PROSPEROUS WORLD LAND INVESTMENT CO LTD v. LAI FUNG SHAN

DCMP 3931/2019

[2020] HKDC 453

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3931 OF 2019

--------------------------------

--------------------------------

--------------------------------

----------------------

DECISION

----------------------

Introduction

1.  Before me is an originating summons filed herein on 5 December 2019.  The originating summons was issued pursuant to O113 of the Rules of the District Court, whereby the plaintiff sought to recover possession of the followings:-

(a)     The External Wall on the Ground Floor of Metropole Building, Nos 53-63 Peking Road & Nos 12, 12A, 12B, & 12C Hankow Road, Kowloon, Hong Kong, (hereinafter the “External Wall”); and

(b)     A structure measuring about 3.37 metres in length, 0.96 metres in width and 3.08 metres in height, which is attached or adjacent to the External Wall (hereinafter the “Structure”).

2.  The summons was originally fixed to be heard on 25 March 2020.  However, due to the General Adjourned Period, the hearing was adjourned to 17 June 2020.  At the conclusion of the hearing, I said I would deliver my decision in a later day, which I now do.

The plaintiff’s case

3.  In about 1973, the plaintiff acquired a piece of property, and the External Wall is part and parcel to that property[1].  At the time of the acquisition, there was a wall-shop attached to the External Wall.  The wall-shop was occupied by a Ms Tsang, who sold imitation jewelries there. According to the plaintiff, Ms Tsang was permitted to continue to occupy the wall-shop at a monthly fee[2].

4.  A formal tenancy agreement was entered into between the plaintiff and Ms Tsang in 1991 with a term of 2 years[3]. The tenancy agreement was renewed several times, and after the termination of last tenancy agreement (which was made in 1999), Ms Tsang continued to occupy the wall-shop on a monthly basis until 2002[4]. In December 2002, the plaintiff and Ms Tsang entered into a licence agreement[5]. Again, the licence agreement was renewed every two years, and the last one was made in January 2009[6].

5.  In the tenancy agreement, the subject matter was defined as “the said premises”, together with ‘the furniture and fixtures”[7].  The former was the External Wall (referred thereto as “Wallshop”)[8] and the latter included “the gate, show case (L shape) 3’ x 10’, and all lights and fixtures”[9].  In the licence agreements, the subject matter was described as the “Advertising Sign Space(s) together with the gate, the show case (L-shaped) 3’ x 10’ and all lights and fixtures therein on the [External Wall]”[10] (“the Sign Space”). 

6.  Ms Tsang passed away in 2009, and the Sign Space was then occupied by a Mr Lo[11]. The plaintiff entered into a licence agreement with Mr Lo in 2011, which was renewed once in 2013[12]. After the expiration of the licence agreement in December 2014, Mr Lo occupied the Sign Space on monthly basis[13]. Starting from about April 2015, there was default in payment of the licence fee[14].  The plaintiff instituted legal proceedings to recover the possession of the Sign Space.  A Writ of Possession was issued in June 2016 as a result[15].

7.  On about 22 June 2016, the plaintiff discovered that, while the Sign Space was vacated, one of its side was demolished by the defendant (who is the daughter of Ms Tsang) and her husband[16]. Despite the plaintiff’s objection, the defendant and her husband carried out the alternation work and converted the Sign Space into the Structure[17].

The defendant’s case

8.  According to the defendant, Ms Tsang had occupied the wall-shop since 1978. She obtained a hawker licence from the then Urban Council in 1979[18].  The defendant said she was not aware of any agreements entered into between the plaintiff and Ms Tsang until after the passing of Ms Tsang[19].

9.  Shortly before the passing of Ms Tsang, the hawker licence (now issued by the Food and Environmental Hygiene Department) was transferred to the defendant[20].  The defendant said that the plaintiff had asked her for licence fee, but she refused to pay[21].  Later, the defendant and Mr Lo entered into an agreement that Mr Lo would occupy the wall-shop as an assistant to the defendant[22]. According to the defendant, she was not aware of any agreement made between Mr Lo and the plaintiff[23].

10.  After Mr Lo had disappeared, the defendant took over the wall-shop.  She carried out some renovation works and removed the Structure away from the External Wall to “avoid unnecessary dispute”[24]. It is the defendant’s case that the Structure is situated on the scavenging lane, which is a government land[25], not a property privately owned by the plaintiff, and that she was permitted to occupy there pursuant to the hawker licence issued by the government[26].

11.  There is a factual dispute as to how far the Structure was away from the External Wall.  According to the survey report prepared on behalf of the plaintiff, it was only 8cm away[27]; however, according to the defendant, it was about 20cm[28].  Accordingly, it does not appear to be in dispute that the Structure is only adjacent, and not attached to, the External Wall.

Parties’ submissions

12.  Mr Simon Lam, counsel for the plaintiff, argues that, because of the undisputed fact that agreements had been entered into between the plaintiff and Ms Tsang, the plaintiff was the owner of the wall-shop and the Sign Space[29] (the predecessors of the Structure).  It is irrelevant as to whether the Structure is located on a government land, whether the defendant obtained a hawker licence, and whether the Structure is attached to the External Wall[30].  In his submission, Mr Lam relied heavily on the case Toho Limited v Ng Sik Yu^[31], where the Court of Appeal found that, even though the stall erected by the defendant therein was on the government land, the structure substantially prevented and interfered with the plaintiff’s enjoyment of the right of possession of the wall.  It was held in that case that the defendant failed to deliver vacant possession of the wall.  Mr Lam argued that the Toho case is indistinguishable from the present one.

13.  Mr Leon Chow, counsel for the defendant, on the other hand submitted that it was absurd for the plaintiff to say that the defendant had occupied the External Wall, which was only a concrete slab[32]. Nor can it be said that the defendant had occupied the surface of the wall[33].  For the latter proposition, Mr Chow referred me to Sunbroad Holdings Ltd v Unknown Occupiers^[34], where the Court of Appeal held that there could neither be a lease on the surface of a wall, nor an adverse possession of the surface of a wall.  According to Mr Chow, the Structure (which he called the “Metallic Frames”) was only chattel and could not be repossessed under O113 (which is a summary procedure for the recovery of land)[35]. Furthermore, Mr Chow argued that the plaintiff could not claim that the defendant had been in sole occupation on a government land, as all public members could pass through it without permission[36]. Nor was it possible to recover possession of a government land, in which the plaintiff had no interests[37]. Mr Chow then distinguished the Toho case from the present one in arguing that the Toho case was not a case made under O113 and was a case that concerned a tenancy agreement and nuisance[38].

14.  In the Plaintiff’s Reply Submissions, Mr Lam argued for the first time that the plaintiff had been in adverse possession of, and had possessory title over, the scavenging lane on which the Structure was erected since 1973[39].  Again, Mr Lam relied on the Toho case and argued that the words “occupy” (which means “take up or fill (space or time or a place)”[40]) and “possession” should be interpreted together[41]. Accordingly, the phrases “is occupied” and “in occupation” in O113 should be interpreted as “taking up of space in such a manner that unimpeded access and use of the wall is prevented or interfered with”[42].

Legal principles

15.  O113 provides a summary procedure for the recovery of land which is occupied solely by a person or persons who entered into or remain in occupation without the licence or consent of the person in possession or of any predecessor of his.  This summary procedure enables the court in a proper case to deal more quickly with a claim for possession than it would otherwise be able to do[43]. The approach in dealing with an O113 application is akin to that of an O14 application[44]. As such, an O113 application is only intended for clear and obvious case where the defendant cannot raise any triable issue or question[45].

Discussion

16.  In my view, the present case is not appropriate to be determined under the summary procedure of O113.  These are my reasons.

17.  First, it is undisputed that the Structure is located on the scavenging lane, which is a government land.  In the Plaintiff’s Reply Submissions, Mr Lam’s raised the point that the plaintiff had been in adverse possession of, and had possessory title over, the government land.  In oral submissions, Mr Lam accepted that the limitation period of 60 years has not expired and the plaintiff did not have a perfect title on the scavenging lane.  That said, Mr Lam argued that the plaintiff had gained possession of the scavenging lane through the successive agreements made with Ms Tsang and Mr Lo, and that it would suffice to recover the land as the plaintiff’s title is better than the defendant’s. In my opinion, this provides the first reason why a summary possession of land should not be given to the plaintiff in the present case.

18.  As I have noted above, the summary procedure under O113 is intended only for clear and obvious case.  Furthermore, as both Mr Lam[46] and Mr Chow[47] accepted, a judgment made under O113 is a judgment in rem, which binds all the world.  Suppose in the present case a judgment is made in the plaintiff’s favour, the judgment would bind the whole world, including those who had a superior title (ie the government).  Clearly, this cannot be right.  A better view must be that only those who have absolute and unequivocal title of the land may utilize the O113 procedure to recover possession of the land. 

19.  Secondly, in order to be successful in an O113 application, the plaintiff must demonstrate that the land to be recovered is occupied by the defendant[48].  Occupation is the key element for an O113 application.  In this respect, contrary to what Mr Lam submitted, I do not think that the concepts of “in occupation” (and “to be occupied”) and “possession” should be muddled up together.  For the present purpose, I am prepared to adopt the literal meaning of the word, and to accept Mr Lam’s definition of “occupation”, that is, to occupy is to take up or fill space, time, or places.  In this sense, it is clearly incorrect (or even “absurd”, as Mr Chow suggested) to say that a person can occupy a surface of a plane, which is only of two dimensions.  Clearly, a two-dimensional plane cannot be taken up or filled.  It follows that the surface of a wall cannot be occupied.  This interpretation is indeed consistent with the line of authorities starting from Leung Kwok Kau v Tam So Wa^[49], where the courts held that neither a lease can be created, nor adverse possession can be obtained, nor trespass can be claimed, over the surface of a wall.  If this analysis is correct, any application for vacant possession of a wall would fall outside the ambit of O113 procedure.

20.  But can one possess a surface of a wall without being able to occupy it?  As I mentioned earlier, the concepts of “occupation” and “possession” are separate and distinct, although in some contexts occupation may connote possession.  Possession means “having physical custody and control of an object”[50]. In this respect, I find nothing absurd to say that a person is in possession of the surface of a wall (or a “concrete slab”).  The Court of Appeal has clearly held in the Toho case that a person can obtain vacant possession of a wall. 

21.  However, the judgments of Toho, as well as the subsequent cases that follow it[51], were based on a factual finding that the plaintiff could not gain access to the wall through the thin gap, thereby the plaintiff’s physical enjoyment of the wall is impeded or interfered with.  Here it comes the third hurdle for the plaintiff. It is observed that all cases in the Toho’s line of authorities were actions begun by writ.  Unlike the present case, the courts there had no problem to make factual findings concerning the plaintiff’s enjoyment of the wall.  On the other hand, the court’s fact-finding function in the present case is limited.  In this case, there is a factual dispute as to the width of the gap.  There is no direct evidence showing that the plaintiff’s physical enjoyment of the wall is prevented or interfered with by the Structure.  Mr Lam said the evidence given by the surveyor was preferable, and invited me to draw an inference that the plaintiff’s physical enjoyment of the wall had been impeded or interfered with because of the thin gap.  With respect, I am not minded to do that, bearing in mind that there should never be a mini-trial on affidavit evidence alone.

22.  Fourthly, it is also observed that, in Toho’s line of cases, there always accompanied an order for vacant possession with an injunction for the removal of the structure.  In my view, that is the correct approach, because it would not be meaningful to make an order for vacant possession without compelling the removal of the structure which prevent or interfere with the physical enjoyment of that possession.  Since O113 application is heard by a master, this court has no jurisdiction to grant the relevant injunction for the removal of the structure[52].

23.  Finally, according to Mr Chow, the defendant did not accept that the Structure is the property of the plaintiff, as she had renovated it in 2016. Mr Lam replied that the ownership of the Structure would not be passed to the defendant, who being a trespasser renovated the property without the owner’s consent[53].  As I have noted above, the descriptions of wall-shop (and the Sign Space) are not consistent with that of the Structure.  There is no evidence that the gate and L-shape showcase etc (referred to in the tenancy agreements and the licence agreements) remained to be parts of the Structure.  In my view, such a dispute of ownership is clearly a triable question that mixed with facts and law, and which is not suitable to be determined in a summary manner.

24.  For these reasons, I take the view that this case is not suitable to be determined under O113 procedure.  I therefore refuse the plaintiff’s application for a summary order for possession.

Order

25.  At the conclusion of the hearing, Mr Lam asked me to consider granting an order allowing the present proceeding to be continued as if it had been begun by writ, if I am not minded to grant a summary order for possession.  On the other hand, Mr Chow said that the originating summons should be dismissed simpliciter, letting the plaintiff to start a fresh action in due course.  In my view, Mr Lam’s proposal is preferable as it would be more efficient and costs-saving.

26.  Mr Lam also submitted that, if the present proceeding is to be continued as if it had been begun by writ, the costs of this application should be in the cause of the writ action.  It was submitted that the present situation is akin to a situation where an unconditional leave to defend is granted in an O14 application.  I agree. 

27.  I therefore make the following order:-

(1)     The plaintiff’s application for a summary order for possession under O113 be dismissed;

(2)     The proceedings by the Originating Summons filed herein on 5 December 2019 be continued as if it had been begun by writ;

(3)     The plaintiff shall file and serve a Statement of Claim within 28 days from the date hereof;

(4)     The defendant shall file and serve a Defence within 28 days after the service of the Statement of Claim;

(5)     The plaintiff shall file and serve a Reply (if any) within 28 days after the service of the Defence;

(6)     Costs of the O113 application be costs in the cause of the Writ action with certificate for counsel.