CHENG HONG PUI v. YUEN SUNG CHING AND ANOTHER

DCCJ221/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 221 OF 2015

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REASONS FOR DECISION

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Introduction

1. This is an appeal by way of rehearing of the two applications of the 1^st and the 2^nd defendants (collectively “the defendants”) before Master on 14 January 2016 for:-

(1)  striking out the Amended Statement of Claim under O 18 r 19 of the Rules of the District Court and the inherent jurisdiction of the court on the grounds that it discloses no reasonable cause of action and is vexatious or otherwise an abuse of the process of the court and dismissing the plaintiff’s action against the Defendants with costs; and

(2)  striking out the Affidavit of Cheng Hong Pui (“the Affidavit”) under O 41 r 6 on the grounds that it is irrelevant and scandalous.

Both applications were dismissed by the Master upon conclusion of the hearing. 

2. The Suit Land comprises 5 pieces or parcels of lands in Demarcation District No 113, Yuen Long, New Territories (“the Suit Land”).  Together, they form a strip of land fit for use as an access road.

3. At all material times, the estate represented by the 1^st defendant was the registered owner of Lot 1070C, whereas the 2^nd defendant was the registered owner of Lot 1070D3.  Both lots use the Suit Land for vehicular access. 

4. Each of the constituent lots of the Suit Land was and is registered in the name of 2 co-owners as tenants-in-common in equal shares, namely the plaintiff and the 1^st defendant in his personal capacity (“Yuen”), or the plaintiff and Cheery Consultants Limited, a limited company under Yuen’s control as the majority shareholder (“the Company”).

5. On 13 September 2013, the plaintiff, Yuen and the Company, granted a right of way on other lands in consideration of a total sum of one million Hong Kong dollars.

6. On 24 September 2014, Yuen and the Company (without joining the plaintiff) executed a Deed of Grant of Right of Way (“the Deed”) of the Suit Land to “formally grant” the right of way to the 2^nd defendant and other persons without any considerations. 

7. The plaintiff's claim is based on various alleged trespasses of the defendants on the Suit Land. 

8. The period of alleged trespasses spanned from 12 September 2013 to 18 December 2014 and is continuing. 

9. The defendants' case is that the acts of alleged trespasses were acts of or authorized by Yuen or the Company as a co-owner of the Suit Land.  Furthermore, Yuen and the Company have executed the Deed to grant the defendants full right and liberty at all times to pass and repass over and upon the Suit Land.

10. The plaintiff alleged that some of the trespasses were acts of the 2^nd defendant or her agent, and such acts cannot be authorized or ratified by Yuen or the Company alone. 

Applicable legal principles

11. The following principles could be summarized from the commentary set out in Hong Kong Civil Procedure 2016, §18/19/4 at pp 448-449.

12. It is only in “plain and obvious” cases that the court should exercise its summary powers to strike out a pleading.  The burden is on the party seeking to strike out a pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail.  The claim must be obviously unsustainable, the pleadings unarguably bad, and it must be impossible, not just improbable, for the claim to succeed, before the court will strike it out.  If the court does not think the matter to be “clear beyond doubt”, there should be no striking out.

13. There should be no trial on affidavit.  Disputed facts are to be taken in favour of the party sought to be struck out.

14. The court should not decide difficult questions of law in a striking out application.  The court is loath to strike out a case that involves an area of the law which is in the process of developing – summary dismissal would deprive the court of hearing full argument on the subject.

15. It is submitted by Mr Wong, counsel for the defendants, that the 1^st defendant, being the executor and the beneficiary of the Lot 107C under the will of Yip Wai Ki, cannot be liable for trespasses as he or the Company is also the co-owner of the Suit Land at the material time.

16. I agree.  A claim for injunction against him has no chance of success and should be struck out.

The claim against the 2^nd defendant

17. In Chin Lan Hong & Others v Cheung Poh Choo & Others [2005] 3 HKLRD 811, the Hong Kong Court of Appeal held as follows:-

(a)  that a tenant-in-common is entitled to deal, in whatever way he desires, with his own undivided share: he may lease it or dispose of his right of possession to a stranger as he likes without the concurrence of the other tenants-in-common; and

(b)  that the plaintiff in that case (as co-owners) could not maintain a claim in trespass in respect of the occupation of the licencee of another tenant-in-common.

18. It is submitted by Mr Wong, counsel for the defendants, that the alleged trespasses of the 2^nd defendant if any, were acts authorized by Yuen or the Company.  Thus, they cannot constitute trespasses actionable by the plaintiff as another tenant-in-common.  Hence the plaintiff’s claim is unsustainable and ought to be struck out.

19. Mr Chang, counsel for the plaintiff, submitted that the correctness of the Court of Appeal decision of Chin Lan Hong & Ors v Cheung Poh Choo & Ors [2005] 3 HKLRD 811 that Mr Wong relied on was questioned by the New South Wales Court of Appeal in State of New South Wales v Koumdjiev [2005] NSWCA 247 at para 40 (per Hodgson JA) as follows:-

“In my opinion, the Hong Kong case is incorrect insofar as it asserts that, so long as a licence granted by a tenant in common does not purport to give exclusive possession, such a licence may both authorize another person, in the absence of the grantor and for an indefinite period, to do whatever a tenant in common can do, and also not be terminable by other tenants in common of the property. In my opinion, that gives too little weight to an incident of possession, namely the right or power to grant or withhold permission to others to enter property. Although one tenant in common can transfer or lease its interest, I do not think one tenant in common can, without such a transfer or lease, grant a licence to another, irrevocable by other tenants in common, if that licence is of a kind that goes beyond what is reasonable and incidental to the grantor’s possession and use and enjoyment of the property in common with the other tenants in common, and which interferes with the possession and use and enjoyment of the property by other tenants in common.”

“……in my opinion, any licence in excess of what is reasonable and incidental to one tenant in common’s possession and use and enjoyment of the property, and which prejudices the other tenants in common’s possession and use and enjoyment of the property, is a licence terminable by the other tenant in common”.

20. The co-owners in the tenancy in common have the right to dispose of their interest without reference to the other co-owner.  In my opinion, it is not plain and obvious that the co-owner has no case against the other co-owner if such act substantially deprives him of his enjoyment of his interest.

21. In this case, it is arguable that the plaintiff may have the potential to charge a substantial sum of money for the right of way.  Granting such right for free, because Yuen and the Company have a vested interest in granting such right, substantially affects the plaintiff’s interest.

22. Furthermore, there is the question as to whether the Chin Lan Hong & Others (supra) should be distinguished from the present case, as Chin Lan Hong & Others is a case relating to possession of a premises and this case is relating to the right of way.  It is not appropriate to deal with difficult questions of law at this stage.  The 2^nd defendant’s application for striking out should be dismissed.

23. For the striking out of affidavit, I find that the contents of the affidavit provide the useful background of the case and are relevant.  The court should not “micro-examine” the contents of the affidavit.  It is also doubtful whether the application has any significance after the decision of the summons for striking out.  I therefore dismiss the application.

24. In conclusion, it is ordered as follows:-

(a)  The claim against the 1^st defendant be struck out.

(b)  The 2^nd defendant’s application for striking out be dismissed.

(c)  The application for striking out the Affidavit be dismissed.

(d)  There be order nisi that the plaintiff do pay to the 1^st defendant the costs of this action and the application for striking out.  The 2^nd defendant do pay the costs of the application for striking out the Statement of Claim to the plaintiff.  The 1^st and the 2^nd defendants do pay to the plaintiff the costs of the application of striking out the Affidavit.  The costs order of the Master be varied to the effect that the 2^nd defendant do pay the sum of HK$73,360.00 being half of the assessed costs to the plaintiff.  There be no order as to costs between the plaintiff and the 1^st defendant in respect of the Master’s hearing.  There be certificate for counsel and costs to be taxed if not agreed.  Unless application for variation of the above costs orders is taken out within 14 days from the date hereof, the costs orders be made absolute thereafter.