Leung Kwok Kau v. Tam So Wa t/a Sun Cheong Electric & Plumbing Co

CACV000027/1968

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO.27 OF 1968

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Coram: Briggs, Mills-Owens & Huggins, JJ.

Date of Judgment: 27 November 1968

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JUDGMENT

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1. On November 28th the Full Court dismissed this appeal stating that reasons for that decision would be given later.

2. The appellant is the owner of the ground floor of certain premises situated at No.297 Queen's Road West. These premises are on the corner of Queen's Road West and Centre Street. The appellant claims that in the month of April, 1964 he leased part of the side wall of these premises, namely part of the wall adjacent to Centre Street, to the respondent for a period of 5 years and 11 months. The respondent has paid him no rent since 1st July, 1967 and this action was brought to recover the arrears of rent which he says he is owed. The appellant also claimed possession of the subject matter of the lease.

3. The District Court Judge found in favour of the respondent on the ground that the agreement between the parties dated 9th April 1964, which was exhibited to the court, was not a lease.

4. The judge held that a necessary ingredient of the subject matter of a tenancy is the demise of part at least of the horizontal area of the premises. In this case there was no such demise, the subject matter of the agreement being a bare wall of the premises.

5. Mr. Martin Lee for the appellant argued that this was wrong. The whole basis of his argument and the sole point taken was that the outer surface of a wall of a building may be the subject matter of a lease. His case was that the agreement to which I have referred above was a lease or an agreement for a lease of "the bare surface" of the outer wall of the premises. And that the intention of the parties entering into that agreement was to confer the exclusive possession of the outer surface of the wall in question upon the respondent. He agreed that a tenancy may be granted of land or any part of land, of a building or any part of a building. And he said that the surface of a building was part of a building and therefore could be the subject matter of a tenancy.

6. I do not think that this is so. It is possible to grant a lease of a wall but that is because a wall is situated on the ground and in effect a lease of a wall is a lease of the ground on which the wall is standing together with the wall itself. However this is not to say that there can be a tenancy of the surface of a wall by itself as was argued in this appeal. I do not think that that is possible. The surface of a wall of its very nature has no depth, it is not standing on any part of the ground: and therefore it canot in my view be the subject matter of a lease.

7. No authority was brought to the attention of the court to state that the surface of a wall could be leased. Several cases which referred to advertisement hoarding were referred to. In Taylor Garnett Evans & Co. v. The Overseers of the Poor of Pendleton⁽¹⁾ it was held that an agreement to allow an advertising agent to erect a hoarding created a tenancy. But the facts of the case show that included in the agreement was the right to take down and remove a wall on the land in question and to erect a hoarding on that land. It is not a case where an advertisement hoarding is to be fixed to the outer surface of a building. Such a case was King v. David Allen & Sons⁽²⁾. The parties agreed in that case that the appellant should have the exclusive right to fix bills to the wall of a certain cinema. The Court refused to hold in the circumstances of that case that this created a tenancy of the outer surface of the wall. And hold that the agreement was no more than a licence.

8. Another case was brought to the notice of the court - Lai Wai v. Chiu Chung⁽³⁾. In that case a section of an outside wall was demised. It consisted of a doorway recessed into the wall which was kept permanently locked. The tenant erected shelves inside this recess and used them for the purposes of trade. It was held that the agreement created a tenancy. This case is easily distinguishable from this appeal. There was no mere demise of the surface of the wall as is here claimed, the subject matter of the demise included a strip of land within the premises of the landlord, which the tenant could enclose and occupy exclusively.

9. Presuming for the moment that it is possible to grant a lease of the mere surface of a wall and turning to the agreement exhibited in this case, it is obvious that it is not a lease of the mere surface of the outside wall of the premises. If it were, it would say as much. The agreement refers to "All that the side wall at the rear part [hereinafter referred to as 'the said premises']". There is a covenant to use these said premises "for water and electrical work business only". And it is agreed that the persons purporting to grant the lease may enter and view the state of repair of "the said premises". It is obvious from those covenants above that this agreement was never intended to be a lease merely of the bare surface of the wall.

10. I do not think that the judge below was quite correct when he held that the agreement was not a lease. And it is at least open to argument that it was an agreement for a lease of same sort. It is certainly not a lease of the mere bare surface of the wall and it would seem that it was not a lease of the wall itself inasmuch as the appellant did not grant exclusive possession, he having support for the said wall himself.

11. Be that as it may the appeal was fought on the sole ground that the parties intended to create a tenancy of the mere surface of the wall. In my view a mere surface of a wall cannot be the subject matter of a tenancy but even if I am wrong, [and I do not think that I am,] the agreement exhibited in this case does not create a tenancy of the mere outside surface of the premises in question.

12. I would dismiss this appeal with costs.

Representation:

Martin Lee (Russ & Co.) Solicitors for Plff./Applt.

Charles Ching (Deacons) assigned as Solicitors for Deft./Respt.

(1) (1887) 19 Q.B.D.288

(2) (1916) A.C. 54.

(3) (33) H.K.L.R. 219

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CIVIL APPEAL NO. 27 OF 1968

Coram: Briggs, Mills-Owens & Huggins, JJ.

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JUDGMENT

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13. In this case the plaintiff appellant and the defendant respondent entered into an Agreement for the letting by the appellant, with the concurrence of his mortgagee, to the respondent of premises described as "ALL THAT THE SIDE WALL" of the ground floor of a certain building in Queen's Road West. A plan was annexed in which two portions of the line of the outer wall of the building, i.e. of the line of the wall adjoining the pavement, had superimposed on them a thick red line; the red colouring was not superimposed over the whole width of the wall; on the other hand the colouring appears to be so spread as to include a fractional portion of the pavement. It is to be observed that the plan is expressed to be annexed "for the purpose of identification". The 'letting' was expressed to be for a term of years at a rent of $250.00 per month. There was evidence that the inner room or rooms on the ground floor of the building were separately occupied as shop premises. The respondent said in evidence that upon the Agreement being entered into she erected a wooden structure adjoining the wall and that previously there had been other stalls against the wall. It is evident that the respondent's structure was erected against the wall and occupied some small width of the pavement - as is a common feature in Hong Kong. The appellant sued for arrears of 'rent', and for 'possession' on the ground of forfeiture for non-payment of the arrears.

14. The form of the Agreement is such as is usually adopted for the creation of a tenancy of part or the whole of a building. It 'demises' the premises and refers to the 'term hereby created'; it contains provisions for payment of the rent 'reserved', for keeping the premises in repair with the landlord having the right to 'enter and view' the state of repair, for prohibiting the erection of any fixtures or partition, for nothing to be done 'in or upon' the premises which might be a nuisance, for prohibiting 'storage' of arms or ammunition, for prohibiting use of the premises for illegal or immoral purposes, and so on. There is a provision for quiet enjoyment, a proviso for re-entry, for distress for rent, yielding up of 'vacant possession' etc. In particular, there are provisions for use of the premises 'for water and electrical work business only', and for the determination of the letting in the event of the Government deciding that 'there is an obstruction on the part of the tenant'.

15. In her statement of defence the respondent pleaded that she had given notice to the appellant that the premises were no longer required and that she had vacated the premises. The appellant in evidence that she caused her structure to be moved a fraction of an inch away from the wall and then continued her business in the structure on the pavement. The learned District Judge took the point whether the Agreement created any tenancy. He referred to the case of Lai Wai v. Chiu Chung⁽¹⁾ where however, as he pointed out, a narrow strip of land within the boundary of the site was included in the letting. In the result the judge held that the Agreement was not a lease; it did not convey to the respondent an estate in any definite parcel of land nor the exclusive right to occupation of any such parcel. He said that he would not conjecture on the possibility of the Agreement being a licence.

16. On the hearing of the appeal, counsel for the appellant confined himself to the narrow contention that the Agreement was valid to create a tenancy of the outer surface of the wall; that the outer surface of a wall was something which could properly be the subject-matter of a lease or tenancy. We gave judgment for the respondent expressly rejecting this argument, but said we would give our reasons more fully in writing.

17. A number of authorities were cited by Mr. Martin Lee for the appellant; for purposes of record, they were:- Stening v. Abrahams⁽²⁾ Taylor, Garnett & Evans v. Overseers of Pendleton⁽³⁾ Lai Wai v. Chiu Chung⁽¹⁾ King v. Allen⁽⁴⁾ Mr. Ching referred the Court to Goldfoot v. Welch⁽⁵⁾ Hope Bros. v. Gowan⁽⁶⁾

18. In my opinion, the case of King v. Allen⁽⁴⁾ is ample authority for the proposition that there cannot be a lease or tenancy of the outer surface of a vertical wall, simpliciter. In the absence of a defined protion of the soil, to which a letting can be distinctly related, no lease or tenancy can arise. Where the subject-matter of an alleged lease or tenancy is but the bare surface, of such a wall, it has no width or breadth of soil to support it, as a lease or tenancy. No estate or interest in land is created; I use the word 'land' in its widest sense. Had the subject-matter but an infinitesimal breadth or width, it would relate not to the landlord's soil but to that of the adjoining property, in a case where the wall is built to the extreme boundary of the landlord's land. The point seems to me to be beyond argument. I would emphasise that this decision is based upon the appeal as it was presented to us. It may be that if the appellant had sought leave to amend in the court below to claim the arrears in the alternative as accruing on a licence he would have succeeded, to the extent of the arrears. Further, it may be that if the case had been presented on the basis that, in the light of the surrounding circumstances, the subject-matter of the Agreement was not limited to the bare surface of the wall, the case would have taken a different turn. The possibility of such an agreement being capable of creating an easement was not argued and I would make no comment on this point.

Representation:

(1) (1949) 33 H.K.L.R. 219.

(2) (1931) 1 Ch. D. at 470.

(3) (1887) 19 Q.B.D. 288.

(4) (1916) 2 A.G. 54 H.L.

(5) (1914) 1 Ch. D. 213.

(6) (1913) 2 Ch. 312.

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 27 OF 1968

(On Appeal from Victoria District Court Action No.3379 of 1968)

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Coram: Briggs, Mills-Owens, & Huggins, JJ.

Date of Judgment: 27 November 1968

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JUDGMENT

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Huggins, J:

19. The notice of appeal alleged a misdirection by the learned judge which led to his holding that the document admitted in evidence was not a lease. The basis of his decision was that the subject matter of the agreement was taken by counsel to be the outer surface of part of a wall of the building. This is not a form of incorporeal hereditament known to the law either in England or in Hong Kong. A corporeal hereditament, as its name implies, has always included an area of the surface of the earth or of some horizontal plane either below, or in a building erected above, the surface of the earth. The area need not be large but it must have some substance. The subject matter of a tenancy need not be in the ownership of the lessor although, if it is not, that is a factor which may tend to show that the parties did not intend to create a tenancy.

20. If the subject matter in relation to which the present parties intended to contract had been an area of land (either within or without the curtilage of the premises owned by the plaintiff) I have no doubt whatever that the agreement should have been construed as a tenancy: Mr. Justice Mills-Owens has listed some of the terms indicative of a lease and it is unnecessary to set out the others. Whether or not it was right in the present case to regard the subject matter as the surface of the wall only is not in issue before us but I wish to make it clear that in my view the phrase "Side Wall" does not necessarily refer merely to the surface of the wall nor even to the substance of the wall itself. No doubt when premises came to be in short supply in Hong Kong every possible space was called into use. Hawkers would rent the spaces between side doors and the street and these became known as "side door premises" and eventually as "Side Doors". It was probably not long before the tenants trespassed upon the pavement, as did the tenant in Lai Wai v. Chiu Chung⁽¹⁾. Again it was a short step to the letting of "side wall premises" or "Side Walls" which were nothing more than stalls erected upon or over a strip of pavement along a wall, a tenancy arising solely by estoppel. In 14 months when sitting as a Tenancy Tribunal I had many such cases and I have ascertained that such cases are still coming before the Tribunals. I venture to think that the cases must be rare indeed where the parties actually intend to contract only in relation to the surface of a wall. This case has been fought on the basis that that was what was intended and for the reasons given by my Lords I agreed that the appeal should be dismissed.

27th November 1968.

(1) (1949) 33 H.K.L.R. 219