Leading Well Ltd v. Secretary for Justice (on behalf of the Director of Lands)
Read the full judgment text of HCA 1266/2019 on BabelCite. This High Court CFI judgment was delivered on 21 October 2022.
1. The plaintiff (“P”) is the owner of (i) Section A of Sub-Section 1 of Section A of Lot No 1469, (ii) The Remaining Portion of Section A of Lot No 1469, and (iii) The Remaining Portion of Lot No 1469 (collectively “P’s Lots”), all sub-divided out of Lot No 1469 (“Lot 1469”) in Demarcation District 189 (“DD 189”), New Territories, Hong Kong.
Cited by 5 cases · Cites 4 cases
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HCA 1266/2019 [2022] HKCFI 3246 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1266 OF 2019 ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ Introduction 1.The plaintiff (“P”) is the owner of (i) Section A of Sub-Section 1 of Section A of Lot No 1469, (ii) The Remaining Portion of Section A of Lot No 1469, and (iii) The Remaining Portion of Lot No 1469 (collectively “P’s Lots”), all sub-divided out of Lot No 1469 (“Lot 1469”) in Demarcation District 189 (“DD 189”), New Territories, Hong Kong. 2.P’s Lots are connected with Tai Po Road (being the main road nearest the lots) by Shatin Heights Road (“Road”), coloured yellow in the agreed site plan appended to this Judgment. 3.P plans to re-develop P’s Lots. There is a dispute between P and the Buildings Department whether P’s Lots qualify as a class A site under Regulation 18A of the Building (Planning) Regulations (Cap 123F). A class A site normally has a higher maximum permitted site coverage and plot ratio – thus a higher re-development potential and value – than an unclassified site. In order to qualify as a class A site, P’s Lots have to abut on one or more than one “specified street”. In the context of this case, the following definition under Regulation 18A(3)(a)(iv) is relevant:
4.P contends that the Road is one such “specified street”. There is no dispute that P enjoys a right of way over the Road. The Buildings Department does not accept that P has been expressly granted a right of way over the Road by or by virtue of an instrument. As such, P’s Lots do not qualify as a class A site. 5.This prompted P to commence this action to seek a declaration that P has been expressly granted, by or by virtue of an instrument, a right of way over the Road exercisable at all times, and such right of way satisfies the requirement under Regulation 18A(3)(a)(iv) above. Facts 6.The following background facts are derived from the agreed brief statement of facts and the documents. 7.By Government Notice No 149 dated 22 January 1953 (“Auction Notice”), notice was given for the sale by public auction on 24 February 1953 of, inter alia, Lot 1469, Lot 1470 and Lot 1471 in DD 189 (collectively, the “3 Lots”), all for “Building & Garden” purpose. 8.Under the Auction Notice:
9.Under GN 364:
10.Upon the public auction on 24 February 1953, the 3 Lots were sold to Hotel Edinburgh Limited (“HEL”) under:
11.By virtue of the Auction Notice and the above New Grants, it was contemplated that buildings for occupation were to be built on each of the 3 Lots and were subject to the requirements set out in the Auction Notice, GN 364 and the New Grants. 12.Additional Special Conditions (d) and (e) in the Auction Notice were repeated as Additional Special Conditions (d) and (e) in New Grant No 8177 for Lot 1470 and required HEL, as the purchaser of Lot 1470, to build the Intended Approach Road. 13.On 11 March 1953, HEL gave notice to the Building Authority of its intention to commence building works for the Intended Approach Road, to be built on Crown land adjoining the 3 Lots. The notice described the purpose of the Intended Approach Road as “private approach”. HEL acknowledged that the Intended Approach Road would be for public use, as stated in its letter to the Tai Po District Office dated 6 August 1953:
14.On 23 March 1953, HEL through its architects submitted to the Government building plans for the Intended Approach Road, which were revised upon comments from the Government. On 14 September 1953, the Government approved the building plans, and notified HEL that a permit would be issued in due course. 15.There is a file note (M.11) dated 21 November 1953 in the records of the Lands Department which stated that a permit no 96/53-54 (“Missing Permit”) had been issued for the Intended Approach Road. The Missing Permit could not be located. The contents of the Missing Permit could be gleaned from a previous file note (M.10) dated 5 October 1953 which reads (as transcribed) as follows:
16.There is no official record as to when construction of the Intended Approach Road was completed. The aerial photographs taken on 18 November 1954 showed a road foundation resembling the Intended Approach Road. That has since become the Road. The parties accepted that it was substantially completed by no later than the end of 1954. 17.A memo by the District Commissioner (New Territories) dated 27 August 1955 recorded that an application for a Crown Lease for Lot 1469 was received. A sunprint of Lot 1469 (“Lot 1469 Sunprint”) was attached. The memo recorded the details of Lot 1469 as including “Right of way … As shown from main Taipo-Kowloon road”, which was depicted in the Lot 1469 Sunprint by a grey line extending from Tai Po Road to Lot 1470 on the west side of Lot 1469. In all likelihood this referred to the Road. 18.In a letter dated 26 October 1957 from the Tai Po District Officer to Johnson, Stokes & Master acting for HEL in the negotiation of the terms of the Crown Leases for the 3 Lots, it was recorded that:
19.A memo dated 28 October 1957 from the Tai Po District Officer to the Registrar General recorded how the above new clause proposed to be included in the Crown Leases for the 3 Lots came about:
20.A further memo dated 23 November 1957 from the Tai Po District Officer to the Registrar General recorded that the issue of the Crown Leases for the 3 Lots “shall be held up until the owner has sub-divided the lots and that the new owners will be asked to take out the Crown Leases for their respective portions”. Eventually no Crown Lease was ever issued. The reason is unknown. That said, by operation of section 14(1) and (2) of the Conveyancing and Property Ordinance (Cap 219), since the New Grants for the 3 Lots were entered into before 1 January 1970, the conditions precedent upon which they had been made were deemed to have been complied with on 1 November 1984 and the Crown (now Government) Leases for the 3 Lots were deemed to have been issued on that date. 21.On 16 June 1985, the Building Authority approved the building plans for the erection of proposed buildings on P’s Lots. 22.On 28 February 2011, P became the owner of P’s Lots by an assignment (“Assignment”) entered with its immediate predecessor-in-title, Ku-Ring-Gai Chase Limited (“Ku-Ring-Gai”). Clause 1(c) of the Schedule to the Assignment described the property conveyed to P as including “such easements and other appurtentant (sic) rights as are more particularly set out and described in the Government Lease and in the Assignment as if the same were incorporated herein and Subject to and with the benefit of all subsisting rights and rights of way”. P’s pleaded case 23.P’s primary pleaded case is that New Grant No 8176 for Lot 1469, on a proper construction and in light of the background facts and documents, is the instrument by or by virtue of which P has been expressly granted a right of way exercisable at all times over the Road. 24.P’s further or alternative pleaded case is that by or by virtue of the instruments, correspondence and documents pleaded in para 11A of the Re-Amended Statement of Claim, P has been expressly granted a right of way exercisable at all times over the Road. 25.Para 11A of the Re-Amended Statement of Claim pleaded a total of 11 such instruments, correspondence and documents:
26.HEL’s letters to the Government and internal documents of the Government not communicated to HEL could not constitute a grant of any right by the Government to anyone. Whilst I would consider them as part of the background materials, the focus of my analysis will be on items (3), (6), (10) and (11) listed in [25] above. 27.P also relied on clause 2 of Schedule B to GN 364 (see [9] above) and contended that the deemed issued Government Lease for Lot 1469 expressly included any easement to Lot 1469 including the right of way over the Road. Such right of way was “assimilated” by and included in the express provision of clause 2 and, from that point onwards, clause 2 itself became the source of the express grant. The right of way was then assigned to P by clause 1(c) of the Schedule to the Assignment. 28.P further relied on the doctrine of lost modern grant,[2] which will be further addressed below. 29.Two other points are of note at this juncture:
New Grant No 8176 for Lot 1469 30.The Grant made no reference to any right of way over the Road or the Intended Approach Road. Had the Government intended to grant any such right of way to HEL, it is inherently implausible for the Government to have omitted to mention it in the Grant – being an important legal and official instrument conferring ownership of Lot 1469 on HEL. 31.P invited the Court to construe the Grant against the Auction Notice. It foreshadowed that the Intended Approach Road would be built. That road would serve not only Lot 1470 (which, amongst the 3 Lots, was the farthest one from Tai Po Road) but also Lot 1469 and Lot 1471 which would otherwise be “land-locked”. As the argument goes, the sale of Lot 1469 must therefore necessarily have included a right of way granted by over the Intended Approach Road. 32.I reject this submission. Whilst the purchaser of Lot 1469 may have a reasonable expectation that the Intended Approach Road would, upon its construction, serve not only Lot 1470 but also Lot 1469, and as such the lot owner would have the right to pass through the Intended Approach Road as the access road connecting its lot to the main Tai Po Road, this could not be translated into an express grant of right of way to HEL under the Grant, which is the focus of this action. 33.The memo dated 28 October 1957 from the Tai Po District Officer to the Registrar General (see [19] above) suggested that no right of way over the Road formed part of the conditions of sale of Lot 1469. That was the reason why a right of way clause was proposed by the Government to be inserted in the Crown Lease for the 3 Lots. 34.When the Grant was executed, the Intended Approach Road did not exist. It was also uncertain when, and whether, it would be constructed by the purchaser of Lot 1470, even though it also happened to be HEL. It is inherently implausible for the Government to have intended to grant a right of way over the Intended Approach Road which did not, and may not ever, exist, with its exact location and alignment being wholly uncertain. 35.P’s case is that the location and alignment of the Intended Approach Road was set out in a site plan attached to the Grant. A copy of the site plan was appended to the Re-Amended Statement of Claim. It was in the same format as the Lot 1469 Sunprint, and had the same grey line depicting what appeared to be the Intended Approach Road. 36.P’s evidence is that the site plan was given to P as part of the title documents from Ku-Ring-Gai. The site plan was placed on top of the Grant and the two documents were stapled together. P did not know who placed the site plan on top of the Grant, why or by whom they were stapled together, or how any of its predecessors-in-title obtained the site plan. 37.There is no site plan attached to the original copy of the Grant kept in the Land Registry, or to the certified copy of the Grant obtained from the Land Registry. The Grant did not refer to any site plan. 38.The tracing (which is a site plan in the same format as the Lot 1469 Sunprint) archived in the office file of the District Lands Office with the Deposit Agreement dated 4 December 1952 (under which HEL applied to buy Lot 1469 and paid a deposit to the Government) had no line showing the location of the Intended Approach Road. 39.The Auction Notice referred to a plan deposited in the Tai Po District Office for inspection by the perspective buyers. No such plan can now be located. Additional Special Condition (d) which applied only to the buyer of Lot 1470 made reference to an approach road to “the lot as shown coloured pink on the deposited plan” – in all likelihood Lot 1470. There is nothing to suggest the Intended Approach Road was depicted. 40.In the circumstances, I find on balance of probabilities that no site plan was attached to, or formed part of, the Grant. 41.In any case, the site plan could not amount to, or be interpreted as, an express grant of a right of way over the Intended Approach Road to HEL. There being a line showing the location of the Intended Approach Road is wholly equivocal. It does not tell anyone: (i) the Government was granting any right to anyone; (ii) the grantee was HEL; or (iii) the subject matter of the grant was a right of way over the Intended Approach Road, which did not exist at that time. If the wording of the Grant is obscure or equivocal, the Court must lean towards the construction most favourable to the Government, unless satisfied that another interpretation of the relevant words in their context is the true one: Earl of Lonsdale v Attorney General [1982] 1 WLR 887 at 901F-G, cited with approval by the Court of Appeal in New Mercury Holding Corporation v Secretary for Justice (CACV 73-74/2013, 15 April 2014) at [14]. 42.Clause 2 of Schedule B in GN 364 does not assist P. It merely provides that the Grant (and any subsequent Crown Lease) to be issued shall include all easements belonging to the lot. It remains the Grant which sets out what such easements were to be granted. 43.For the above reasons, I conclude that no right of way over the Road was expressly granted to anyone by or by virtue of the Grant. Approval of building plans for the Intended Approach Road 44.This category covered letters from the Government to HEL’s architect commenting on and eventually approving the building plans for the construction of the Intended Approach Road. They are items (3) and (6) listed out in [25] above. The short answer is that these letters had nothing to do with granting a right of way over the Intended Approach Road. They were only related to how it ought to be constructed. 45.P argued that item (6) covered the Missing Permit being part of the Government’s “approval” to HEL for the use of the Intended Approach Road. I reject such a contention. The Missing Permit was not pleaded as a source of any express grant. In any event:
Government’s permission to widen the Road 46.This is item (10) listed in [25] above. The originating request from HEL to the Government by letter dated 6 February 1957 (i.e. item (9) in [25] above) was framed in the following terms:
47.No such permit could be located. It is not clear whether any such permit was issued. The internal file records referred to the issuance of an earth permit on 22 February 1957. That apparently related to a separate request from HEL, also by letter dated 6 February 1957, for permission to transport earth away from Lot 1469 and Lot 1470, and was not the pleaded instrument in the Re-Amended Statement of Claim. In any event, even if a permit was issued by the Government to widen part of the Road including a part which fringed on Lot 1469, the permission related to the construction of the Road, rather than any grant of right of way over it. Approval of building plans for P’s Lots 48.This is item (11) listed in [25] above. One fails to see how the Building Authority, which is a department responsible for buildings, was approving anything other than the proposed drawings of the buildings to be erected on P’s Lots, including the items in the Block Plan on the drawings or the labelling of the Road as a “public road” on the Block Plan. 49.In any event, the labelling of the Road as a “public road” on the Block Plan is equivocal, and at most means that no one has the exclusive right to use the Road, which is no doubt true given the Road was built on Crown land. The fact that HEL (any the general public) was allowed to use the Road does not mean the Government was expressing granting a right of way over the Road to HEL or indeed anyone. No modification of Government Lease for Lot 1469 50.This arose from para 12C of the Re-Amended Statement of Claim which pleaded as follows:
51.In light of my conclusion above that there was no express grant of any right of way over the Road by the Government, no modification of Government Lease arises for consideration. In any event, the documents relied upon by P all pre-dated 1 November 1984 which was the date on which the Government Lease was deemed to have been issued. They could not have the effect of modifying the Government Lease. Doctrine of lost modern grant 52.The doctrine of lost modern grant is a legal fiction to presume that where there has been long enjoyment of a right, the right should have a lawful origin. It is a form of acquisition of rights by prescription, separate and distinct from acquisition by express grant. See China Field Ltd v Appeal Tribunal (Buildings) (No 2) (2009) 12 HKCFAR 342 at [41]-[42]. 53.There were no particulars in the Re-Amended Statement of Claim as to how the doctrine was said to be applicable on P’s case. Para 12D pleaded in the following terms:
54.It was only made clearer in P’s written submissions that P is relying on the fact that P and its predecessors-in-title have been using the right of way over the Road uninterruptedly for a continuous period of not less than 20 years, such that an easement over the Road is deemed to arise by virtue of an express grant of easement which has become lost: Laming v Jennings [2018] VSCA 335 at [184]; Tai Sang Feeds Co Ltd & Ors v Sharply Development Ltd [2021] HKCFI 163 at [26]-[27]. 55.Even though P and its predecessors-in-title have been using the Road without interruption since it was built in around 1954, the Road was constructed for use, and was indeed used, by the public: [13] above. No express grant by any instrument was necessary for such public use. 56.The operation of the doctrine of lost modern grant by P’s use of the Road therefore would not give rise to any express grant of a right of way over the Road by or by virtue of an instrument. Disposition 57.P has failed to prove there is any instrument (and the precise term thereof) by or by virtue of which P has been expressly granted a right of way over the Road exercisable at all times. The doctrine of lost modern grant does not operate to create any such express grant in P’s favour. 58.For the reasons set out above, P’s claims are dismissed. 59.I make a costs order nisi that P do pay the defendant’s costs of this action (including all costs reserved, if any), to be taxed if not agreed. Such order is made absolute in the absence of any application by way of summons for variation within 14 days from the date of this Judgment.
Mr Denis Chang SC and Mr Thomas WK Wong, instructed by V Hau & Chow, for the Plaintiff Ms Ebony Ling, instructed by the Department of Justice, for the Defendant
[1] As explained by Ms Yip of the Shatin District Lands Office in her evidence, the plan is neither a setting out plan nor a survey plan, but a sketch as a job summary prepared by the then Crown Lands & Survey Office after completing the setting out survey for Lot 1469 in 1956. The purpose of the sketch was to ascertain the boundary of the lot with the use of the co-ordinates of the boundary stones. It was not a formal survey plan of Lot 1469. In any event, the mere labelling on the sketch of a “right of way” along the position of the Intended Approach Road is equivocal. It was also an internal document which was never communicated to HEL. P’s counsel confirmed at trial that P would not rely on this document as one of the instruments expressly granting P a right of way over the Road. [2] Para 12D of the Re-Amended Statement of Claim also pleaded a right of way granted by “necessity” which presumably referred to an implied grant by necessity. P made no submissions in this regard in its trial opening and closing and is taken as not pursuing this line of argument. |
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