United Bright Ltd v. Secretary for Justice

FAMV No. 27 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 27 OF 2015 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV NO. 211 OF 2012)

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BETWEEN:

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REASONS FOR DETERMINATION

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Mr Justice Ribeiro PJ :

1.At the hearing we refused leave to appeal.  Our reasons are as follows.

2.The applicant is a property developer who has had Building Authority approval to build a residential block with 37 storeys of flats together with other floors housing car-parks, recreational facilities and a refuge floor.  It wishes to build on a Lot in Kowloon which was sold by the Government by public auction in 1939 subject to certain Conditions of Sale. These included Special Conditions which relevantly provide as follows:

“(2) the purchaser will not be allowed to erect any buildings on the lot except detached or semi-detached houses of European type designed for the occupation of one family.

(3) The purchaser shall not at any time during the term of years for which the lot is leased erect on any part thereof a house with a compound of less than 7,000 square feet including the site of the house.

(6) The design of the exterior elevations and the disposition and height of any building to be erected on the lot shall be subject to the special approval of the Director of Public Works and in no case may any building to be erected on the lot exceed 2 storeys.”

3.Special Condition 6 has two parts.  It consists first, of what has been called a design, disposition and height clause (“DDH clause”) and secondly, of a Two-Storey Height Restriction (“2-storey HR”).

4.The Conditions of Sale were modified by a Modification Letter (“ML”) dated 15 May 1957 from the Registrar General (Land Officer) to the then lessee in the following terms:

“ I refer to your application addressed to the Director of Public Works and have to inform you that Government has approved the modification of the Conditions of Sale No 3939 so as to permit of the erection of flats on the [specified Sections] subject to the following conditions :-

(a) Payment of an additional premium amounting to $33,550.00 for each Section within 14 days on demand.

(b) Buildings to comply with the following coverage limitations:

3 storeys over car port – 55% of lot area

4 “ “ “ “ – 45% “ “ “

5 “ “ “ “ – 40% “ “ “

(c) Car parking to be at the rate of not less than 1 car per flat.

(d) Buildings to be in accordance with the provisions of the Buildings Ordinance and plans to be submitted to the Building Authority for approval in the usual way.

2. Except as thus modified all the Conditions of Sale No. 3939 shall remain in full force and effect. ...”

5.The applicant argued in the Courts below that the ML had permanently extinguished the 2-storey HR imposed by Special Condition 6 so that it was now free to erect buildings over five storeys tall on the site without further modification of the lease.  That argument failed before DHCJ Sakhrani[1] and in the Court of Appeal.[2]

6.The applicant seeks leave to appeal on the basis that the Court of Appeal did not expressly consider or determine whether the ML had abrogated the 2-storey HR and that the courts below only rejected its proposed construction after impermissibly relying on correspondence between the Government and the lessee which was not available to a person searching the Land Register.  It submits that the following question of great general or public importance arises, namely:

“In relation to conveyancing documents intended to be registered and are registered in the Land Registry, is it permissible to rely on private correspondence and/or internal documents of the immediate parties in ascertaining the subject matter and/or the aim of the transaction for the purpose of interpreting the document?”

7.We do not accept the applicant’s premise which is that the Courts below erroneously relied on such private documents in construing the 2-storey HR. 

8.By far the greater part of the judgments below concerned the question whether the Modification Letter had extinguished the DDH clause in Special Condition 6.  It was in that context that reference was made to certain correspondence with a view to identifying the aim of the application for modification which had led to the ML.  Whether reference to such materials was or was not erroneous is not in issue, since the applicant now accepts that the DDH clause remains in force. 

9.Regarding the 2-Storey HR, DHCJ Sakhrani (at §§73 and 74[3]) held that the ML clearly and unambiguously modified the height restriction only to the extent of permitting the erection of buildings of 3, 4 and 5 storeys built over a car port and not any other types of buildings.  It is self-evident that he reached that conclusion without relying on any extrinsic materials.  The Court of Appeal endorsed his conclusion.    In stating that the ML released the 2-Storey HR “as far as buildings of 3, 4 or 5 storeys were concerned”,[4] it clearly shared his Lordship’s view that the release of the 2-storey HR went no further. 

10.In our view, that construction is plainly correct simply as a matter of language.  In any event, the premise that the courts below reached their decision as to the extent of modification of the 2-storey HR only by erroneously relying on inadmissible correspondence is not made out.  The question framed therefore does not arise and leave was accordingly refused with costs.

Mr Charles Hollander and Mr Justin Lam, instructed by Kao, Lee & Yip, for the Plaintiff (Applicant)

Mr  Eugene Fung SC and Mr Abraham Chan, instructed by the Department of Justice, for the Defendant (Respondent)