LAW CHI FAI v. MEYER PROPERTIES LTD in its own capacity and for and on behalf of all registered owners of the landed property known as Meyer Industrial Building, Nos. 380-382, Kwun Tong Road & No.2 Chong Yip Street, Kowloon, Hong Kong

DCCJ 663/2022

[2025] HKDC 1042

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 663 OF 2022

________________________

________________________

________________________

DECISION

________________________

1.  The defendant has taken out a summons on 30 September 2024 (“the Summons”)  to seek an interlocutory injunction against the plaintiff regarding the removal of the plaintiff’s canopy (“the Canopy”)  attached to the external wall of a building (“Meyer Building”, whose owners are represented by the defendant). There was a Building Department Order CCSI/TC/001996/11/K dated 2 July 2021 (“the BD Order”). There were 21 items in the BD Order and item (xxi)  referred to the Canopy.

2.  The substantive hearing was fixed for 28 February 2025 but on 21 February 2025, the parties vacated the substantive hearing by way of a consent summons leaving only the issue of costs to be determined by the court (Order by His Honour Judge Gary C.C. Lam dated 26 February 2025, Hearing Bundle p. 56-58).

3.  The parties has submitted their respective submissions on costs and the court will deal with this by way of paper disposal as follows.

Background

4.  This is an adverse possession case. The plaintiff runs a street business and claims possessory title over certain parts of Meyer Building including the part of external wall supporting the Canopy. The defendant counterclaimed seeking vacant possession of these parts and removal of the Canopy.

5.  There is no dispute that Meyer Building is subject to the BD Order which included the Canopy which was deemed an unauthorised structure.

6.  The parties’ solicitors had been corresponding regarding the BD Order and the Canopy.

7.  The defendant‘s solicitors has written twice to the plaintiff (1 September 2021 and 9 November 2021)  to request for removal of the Canopy.

8.  On 24 November 2021, the plaintiff‘s solicitors in reply stated that the plaintiff “shall not remove the canopy” as requested but indicated that:

“Our client understood that (BD order)  requested to remove the canopy recently. To this end, we shall negotiate with the (BD)  to resolve this matter.”

9.  The plaintiff’s solicitors’ letter dated 14 July 2023 still maintained this stance:

“…our client would negotiate with (the Building Department)  to resolve the (BD)  Order. Suffice to say that there is no immediate danger or safety risk posed to any person, contrary to what you have alleged.”

10.  However, despite such promises to “resolve this matter” with BD directly, it was clear that nothing has come of such alleged negotiations. The defendant’s solicitors have made repeated requests to the plaintiff for the removal of the Canopy (letters dated 11 July 2023, 31 October 2023, 11 April 2024, 10 July 2024 and 19 July 2024).

11.  The Building Department issued a letter to the defendant on 12 August 2024 stating, inter alia:

“I refer to (the BD Order)  which requires certain work at (the Meyer Building)  to be completed no later than 31 August 2021. According to our records, you have not notified this Department of the completion of all of the required works.

As you have failed to complete all of the required works without a reasonable excuse, prosecution against you…are being contemplated. Once prosecution action is taken, you are required to attend Court and may be liable to conviction to a maximum fine of $200,000 and to imprisonment for one year, and to a further fine of $20,000 for each day during which failure to comply…has continued…

Further, I may appoint a Government Contractor to carry out the required works…and recover the costs…plus supervision charge and a 20% surcharge from you.

Please take immediate action to comply with (the BD Order)…”

12.  The defendant took out the Summons on 30 September 2024 for an interlocutory injunction on the following terms (Hearing Bundle p. 36-37):

“(1)  The plaintiff…do within 28 days of the order…remove the Canopy erected into and reinstate the external wall of Meyer Building at its own costs so as to cause compliance with the BD Order…

(2)  In the event that the plaintiff fails to do as specified…the defendant be at liberty to carry out the works as necessary to remove the Canopy…so as to cause compliance with the BD order, and the plaintiff shall be prohibited from interfering with…such work…with costs of such works to be reimbursed by the plaintiff within 14 days…

(3)  The plaintiff be restrained from trespassing and/or interfering with the external wall of Meyer Building…

(4)  Any applicable stay of proceedings to be lifted to enable the present application to be made.

(5)  Costs of this application be to the defendant.”

13.  The plaintiff indicated that he would comply with the BD Order in December of 2024 despite claiming that he “understood” from “the person in charge” that “the Canopy pose no immediate danger” and the BD Order was “not the top priority to be enforced”. (The Plaintiff’s 2^nd Affirmation, paragraph 6, Hearing Bundle p.67).

14.  According to the plaintiff, he had carried out the work on the Canopy in January 2025. The plaintiff’s solicitors wrote on 13 January 2025 that:

“Without prejudice to our client’s claims…and without admission or concession to (the Summons), our client decided to detach the Canopy….for the purpose of complying with (the BD Order).”

15.  The plaintiff’s solicitors on 20 January 2025 wrote to confirm that Building Department staff was present during the remedial work and indicated that the BD Order relating the Canopy was complied with.

16.  Given this development, the parties agreed to vacate the substantive hearing on the Summons leaving only the issue of costs to be determined.

17.  The defendant sought costs but the plaintiff argued that costs of and occasioned by the Summons (except costs of this paper disposal)  be in the cause, but the costs of the paper disposal be to the plaintiff.

18.  The plaintiff raised 3 arguments in his submission on costs:

a.  The defendant is guilty of substantive and inordinate delay;

b.  Questionable merit of the Summons; and

c.  The defendant is not the real winner, as substantial part of the relief was not pursued in the last minute.

Legal principles

19.  It is trite that when determining the costs of an interlocutory injunction application, there is no “starting point”, “prima facie” or “default” position as such. In other words, it is not right to say that as a matter of principle, the costs of an interlocutory injunction should be in the cause unless there is justification otherwise. The court has to take into account all the relevant circumstances in the case, for example, whether the merit of the injunction application was still undetermined at that stage, in which case the court may incline to award the costs of the application with the costs of the action. (Fremery Enrich Holdings Limited v Chan Michael Cyrus [2024] HKCFI 2011, Xcelom Ltd v BGI-Hongkong Co Ltd (No. 2)  [2017] 1 HKLRD 436)

Substantive and inordinate delay

20.  The plaintiff, in effect, argued that the BD Order was dated 2 July 2021, and on 24 November 2021, the plaintiff already took the stance that he would not remove the Canopy, yet the defendant did not take out the Summons until some 3 years later on 30 September 2024.

21.  I think this line of argument completely overlooked the fact that the plaintiff also, at the same time when he took that stance, indicated that he would deal with the Building Department to “resolve” the BD Order himself.

22.  It was clear that the plaintiff had failed to “resolve” the BD Order all along (despite repeated chasers from the defendant). If he had, the Building Department would not have issued the “ultimatum” letter on 12 August 2024 threatening prosecution.

23.  It is also disingenuous for the plaintiff to suggest that this “ultimatum” letter had not specify which item was outstanding and argued that the Canopy pose no immediate danger so “there is no objective evidence of…the existence of the Canopy suddenly facilitate the intended prosecution” (paragraphs 18 and 19 of the plaintiff’s submission on costs).

24.  Firstly, it cannot be disputed that the BD Order against the Canopy was outstanding. That was why when the remedial work was done in January 2025, by the plaintiff’s own admission, the Building Department staff was present to confirm that the BD Order was complied with.

25.  Secondly, the “ultimatum” letter never stated that the Building Department was making any exception concerning the Canopy in the intended prosecution. Clearly, the plaintiff has all along failed to resolve this matter with the Building Department, irrespective of the plaintiff‘s argument of “the Canopy posing no immediate danger” or otherwise.

26.  Thus, it was entirely this failure on part of the plaintiff which caused the delay over those years. Indeed, if the plaintiff had been negotiating with the Building Department as he claimed that he would do, it should be clear to him well before August 2024 that the Building Department was not entertaining such, and he should have complied with the BD Order in good time. If so, there would be no need for the defendant to take out the Summons.

27.  As it turned out, when the “ultimatum“ letter came, given that the intended prosecution and stated penalties were against all owners of Meyer Building including the defendant, the defendant was compelled to take out the Summons. This was done within 2 months of receiving the “ultimatum” letter.

28.  There was clearly no substantial and inordinate delay on the part of the defendant.

29.  Incidentally, the plaintiff also raised a criticism that the defendant has consented to a stay the whole proceedings in June 2024 without reserving the right to make an injunction application.

30.  I cannot see the logic in this line of argument. This was when the plaintiff was still promising that he would be “resolving the matter” himself with the Building Department. That was before the “ultimatum” letter in August 2024 when it was clear to the defendant that the plaintiff had failed to do so.

31.  In any case, whether one party has warned the other by “reserving a right for an application” or not has nothing to do with the merit of the eventual application, nor is it relevant, as far as I can see, to the issue of costs of that application.

Merit of the Summons

32.  The plaintiff argued that, as the possessory title of the external wall supporting the Canopy has not been determined at this stage, the defendant was not entitled to compel the plaintiff to remove the Canopy. If the court would eventually find for the plaintiff, the Building Department would direct the BD Order at the plaintiff.

33.  I think that there must exist a serious issue to be tried on whether the plaintiff was trespassing or has exclusive possession on the external wall. But the risk of irreparable damage without the injunction was that, at that stage, the Building Department was threatening criminal prosecution with risks of fines and even imprisonment against the defendant.

34.  The issue raised by the plaintiff concerned only against which party that the BD Order should be directed (and not that the BD Order against the Canopy was without merit). He also failed to produce any evidence that the Building Department has agreed to hold off prosecution until the determination of possessory title in this action to show that, as such, there would be no risk of any irreparable damage for the defendant. Claiming that “a person in charge” orally told him vaguely that the BD Order was “not the top priority to be enforced” would offer no comfort to the defendant.

35.  In such circumstances, the balance of convenience was clearly in favour of granting the injunction.

The defendant not the real winner

36.  The plaintiff argued that the Summons also included a restraining order (paragraph 3 of the Summons)  but the defendant did not pursue that in the consent summons. He claimed that “the defendant did not have any concrete evidence showing that the Restraining Order is indispensable to comply with the BD Order or somehow is necessary for reducing any irreparable damage” (paragraph 28 of the plaintiff’s submission on costs).

37.  Although the restraining order was worded in terms of “trespassing”, one must also consider that, by the plaintiff‘s own case, the remedial work he performed was only detaching the Canopy from the external wall and this was considered by the Building Department to be compliant to the BD Order.

38.  Thus, the intention of the Restraining Order must be that the plaintiff should be restrained from re-attaching the Canopy to the external wall in the future, which would have again caused non-compliance with the BD Order.

39.  More importantly, the plaintiff‘s undertaking to the court and the defendant to carry out all rectification work in compliance with the BD Order at his own costs has rendered any restraining order unnecessary (see Order of His Honour Judge C.C. Lam, Hearing Bundle p.56).

40.  As such, I cannot see how this would make the defendant “not the overall winner”.

41.  Overall, it was the remedial work done by the plaintiff in compliance with the BD Order (despite claiming that this was done “without prejudice to the Summons”)  that rendered the pursuance of the Summons unnecessary.

42.  Indeed, one might make the observation that, despite repeated requests from the defendant, the plaintiff has insisted for over 3 years that he would “resolve the matter” with the Building Department without compliance with the BD Order. He only did the remedial work after the Summons was issued. The timing of such infers that, despite such “without prejudice” stance, it must have been the Summons which finally compelled the plaintiff to comply.

43.  As such, I find that the plaintiff should bear the costs of the Summons.

Order

44.  The plaintiff shall bear the costs of and occasioned by the Summons (including the costs of this paper disposal)  payable forthwith.

45.  If there is no agreement on costs, the plaintiff shall within 14 days of this decision lodge and serve a summary list of objections to the defendant’s statement of costs (already lodged with the defendant‘s written submission on costs)  and the court will thereafter assess costs summarily by way of paper disposal.