King Lucky Development Ltd and Another v. Niceway Consultants Ltd and Another

HCA 771/2019

[2020] HKCFI 524

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 771 OF 2019

________________________

BETWEEN

________________________

Before:  Deputy High Court Judge Dawes SC in Chambers

Date of Hearing:  1 November 2019

Date of Judgment:  8 April 2020

________________________

J U D G M E N T

________________________

A.  INTRODUCTION

1.This is an application by the plaintiffs (“Ps”, respectively “P1” and “P2”) by way of Summons dated 3 September 2019 for an interlocutory injunction against the defendants (“Ds”, respectively “D1” and “D2”) for an order that they be restrained from causing, procuring or allowing D2’s land situated at what is now Lot No. 3250 SB ss. 43 (“Subject Land”) in Demarcation District 104 (“DD 104”) to be substantially interfered with, in order to enable Ps to exercise a right of way over the Subject Land ( “Present Application”). 

2.The Present Application was brought by Ps on the basis of “reinstating” their earlier application by way of a Summons dated 2 May 2019 for an interlocutory injunction against Ds in relation to the Subject Land (“May Application”), which was adjourned sine die with liberty to restore by Recorder Linda Chan SC upon Ds’ undertaking that they will not “stop, prevent, hinder or otherwise interfere with the free and uninterrupted passage and flow of vehicular and human traffic on and along [the Subject Land]” until judgment or further order of the Court (“Undertaking”).

B.  BACKGROUND

B.1  The Parties

3.P1 is a company incorporated on 31 January 2005, and has been the owner of Lots No. 3235 RP, 3236 RP, 3237 RP, 3238 RP, 3239 RP, 3245 RP, 4658 SA RP and 4664 RP (“P1’s Lands”), all located in DD 104, since 2005.   

4.P2 was incorporated on 8 May 2000 as a building and engineering contractor specialising in site formation, and ground, road, piping and general building and construction works in the New Territories.  It is Ps’ case that P2 had been engaged by P1 to undertake various types of building and engineering works at P1’s Lands since 2005, shortly after P1 acquired the same.      

5.D2 is a company incorporated on 15 January 2018, and acquired the Subject Land on 15 February 2018.  At all material times, D1 was an agent of D2. 

B.2  P1’s Lands and the Subject Land

6.P1’s Lands and the Subject Land are situated within and form part of the ‘Chuk Yuen Village’ (竹園村), a village in the New Territories with a history tracing back to at least 1898.  The two pieces of land are separated by a system of nullahs.  A footbridge exists on the eastern side of the Subject Land (“Bridge”), which has at some point in time been reinforced with steel and concrete over which vehicles have been able to pass. 

7.From the early 1960’s until the early 1970’s, the then-owner of Lot No. 3250 subdivided the lot into a number of parcels and assigned them to various persons, but retained the Subject Land (a long strip of land sandwiched between said subdivisions) designating the same as a right of way for access to and egress from at least some of these subdivisions.

8.In 1974, Kowloon Dairy Limited (“Kowloon Dairy”), the then-owner of Lots No. 3250 SB ss. 2 and 5, surrendered the same together with Lots No. 3225 SB, 3226 SB and 4609 SB (all of which are located within DD 104) to the Government in return for the re-grant of Lot No. 4658.  Shortly thereafter, in around the mid-1970’s, Kowloon Dairy surrendered Lot No. 4609 RP to the Government in return for the re-grant of Lot No. 4664. 

9.Since 1977, there is undisputed evidence that Lots No. 4658 and 4664 were used by Kowloon Dairy as a dairy farm, until they were acquired together with Lots No. 3235 to 3238 and 3245 and their subdivisions (mainly used as cultivation fields/ponds or vegetation areas since 1994) by P1 in 2005.

10.In the meantime, since the late 1970’s, the Subject Land underwent various changes of ownership (first by Canadian Overseas Development Co Ltd, then by its affiliate, Fairland Overseas Development Co. Ltd) until D2 acquired the same on 15 February 2018.

11.The parties are in dispute as to whether the Subject Land had been (i) used as a means of vehicular and human traffic for access to and egress from Lots 4658 and 4664 and their subdivisions since the early 1960’s; and/or (ii) used for vehicular and human traffic for access to and egress from P1’s Lands for a continuous period of not less than 20 years prior to 15 February 2018 (when the Subject Land was acquired by D2), such that a right of way has been established since the early 1960’s, or alternatively, latest by 15 February 2018, which P1 (and its authorised contractor, i.e. P2) was entitled to exercise.

B.3  The May Application

12.In around mid to late March 2019, a metal gate (“Gate”) was erected by Ds on that part of the Subject Land near the Bridge which had the effect of controlling access to and egress from P1’s Lands via the Bridge.  In addition, a system of mesh fence (“System of Fence”) was erected along the northern boundary of the Subject Land situated at the nearside of the nullah. 

13.On around 24 March 2019, notices were placed at the Gate and the Footbridge by D1 (“Notices”) stating that the Gate would be closed from 25 March 2019 onwards.  Accordingly, the Gate was closed on the next day.  By that time, a watchman post had been erected at or near the Gate.

14.It is said that the effect of Ds’ actions was that P2 had since 25 March 2019 been prevented from carrying out construction, building and development works at P1’s Lands, which require regular vehicular access via the Subject Land. Hence, on 2 May 2019, Ps took out the May Application for an interlocutory injunction restraining Ds from “stopping, preventing, hindering or otherwise interfering with the free and uninterrupted passage and flow of vehicular and human traffic on and along the [Subject Land]”. 

15.As mentioned, the learned Recorder adjourned the May Application sine die with liberty to restore at the hearing on 10 May 2019 upon Ds giving the Undertaking.  Consequently, the Gate has been opened since 10 May 2019.

B.4  Events leading up to the Present Application

16.It is common ground that after the hearing of the May Application, Ds continued to maintain and extend the System of Fence, which had the effect of reducing the width of the Subject Land to some extent. 

17.This prompted Ps to demand Ds to remove the System of Fence on the basis that, despite the opening of the Gate, vehicular access to and egress from P1’s Lands were still prevented by the System of Fence, the existence of which per se constituted a breach of the Undertaking.  On the other hand, Ds insisted that they have already fulfilled their Undertaking by opening the Gate. 

18.Upon obtaining a surveyor’s report dated 16 July 2019 (“Ps’ Surveyor Report”) on the history of the System of Fence, Ps took out the Present Application supported by the affirmation of P1’s director.  In response, Ds filed 2 opposing affirmations in response exhibiting their own surveyor’s report, which specifically addresses the issue of what P1’s Lands, the Subject Land and the Bridge were previously used for (“Ds’ Surveyor Report”).

C.  NATURE OF THE PRESENT APPLICATION

19.By the Present Application, Ps seek an interlocutory injunction in terms restraining Ds from:-

“… causing, procuring or allowing [the Subject Land] (on which a right of way has been exercised by [Ps]) to be substantially interfered with inclusive of the continuous maintenance of a system of fence on any part of the said right of way and, insofar as it is necessary to enable the said right of way to be exercised, the removal of the said system of fence within 48 hours of the service of the Order to be granted herein” (emphasis added).

20.In essence, the basis of the application is that Ds have made it practically impossible for “full-sized lorries” to go through the Subject Land to supply building materials to P1’s Lands by reducing its width through maintenance and extension of the System of Fence, in breach of their Undertaking.   

21.Although on its face the Present Application was brought “[p]ursuant to the Order of the Deputy Judge [sic.] L. Chan of 10^th May 2019” for the purpose of “reinstating” the May Application, the Present Application is in substance a fresh application for an interlocutory injunction targeted towards the maintenance and extension of the System of Fence.  By contrast, the May Application was clearly initiated and targeted at the closure of the Gate, which is made amply clear by the supporting affirmation (although it does mention the System of Fence tangentially).  Indeed, at no stage of the May Application did Ps ever ask for the removal of the System of Fence.  

22.The reality is that, as Mr K M Chong accepted on behalf of Ps at the hearing for the Present Application, Ps simply did not anticipate in the course of the May Application that the System of Fence would pose any problems for Ps even after the Gate was opened.  Indeed, that must have been the learned Recorder’s understanding when she made her Order of 10 May 2019 in light of the evidence before her.      

23.As such, the Undertaking provided by Ds in lieu of any injunction that may have been granted against them pursuant to the May Application could not be breached just because Ds continued to maintain and extend the System of Fence per se, in circumstances when the Gate has already been opened since 10 May 2019.  The System of Fence was simply not an issue that was properly investigated during the hearing of the May Application.

24.I will therefore determine the Present Application as though it were a fresh application for an interlocutory injunction.  That being the case, there is no need to deal with the arguments advanced by Mr Kenny Lin (on behalf of Ds) that the bringing of the Present Application was an abuse of process in view that Ps have not commenced any contempt proceedings.

D.  APPLICABLE PRINCIPLES ON INTERLOCUTORY INJUNCTIONS

25.Whilst the interlocutory injunction sought in the Present Application is couched in prohibitive terms, viz. Ds are to be restrained from substantially interfering with Ps’ right of way over the Subject Land, the Court looks at the substance of the remedy sought when determining the application: see Music Advance Ltd v The Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041 at §§8-9 per Ma J (as he then was).

26.In my view, what Ps are really seeking by the Present Application is that the System of Fence be removed to enable Ps to exercise their right of way over the Subject Land.  The interference identified is Ds’ maintenance and extension of the System of Fence, which has reduced the width of the Subject Land such that “full-sized lorries” are unable to pass through.  There is no practical alternative to achieving this end other than removal of the fence.  Indeed, as Mr Chong himself recognised, compliance with the prohibitive injunction sought would necessarily involve removal of the System of Fence. 

27.In this regard, the principles applicable to the grant of an interlocutory mandatory injunction are well-established.  The Court would apply the usual principles in American Cyanamid Co v Ethicon Ltd [1975] AC 696, but modified to require a higher standard of proof in that the plaintiff must show a “strong prima facie case” such that the Court must feel a “high degree of assurance” that at trial it will appear the injunction was rightly granted: Hong Kong Civil Procedure 2020, Vol. 1 at §29/1/29. 

28.That said, the principal concern of the Court at the interlocutory stage is always to take whichever course that appears to carry the lower risk of injustice if it should turn out to be wrong: Music Advance Ltd (supra) at §12(d).    

E.  MERITS OF P’s CLAIM

E.1  Whether P1 acquired a right of way over the Subject Land?

29.In the course of his oral submissions, Mr Chong clarified that Ps would be content to proceed with the Present Application on the basis that the Subject Land had been continuously used for vehicular and human traffic for access to and egress from P1’s Lands for a period of not less than 20 years immediately preceding 15 February 2018 (i.e. when D2 acquired the Subject Land) to establish their right of way (“Alleged Right of Way”).  In other words, Ps are only relying on the acquisition of an easement by prescription in grounding their complaint, as opposed to by express or implied grant. 

30.In Hong Kong, prescription based on the fiction of lost modern grant is the only way by which rights of way may be acquired by long use: China Field Ltd v Appeal Tribunal (Buildings) (No. 2) (2009) 12 HKCFAR 342 at §41 per Lord Millett NPJ.  This means that if the Plaintiff could show that he has enjoyed a right of way for at least 20 years, there is a presumption that a grant of easement has been made by deed but has since been lost: China Field at §§46-47.  Of course, such right must relate to what has in fact been enjoyed by the plaintiff: Dewan v Lewis [2010] EWCA Civ 1382 at §33 per Elias LJ.

31.At this juncture, I note that whilst Mr Lin points out that P1 has not acquired P1’s Lands for more than 20 years and thus could not have acquired any easement by its use of the Subject Land since, Ps are entitled to rely on the doctrine of lost modern grant if they could show that P1 or its predecessors-in-title had had uninterrupted use and enjoyment of the Alleged Right of Way for at least 20 years: Wan Yuk Wing v Wong Kwok Hing Patrick [2009] 5 HKLRD 143 at §43 per Recorder Anthony Chan SC (as he then was).

32.Therefore, the issue I have to decide is whether Ps have made out a strong prima facie case from the evidence that the Subject Land had in fact continuously been used for vehicular and human traffic to access and egress from P1’s Lands for at least 20 years immediately before D2 acquired the Subject Land in February 2018.  In my view, they have not done so. 

33.To that end, Mr Chong relies primarily on aerial photographs of the Subject Land and its surrounding vicinity taken by the Hong Kong Air Force for the period between 1972 and 2018 appended to Ps’ Survey Report, and those taken by the Survey and Mapping Office between 1997 and 2018 (together, the “Aerial Photographs”).  In particular, Mr Chong suggests that some of these photographs show “heavy lorries” running along the Subject Land.

34.Upon examining the Aerial Photos in detail, I do not think that they go so far as to support what Mr Chong contends.  Whilst a few of these photographs appear to show the existence of lorries in P1’s Lands and that vehicles of some sort have been passing along the Subject Land between 1997 and 2018, they certainly do not show continuous vehicular access throughout.  Moreover, Ps have adduced no evidence as to the size and types of vehicles that have accessed the Subject Land, nor how vehicles ended up being inside P1’s Lands.

35.Mr Chong further referred me to what appears to be the latest construction contract (dated 2 January 2018) between Ps in relation to building and engineering works carried out by P2 on P1’s Lands since 2005 for the purpose of re-developing that part of the Chuk Yuen Village.  The contract stipulates that in consideration for P1 paying a basic sum of HK$13 million, P2 would provide services such as demolition works, soil filling, levelling of land, site formation, and the construction of a system of drainage and walls.  From this, Mr Chong invited this Court to infer that a substantial number of vehicles must have been moving in and out of P1’s Lands through the Subject Land in order to transport materials to enable such works to be carried out.

36.I am unable to accept Mr Chong’s submission for a number of reasons.

37.First, as mentioned, there is scant evidence of the nature and extent of vehicular and human traffic on the Subject Land prior to 15 February 2018.  The Aerial Photos for the period from 1997 to 2018 are unclear on this issue.  Indeed, the Notices put up by D1 in around the end of March 2019 only state that the Gate would be closed from 25 March 2019 onwards due to recent unauthorised access by heavy vehicles on the Subject Land.

38.Second, Ps have not adduced any objective evidence corroborating their bare assertion that P2 had continuously been carrying out construction works at P1’s Lands since 2005.  In fact, as pointed out by Mr Lin, the Aerial Photos appear to show that extensive amounts of vegetation had been left to grow on P1’s Lands from 2005 to 2008, and again from 2010 to 2017, suggesting that construction works were not carried out on P1’s Lands during those periods. 

39.Third, there is no evidence before the Court which goes to establishing that the Subject Land had been the only practical means of vehicular access to P1’s Lands, i.e. via the Bridge.  Whilst I appreciate that Ps are not legally required to prove this, the glaring lack of evidence in this regard militates against the Court drawing the inference which Ps now invite it to do.

40.For completeness, and contrary to Mr Chong’s submission, it does not follow from (i) Ds’ purported bare denial in their Defence and Counterclaim of Ps’ plea of the Alleged Right of Way, and (ii) the fact that Ds’ Survey Report does not deal with the aerial photos appended to Ps’ Survey Report, that there is no challenge to the assertion that the Subject Land had been continuously used as a right of way for vehicular and human traffic for at least 20 years.  In fact, Ds’ denial was based on the averment that no material facts or particulars have been pleaded by Ps in support of the Alleged Right of Way, and the focus of Ds’ Survey Report was on a different aspect than that of Ps’ Survey Report. Thus, Ps have simply been put to strict proof of their plea. 

41.Accordingly, I do not agree with Mr Chong that the historical users of P1’s Lands and the Subject Land are irrelevant for the Present Application.  Although this would be an issue for trial, it suffices at this stage to observe that there is uncontroverted evidence contained in Ds’ Survey Report that P1’s predecessor had used P1’s Lands as part of a dairy farm and/or cultivation fields/ponds from 1994 to 2005, and P1’s Lands only became a large site formation area in December 2009.  This tends to militate against Ps’ assertion that the Subject Land had been used for regular vehicular access to and egress from P1’s Lands, including by large vehicles for a large construction project.

E.2  Substantial interference with the Alleged Right of Way?

42.Even if I were wrong on this point and it could be established that P1 had acquired the Alleged Right of Way, it does not follow that Ps have an absolute right to use each and every portion of the easement, but is only entitled to complain of substantial interference by D2, the servient owner: see Lee Tai Property Development Ltd v Incorporated Owners of Leapoint Industrial Building [1996] 1 HKC 193 at 198B-D per Godfrey JA (as he then was).  Hence, there could be no actionable interference with a right of way if it can be substantially and practically exercised as conveniently after as before the alleged obstruction: Page v Convoy Investments Ltd (2015) EWCA Civ 1061 at §41, citing West v Sharp (1999) 79 P&CR 327 at 332 per Mummery LJ.

43.Based on the evidence before me, I am not satisfied that Ds have substantially interfered with the Alleged Right of Way by reducing its width through the continued maintenance and extension of the System of Fence. 

44.To begin with, Ps have adduced no direct evidence as to how wide the Subject Land is, and by how much the System of Fence has reduced its width.  Mr Chong submitted that the reduction is in the order of around 1 to 1.2 meters, referring me to a survey sketch of the Subject Land annexed to Ps’ Survey Report delineating the area taken up by the System of Fence along the nearside of the nullah.  I note the sketch stipulates that the narrowest part of Subject Land located at the Gate has a width of 3.1 meters.  However, the sketch does not quantify the width of the System of Fence, particularly since it overlaps with a slope located at the nearside of the nullah not accessible by vehicles anyway.  Nor could I place much reliance on the one or two photographs annexed to Ps’ Survey Report depicting the System of Fence and the nullah taken only at particular angles during the surveyors’ site visit in April 2019 in preparation of Ps’ Survey Report in order to ascertain the extent of interference.

45.More fundamentally, there is scant evidence of the nature and extent of vehicular traffic (e.g. by “full-sized lorries”) on the Subject Land before the obstruction.  As mentioned, the findings of Ps’ Survey Report make clear that the narrowest part of the Subject Land is located at the Gate, which is 3.1 meters in width, even after taking into account the existence of the System of Fence.  However, Ps’ Report goes on to observe that the general standardised width of a large lorry carrying weight of not less than 30 tonnes is 2.5 meters[1], which means that a standard lorry should have been able to comfortably travel through the Subject Land both before and after the erection of the System of Fence.  Certainly, there is no evidence that lorries exceeding a width of 3.1 meters have been used on the Subject Land at any time.

46.Mr Chong also pointed to photographs taken by Ps’ staff apparently showing that it was difficult for a “full-sized lorry” to travel through the Subject Land without either damaging the System of Fence or the lorry itself.  I derive very little assistance from these photographs, which are mostly taken from the nearside of the System of Fence and thus paint a rather one-sided picture of the state of affairs.       

47.Finally, Mr Chong relies on the cases of Convoy Investments (supra) and Kingsgate Development Projects Ltd v Jordan & Anor [2017] EWHC 343 for the proposition that interference with the normal use and exercise of a right of way amounts to substantial interference.  But these cases were decided on their own facts.  The decision in Convoy Investments depended on the particular manner in which the right of way in question was electronically gated, whilst the relevant gate in Kingsgate was found to constitute a substantial interference with the right of way in question only because it formed part of a trilogy of gates over a length of less than 100m and was thus functionally otiose.

E.3  Conclusion on the merits of Ps’ claim

48.In the premises, I do not feel a “high degree of assurance” on the merits that at trial it will appear that the injunction sought by Ps was rightly granted.  This should be enough to dispose of the Present Application.    

F.  BALANCE OF CONVENIENCE

49.Even if Ps were able to establish a strong prima facie case that P1 had acquired the Alleged Right of Way prior to 15 February 2018 and Ds have substantially interfered with it by the maintenance of the System of Fence so that the resultant reduction in the width of the Subject Land would have made vehicular access by “full-sized lorries” practically impossible, I would still have refused the interlocutory injunction sought. 

50.It is trite that in deciding whether to grant an interlocutory injunction, the Court is entitled to take into account the adequacy of other remedies or forms of protection that are available and any other matters which bear on hardship between the parties: Spry, The Principles of Equitable Remedies (9^th ed., 2014), p. 470.

51.Whilst I appreciate that the Present Application seeks to safeguard P1’s property rights such that an interlocutory injunction should prima facie be granted where it could be established to the requisite standard that the Alleged Right of Way has been substantially interfered with, I am of the view that special circumstances exist that would justify a departure from the general rule: see Billion Star Development Ltd v Wont Tak Chuen [2012] 2 HKLRD 85 at §38 per Thomas Au J (as he then was).

52.In the present case, ex hypothesi, Ps would most probably have been adequately protected by the Undertaking given by Ds, which is framed in broad terms — i.e. that Ds will not “stop, prevent, hinder or otherwise interfere with the free and uninterrupted passage and flow of vehicular and human traffic on and along [the Subject Land]” — capable of covering the acts sought to be enjoined by the Present Application. 

53.I am fortified by the relative triviality of the apprehended injury to Ps caused by the impugned interference by Ds, since Ps could simply resort to using standard-sized lorries (which should be able to comfortably pass through the Subject Land despite the System of Fence) for the purposes of carrying out construction works on P1’s Lands.   

54.For these reasons, the balance of convenience would have fallen in favour of Ds against the granting of the interlocutory injunction sought.    

G.  DISPOSITION

55.In the premises, the Present Application is dismissed. 

56.There will be an order nisi that the costs of the Present Application, including the costs of the hearing, be to Ds, to be taxed if not agreed.

Mr K M Chong and Ms Vivian Li, instructed by CLY Lawyers, for the 1^st and 2^nd plaintiffs

Mr Kenny C P Lin and Mr Chan Kai Ming Daniel, instructed by Howell & Co, for the 1^st and 2^nd defendants