and Mr Ieong had also filed an affidavit in support thereof, producing the Ieong Report.

21.  Mr Arnold had in his affirmation said that P sought leave to disclose the Ieong Report to the Government Authorities owing to the public safety issues arising from the Structures so that timeous advice can be given and/or assistance can be obtained for the protection of the public interest.  It is P’s case that irrespective of the title to the Encroached Area, the Structures still pose a significant nuisance to the public and likely to cause damage to the railway, and that timeous enforcement actions should be taken by the relevant authorities without undue dely.

22.  In Mr Ieong’s affidavit, he had set out details as to why he had great concerns over the safety and stability of the Slope and the Structures thereat.  He was of the view that there was strong evidence suggesting that the Structures were in danger of causing the Slope to slide and that remedial measures needed to be taken and that any delay would pose a serious threat to the safety of the public and those travelling on the East Rail Line[6].

23.  No evidence was filed by or on behalf of Ds.

Whether P has cogent and persuasive reasons for disclosure

24.  First of all, at the 1^st hearing of the 30.08.16 Summons, Counsel for Ds had submitted that D did not have the opportunity to adduce expert evidence in reply to the Ieong Report due to the short notice of that summons.

25.  However, the joint site inspection conducted on 30 June 2016 pursuant to the Lam Order was attended also by Ds’ appointed geotechnical engineer.  When P’s solicitors first wrote to Ds’ then solicitors on 22 August 2016 pointing out to them P’s engineer Mr Ieong’s views and seeking their agreement to the Ground Investigation Works, Ds had replied on 24 August 2016 opposing to P’s proposals on the grounds including that it was prejudicial to Ds who were not in a position to seek any legal advice and/or expert opinion on the Ieong Report[7].

26.  This court took the view that by the hearing on 5 September 2016, as Ds’ own geotechnical engineer had attended the joint inspection, Ds should have sufficient time to produce their own expert report or evidence in reply to the Ieong Report.  In any event, even up to the present hearing, no such report or evidence had been placed before this court by Ds, and as I have mentioned earlier, Ds themselves also had not filed any evidence in reply to Mr Ieong’s affidavit, nor Mr Arnold’s affirmation.

27.  As a result, there was no evidence from Ds to challenge or contradict the evidence of Mr Arnold and Mr Ieong.

28.  The only argument from Mr Fung was that there had been delay on the part of P, namely that P had knowledge of and was in fact aware of the existence of the Structures in early 2013, as seen from an email from MTRC to P of 18 January 2013[8].  Further, it would appear that P’s solicitors had written to notify the Buildings Authority of possible unauthorized building works in March 2013, and according to the reply letter dated 07 May 2013 from Building Authority (“07.05.13 Letter”), the Building Authority had carried out an inspection and that the inspection had revealed unauthorized building works, namely a swimming pool and the Structures built partly on Ds’ lot and partly on P’s Vested Land. 

29.  Mr Fung pointed out that in the 07.05.13 Letter, the Building Authority had stated that “no obvious danger was envisaged during the time of inspection” and that they had issued an advisory letter to request the owners/occupants to organize the removal work of a portion of the swimming pool and the Structures within Ds’ lot, but as the remaining portion located outside Ds’ lot was outside the purview of the Building Authority, no enforcement action by the department could be contemplated at that time.

30.  However, the Building Authority had said that the department would keep monitoring the case closely with other relevant departments to consider taking enforcement action as appropriate.

31.  It can be seen from Mr Arnold’s witness statement that MTRC received a letter of 27 December 2012 from the Lands Department informing MTRC that site inspection revealed that a swimming pool was constructed partly on Ds’ lot and partly on the Vested Land and MTRC was asked to look into the matter.  In fact, it was this letter from the Lands Department which led to MTRC sending the email on 18 January 2013 to P referred to earlier.

32.  The evidence indicated that in 2012, MTRC had instructed an external consultant Mott MacDonald to carry out stability assessment and ground investigations on a number of slopes along the East Rail Line, including the Slope.

33.  After the discovery of the Structures, MTRC had in fact asked Mott MacDonald to re-calculate the safety factor of the Slope paying due consideration to the effect of the swimming pool.  The supplementary assessment report from Mott MacDonald in July 2013 concluded that the additional loads imposed on the Slope by the Structures did not materially change their 1^st assessment in 2012[9].

34.  However, Mr Arnold had pointed out as with their 1^st assessment, Mott MacDonald’s staff were unable to gain access to the Encroached Area at that time, and that the supplementary assessment was based on the assumption that the Structures were in themselves safe.

35.  P’s solicitors did write to Ds’ then solicitors in April 2013 to request for site inspection by P, P’s solicitors and Government representatives, but Ds only allowed the parties and their respective land surveyors and legal representatives to attend the site for the purpose to determine the boundary of the Encroached Area only.

36.  According to Mr Arnold, it was only when Ds applied for leave in late November 2015 to amend their defence and counterclaim to plead for the first time that P had erected of affixed certain features in the vicinity of the Encroached Area that P, its legal representative and MTRC attended a site inspection in January 2016 and that was the first time that Mr Arnold, being a professionally qualified civil engineer, observed that the extensive Retaining Walls put up by Ds were of poor design and construction and he suspected that the Retaining Walls would be at risk of collapsing, and he saw the need to conduct an urgent safety assessment of the Structures.

37.  There was no evidence to contradict what Mr Arnold had said.  Thus, even though P was aware of the Structures including the swimming pool in early 2013, P only became aware of the danger of the Retaining Walls in 2016, and that was when P applied for the site inspection which resulted in the Lam Order.

38.  I do not see any sufficient evidence of alleged delay on the part of P.  In any event, as pointed out by Mr Lam, delay is not a valid reason for refusing release/disclosure.

39.  Mr Fung further argued that all the relevant Government departments were already aware of the Structures, as they had conducted site inspections in 2013, and took no further action.

40.  Although no obvious danger was envisaged by the Building Authority in early 2013, this does not mean now that P has obtained the Ieong Report, the contents should not be made known to the Building Authority as the Ieong Report clearly indicated that the Structures could affect public safety.  Further, although no enforcement action was contemplated by the Authority in May 2013, as stated therein, this was because the remaining portion located outside Ds’ lot was out of their purview.  In any event, the Building Authority had said they would keep monitoring the case closely with other relevant departments.  I do not think the Building Authority’s 07.05.13 Letter really helps Ds’ case.

41.  A copy of the CV of Mr Ieong had been produced by him and he has solid experience in civil, geotechnical and structural engineering in a variety of infrastructure projects and private development in Hong Kong.  He is a practising AP, RSE, RGE and RI registered under the Buildings Ordinance[10]. 

42.  Mr Ieong had referred to the Mott MacDonald assessment reports and pointed out that even according to those assessment reports, the Slope was only just marginally stable in 2013 based on stability calculation which was calculated without regard to the Structures especially the Retaining Walls and on the presumption that the Structures were safe.  Mr Ieong considered that the presumption turned out to be not the case in the present situation.  Mr Ieong then set out the stability of the Retaining Walls was of grave concern due to some 9 factors.  He further was of the opinion that given the close proximity of the Slope and the East Rail Line, potential failure of the Retaining Walls would likely to cause landslide debris to flow onto the railway tracks, especially during heavy rainstorm condition, and that failure of the Retaining Walls might even trigger failure or erosion of the downhill slope which could increase the volume of landslide debris[11].

43.  As I have said, there was no evidence from Ds to contradict Mr Ieong’s evidence.

44.  The purpose of the disclosure, as stated by Mr Arnold and as mentioned earlier, is that timeous advice can be given and/or assistance can be obtained by the Government Authorities for the protection of the public interest.

45.  Although no fraud or criminality is involved in the present case, there is the public safety to consider and in my view public interest is involved.

46.  Having considered all the circumstances of this case, I am satisfied that P has demonstrated cogent and persuasive reasons for release from their implied undertaking and the disclosure to the Government Authorities.

Conclusion

47.  In light of the above, I am prepared to grant leave to P as sought. In the 30.08.2016 Summons and the 29.09.16 Summons, P sought costs in the cause.  I thus order accordingly.