Cheng Sing Keung and Another v. Chan Ka Hay and Others

CACV 326/2021

[2023] HKCA 270

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 326 OF 2021

(ON APPEAL FROM HCA NO 2164 OF 2013)

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J U D G M E N T

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Hon Au JA (giving the Judgment of the Court):

A.  INTRODUCTION

1.The plaintiffs and the defendants (save the 4^th and 12^th defendants) are the respective present and former registered owners of various flats or houses in Eden Garden, a residential estate (“the Estate”) located at No 263 Hang Tau, Sheung Shui, New Territories.

2.The Estate has two gate entrances on either side of the development, which respectively have been referred to by the parties as the Main Gate and the Side Gate.

3.In this matter, the plaintiffs claim that they have rights of way (both pedestrian and vehicular) over the Main Gate and the Side Gate and that their rights were infringed in 2008 and 2013 by some of the defendants. They asked for declarations to those effect and for damages caused by the said infringements. On the other hand, the 12^th defendant, as the management company of the Estate, counterclaims against the plaintiffs for management fees that have been due since July 2008[1].

4.The trial in the court below only concerned the 1^st, 3^rd, 4^th, 8^th, 9^th and 12^th defendants (collectively “the Trial Defendants”) as the plaintiffs had by that time settled with the other defendants. At trial, the Trial Defendants did not dispute that the plaintiffs have a pedestrian right of way over the Main Gate.

5.By way of a detailed judgment dated 28 May 2021 ([2021] HKCFI 1509) (“the Judgment”), Deputy High Court Judge Winne Tsui (“the Judge”) allowed only one part of the plaintiffs’ claims and declared that they have a pedestrian right of way over the Main Gate[2] but dismissed the rest of their claims. She also dismissed the 12^th defendant’s counterclaim for management fees for lack of a proper cause of action.

6.This is the plaintiffs’ appeal against the Judgment. However, it is noted that the Notice of Appeal is only served on the 1^st, 3^rd, 4^th and 9^th defendants but not the 12^th defendant. The plaintiffs have also expressly stated in the Notice of Appeal that the appeal does not involve or concern the 12^th defendant[3]. In other words, the appeal only concerns the 1^st, 3^rd, 4^th, 8^th and 9^th defendants (collectively “the Appeal Defendants”).

B.  BACKGROUND

7.The factual background of the matter has been set out in detail by the Judge at [1] ‑ [109] of the Judgment. The parties have been involved in protracted litigations in various actions since 2008. For the present purposes, we only need to highlight the following.

8.The Estate sits on various plots of land, including Lots 482, 485 and 487 of Demarcation District No 94.

9.In around 2005, the Estate was put up for sale by the developers, Sino Favour Development Limited (“Sino Favour”) and Shiny Develop Limited (collectively “the Developers”). The Developers had produced a brochure (“the Sale Brochure”) in relation to the sale of the properties in the Estate. It is a self-contained residential property development of 10 blocks of small village houses. Each house was built on a different sub‑lot of Lot 482. When the Estate was put up for sale, the sub-lots were owned by different individuals (collectively “the Original Individual Sellers”), who in turn assigned their respective legal titles of the land to the purchasers of the houses or flats in the Estate. Each house has its own deed of mutual covenant, but no deed of mutual covenant was put in place for the Estate as a whole.

10.To better understand the contentions raised by the parties and the Judgment, it is convenient to refer to the physical layout of the Estate as shown on an agreed colour plan of the Estate (“the Plan”), which was attached to the Judgment. As with the Judge, we have also attached to this judgment the Plan. We will further adopt the Judge’s descriptions of the physical layout of the Estate as shown in the Plan as follows.

11.The Estate is enclosed by boundary walls, which appear as the thick orange line in the Plan. It has two entrances, the Main Gate and the Side Gate. They are marked in blue. There are ten village-style houses, known as “House 1” to “House 11” (there being no “House 4”). Each house has three floors. There are 30 flats in total in the Estate.

12.The area coloured yellow and the area coloured yellow and shaded in black are referred to as “the Main Road” and “the Side Road” respectively in the trial. They are respectively the roads connecting the Main Gate and the Side Gate to the houses in the Estate.

13.The Main Gate is built over Lots 482O, 482P and 485RP. It is made up of three parts: two pedestrian access gates on each side (“Main Pedestrian Gates”) and a vehicular access gate in the middle[4]. The Main Pedestrian Gates were originally locked by keys, which later were changed to a door lock system from March 2008 requiring a passcode to open them. Since July 2013, the door lock system was changed to a smart card system requiring a smart key card to gain access.

14.The Main Gate leads to the Main Road which is made up of Lots 482O, 482P, 482M, 482RP, 485RP, 485B and 487A. The Main Road (save a small part which is government land) was owned by Sino Favour at the time of the development of the Estate and eventually by the 4^th defendant since September 2013.[5] In the Sale Brochure, the words “消防通道” were marked on the part of the Main Road near the Main Gate. It further stated: “園內備有充足車位供住戶及訪客使用”. There are at present 21 car park spaces designated on the Main Road[6].

15.The Side Gate straddles Lots 482D and 482G. This gate leads to the Side Road which is made of portions of Lots 482D, 482E, 482G and 482H, where Houses 6, 7, 3 and 5 are respectively situated. The Side Road was owned by the respective owners of Houses 3, 5, 7 and 6. Since 2009, the Side Gate has been locked.

16.In the Judgment, the Judge refers to the Main Road and the Side Road together as “the open area”. It is not referred to as “the common area” of the Estate because unlike many other residential estates in Hong Kong, the area is not co-owned by the flat owners as a whole, and remained under separate “private” ownership at all material times.

17.On 1 August 2005, a Deed of Grant of Right of Way (“the 2005 Deed”) was executed between the then owners of Lots 482D (House 6), 482E (House 7) and 482G (House 3) as grantors and Sino Favour as grantee, granting a right of way to Sino Favour over the front portion of the three lots which made up the Side Road. The specific circumstances in which the 2005 Deed was executed are not known.

18.In January 2006, the plaintiffs purchased the roof and a flat on the 2^nd Floor of House 7. The plaintiffs said before they purchased the properties, they were given the Sale Brochure and had inspected the Estate in person.

19.Shortly thereafter, disputes arose between the owners and the Developers in relation to the parking rights within the Estate. In March 2006, Sino Favour announced that it would commence building works for Eden Garden Phase 2 (“Phase 2”) at the east of the Estate, and that some of the parking spaces within the Estate would be cancelled and part of the boundary wall would be demolished and replaced by an iron gate so as to allow access for construction vehicles to go to the new site through the Estate. In May 2006, the contractor for Phase 2 excavated the land at part of the boundary wall and installed an iron gate.

20.In June 2006, the then co-owners of all the houses formed a Mutual Aid Committee of Eden Garden Owners (“MAC”)[7]. At that time, the 1^st plaintiff was the chairman of the MAC. In July 2006, the MAC signed a management agreement (“the 2006 Management Agreement”) and appointed the 12^th defendant as the manager of the Estate.

21.In August 2006, the contractors for Phase 2 damaged some properties within the Estate. The passages inside the Estate were also blocked.

22.Eventually on 17 August 2006, the MAC and the contractors of Phase 2 reached an agreement, inter alia, not to block the passages within the Estate.

23.Subsequently, on 25 October 2006, a Deed of Grant was executed between Sino Favour as grantor and all the then co-owners of the houses as grantees (“the 2006 Deed”). In gist, Sino Favour granted a right of way over Lots 482P and 485RP (where the carparks are located) together with other plots of land outside the Estate for the purpose of ingress and exit from the ten plots of land over which the ten houses of the Estate were built. Again, the exact circumstances in which the 2006 Deed was executed was not known.

24.In relation to the disputes between the Developers and the owners, the opinions of the owners were divided as to how to handle the matter. Whilst some owners (including the 1^st, 3^rd, 8^th and 9^th defendants) wanted to take legal action against the Developers, others (including the plaintiffs) preferred not to. The plaintiffs were concerned about the litigation costs in the event that the owners lost in the litigation.

25.Amidst such disputes, on 21 July 2007, the 1^st plaintiff gave notice that he would step down as chairman of the MAC and the plaintiffs also ceased to be members of the MAC on 22 July 2007. The plaintiffs did not pay the management fees in April to June 2006 and since September 2007.

26.In November 2008, in view of the continuous interruption due to the construction works in Phase 2, some of the owners commenced an action against the Developers in HCA 2457/2008 over the use and enjoyment of the open area. That was followed by an action by Sino Favour against some of the owners in HCA 218/2009 in the following year. These two actions were eventually settled in July 2012, which led to the transfer of the plots of land making up the Main Road to the owners involved in the litigation. These owners eventually incorporated the 4^th defendant and assigned the Main Road to it in September 2013.

27.In the meantime, since the installation of the passcode door lock system in March 2008, the plaintiffs said that they were not provided with the passcode by some of the defendants and only managed to obtain the passcode from friendly neighbours to gain access into the Estate through the pedestrian part of Main Gate (“the 2008 Incident”).

28.In November 2008, some other owners brought a claim in the Small Claims Tribunal against the plaintiffs claiming outstanding management fees and repair contribution. The Tribunal held after trial that the plaintiffs ceased to be a member of the MAC by notice and they should pay outstanding management fees prior to the termination. The Tribunal was of the view that the plaintiffs decided to opt out of the MAC and not to pay the management fees not because they wanted to obtain benefit without paying for it, but was out of their genuine belief that the MAC did not have any legal basis for their claims against the Developers (“the Small Claims Tribunal Decision”). The plaintiffs had settled those outstanding fees as ordered[8].

29.The passcode door lock system was later replaced by a smart key card system in July 2013. On 21 July 2013, a meeting of the MAC was held which was attended by, amongst others, the 1^st, 3^rd, 8^th, 9^th defendants and the 12^th defendant’s representative. At the meeting, it was resolved that the key cards would not be issued to those in default in paying the management fees, unless the defaulting owners settled all the outstanding fees. It is the plaintiffs’ case that despite repeated demands, the MAC and the 12^th defendant refused to issue a key card to them and they had to ask their friendly neighbours to open the gate for them on ad hoc basis whenever they returned home (“the 2013 Incident”).

30.The plaintiffs later commenced the present action against all the defendants in November 2013. The action is primarily about the rights of way over the Main Gate and the Side Gate.

31.The dispute over the Main Gate concerns the 1^st, 3^rd and 4^th defendants:

(1)  The 1^st defendant has been one of the registered owners of the ground floor flat of House 1. The 3^rd defendant was the former registered owner of the second floor of House 9. The 1^st and 3^rd defendants were at one time the registered owners of Lot 485RP who later transferred the ownership to the 4^th defendant in September 2013[9].

(2)  The 4^th defendant was incorporated in February 2013. There are 21 shares allotted. One share is allotted to each owner who is assigned to use one car parking space in the Estate. The 1^st defendant is a shareholder. The plaintiffs are not shareholders of the 4^th defendant.

32.The dispute over the Side Gate concerns the 8^th and 9^th defendants. They are the co-owners of House 6.

33.After the commencement of these proceedings, on 15 November 2013, at a hearing before Mimmie Chan J dealing with an interlocutory injunction application by the plaintiffs, the defendants gave an undertaking that they would provide three access smart key cards to the Pedestrian Main Gates to the plaintiffs upon the plaintiffs paying HK$150 deposit to the solicitors for the defendants. The smart key cards had since been provided to the plaintiffs. In other words, the plaintiffs have since been having access to the Estate through the Pedestrian Main Gates.

C.  THE JUDGMENT

34.As mentioned above, the trial of the action before the Judge only concerned the Trial Defendants.

35.The plaintiffs’ case before the Judge was effectively that:

(1)  Insofar as the Main Gate is concerned, by virtue of the 2006 Deed, an implied grant by the Developers, the doctrine of necessity, implication of law and / or proprietary estoppel, the plaintiffs are entitled to both pedestrian and vehicular rights of way over it (this dispute concerns the 1^st, 3^rd and 4^th defendants);

(2)  Insofar as the Side Gate is concerned, by virtue of the 2005 Deed, an implied grant by the Developers, necessity, implication of law and / or proprietary estoppel, the plaintiffs are entitled to both pedestrian and vehicular rights of way over the Side Gate (this dispute concerns the 8^th and 9^th defendants); and

(3)  By refusing to provide the plaintiffs with the passcode in 2008 and the smart card key in 2013, the Trial Defendants had substantially interfered with the plaintiffs’ enjoyment of the said rights of way.

36.The plaintiffs thus sought various declarations to the effect that they are entitled to pedestrian and vehicular rights of way over Lot 485RP (where the Main Gate is predominately located) and portions of Lots 482D and 482G (where the Side Gate is located), and that the Trial Defendants had substantially interfered with the said rights of way by reason of the 2008 and 2013 Incidents. The plaintiffs further sought an injunction restraining the Trial Defendants from interfering with their reasonable enjoyment of the said rights of way and an order that the Trial Defendants do provide the key cards to the Main Gate and the Side Gate to the plaintiffs. They also sought damages against the Trial Defendants.

37.The Trial Defendants denied the claims. The 12^th defendant further counterclaimed against the plaintiffs for outstanding management fees and expenses.

38.The Judge identified the following issues to be tried at [7] of the Judgment:

(1)  whether the plaintiffs have rights of access over the Main Gate and the Side Gate and, if so, whether the access covers both pedestrian and vehicular access;

(2)  whether their rights were infringed by reasons of the alleged 2008 and 2013 Incidents; and

(3)  whether the plaintiffs are liable to pay management fees since July 2008.

39.In the Judgment, the Judge first made the following relevant factual findings on the evidence:

(1)  The plaintiffs had been given the Sale Brochure and had inspected the Estate in person prior to their purchase: [150] of the Judgment.

(2)  The 2006 Management Agreement was not wholly superseded by a subsequent management agreement or agreements and the relevant provisions relied on by the 12^th defendant in support of the counterclaim remained in effect: [152] of the Judgment.

(3)  The Judge held that the 2008 Incident was not established on the evidence as there was no or no credible evidence from the plaintiffs to show that the plaintiffs had asked any of the Trial Defendants (including the 12^th defendant) for the door code as alleged: [153] of the Judgment.

(4)  As to the 2013 Incident, the 1^st, 3^rd, 8^th and 9^th defendants all voted in favour of the resolution that the key card to the pedestrian gate would not be issued to the plaintiffs unless they settled all the outstanding management fees: [154] of the Judgment.

(5)  In respect of the 12^th defendant’s counterclaim, although the Judge accepted the evidence adduced by the Trial Defendants (except the 1^st defendant) that the plaintiffs had not paid any management fees and expenses since (at least) July 2008, she found that there was no written authorisation given by the owners to the 12^th defendant to counterclaim against the plaintiffs in respect of the outstanding management fees and expenses: [155] of the Judgment.

40.The Judge then went on to reject the plaintiffs’ claim for a vehicular right of way over the Main Gate for the following reasons:

(1)  For the claim based on proprietary estoppel, the Judge concluded that the physical condition of the Estate and the statements in the Sale Brochure as relied on by the plaintiffs did not amount to unequivocal representations made by the Developers that the owners would be given a right to pass the Main Gate with vehicles: [157] ‑ [161] of the Judgment.

(2)  For the claim based on an implied grant, the plaintiffs’ case was dependent on their fundamental assertion that the entire Lot was in fact beneficially owned by the Developers as the Original Individual Sellers were “Dings” acting as the Developers’ trustees or agents. However, as the Judge refused to allow the plaintiffs to run this unpleaded case of “Dings”, which was only raised in their closing submissions, this underlying fundamental premise was simply not established, and the plaintiffs’ claim based on implied grant must also fail: [34] and [162] ‑ [163] of the Judgment.

(3)  For the claim based on the 2006 Deed, on a proper construction, the deed did not grant such a vehicular right to the plaintiffs: [164] ‑ [166] of the Judgment.

(4)  For the claim based on necessity, as there was no dispute that the owners do have a pedestrian right of way over the Main Gate to access their respective homes, there is simply no necessity for vehicular access in the circumstances: [172] of the Judgment.

41.In respect of the right of way over the Side Gate:

(1)  The Judge rejected the plaintiffs’ claim based on proprietary estoppel, the doctrine of implied grant and necessity for essentially the same reasons in rejecting the claim relating to the Main Gate: [167] ‑ [168] and [172] of the Judgment.

(2)  As to the 2005 Deed, the Judge held that, on a proper construction, the grant of right of way by the grantors was made only to Sino Favour as the grantee and did not amount to the granting of any fresh rights of ways amongst the grantors themselves at the same time as contended by the plaintiffs: [169] ‑ [170] of the Judgment.

42.The Judge also rejected the plaintiffs’ claim in relation to the 2008 and 2013 Incidents:

(1)  As the Judge had rejected the factual assertion that the 1^st, 3^rd, 8^th, 9^th and 12^th defendants were involved in not giving the door code to the plaintiffs in 2008, the plaintiffs’ claim as to the 2008 Incident fell away: [173] of the Judgment.

(2)  In respect of the 2013 Incident, although the plaintiffs were unable to access the Estate via the Main Gate by reason of the MAC resolution, the Judge held that the plaintiffs’ inability to do so was self‑induced, as the provision of the smart key card was part of the management services but the plaintiffs had failed to pay the management fees. The passing of the resolution by the MAC not to provide them with the smart key card until the plaintiffs had settled the outstanding fees was therefore justified and did not amount to an interference with the plaintiffs’ enjoyment of the right of way over the Main Gate: [173] ‑ [178] of the Judgment.

43.Finally, in respect of the 12^th defendant’s counterclaim for outstanding management fees and expenses, although the Judge found that the plaintiffs were liable to pay the outstanding management fees and expenses, the Judge held that the 12^th defendant did not have proper authority to bring the claim against the plaintiffs as it had not obtained the written authorisation from the owners to do so in accordance with the 2006 Management Agreement. She therefore rejected the counterclaim for lack of a proper cause of action: [179] ‑ [184] of the Judgment.

44.Accordingly, the Judge made the declaration that the plaintiffs and their assigns, successors-in-title and their tenants together with their servants and licensees do have a pedestrian right of way over the Main Gate located in Lots 485RP, 482P and 482O[10] and dismissed the rest of the plaintiffs’ claims and the 12^th defendant’s counterclaim. She also ordered that the 1^st defendant’s costs of the action be borne by the plaintiffs, and that there be no order as to costs of the action between the plaintiffs and the rest of the Trial Defendants.

D.  THE APPEAL

45.In the Notice of Appeal, the plaintiffs have advanced various grounds of appeal which fall under three issues. They are:

(1)  The Judge ought to have held that the plaintiffs enjoyed both vehicular and pedestrian access over the Side Gate on the grounds of proprietary estoppel; the 2005 Deed; implied grant; necessity and / or section 16(1) of the Conveyancing and Property Ordinance, Cap 219 (“the CPO”)[11]. (“the Side Gate Issue”)

(2)  Likewise, the Judge ought to have held that the plaintiffs also enjoyed vehicular access in addition to pedestrian access over the Main Gate on the grounds of proprietary estoppel; the 2006 Deed; implied grant; necessity and / or section 16(1) of the CPO[12]. (“the Main Gate Issue”)

(3)  The Judge ought to have held that the Appeal Defendants had interfered with the plaintiffs’ right of way over the Main Gate. The Judge erred in law in holding that there was no interference as the plaintiffs had failed to settle the alleged outstanding management fees and expenses[13]. (“the Interference Issue”)

46.The plaintiffs seek the following orders in this appeal:

(1)  a declaration against the Appeal Defendants that the plaintiffs and their assigns, successors‑in‑title and their tenants together with their servants and licencees do have a pedestrian and vehicular right of way over (a) the Main Gate located in Lots 485RP, 482P and 482O; and (b) the Side Gate located in Lots 482D and 482G. The vehicular right includes the right to stop vehicles in order to turn them round and to load and / or unload goods or passengers.

(2)  a declaration that the Appeal Defendants have substantially interfered with the plaintiffs’ right of way over the Main Gate and the Side Gate.

(3)  an injunction restraining the 4^th defendant and the 12^th defendant whether by themselves (whether alone or jointly), their agents, servants or otherwise howsoever from interfering the plaintiffs with their rights of way over the Main Gate and the Side Gate.

(4)  the Appeal Defendants do pay the plaintiffs HK$70,000 as damages for nuisance, breach of grants and / or conspiracy to injure by illegal means.

(5)  the Judge’s order that the rest of the plaintiffs’ claim be dismissed be set aside.

47.We will look at each of these issues in turn.

E.  DISCUSSION

E1.  The Side Gate Issue

48.As mentioned above, this issue concerns the 8^th and 9^th defendants. Under this issue, the plaintiffs in the appeal challenge all of the Judge’s rejections of their claim based on the 2005 Deed, proprietary estoppel, implied grant and / or necessity.

E1.1  The 2005 Deed

49.It is the plaintiffs’ case before the Judge that the plaintiffs and their predecessors in title have been granted a right of way (both vehicular and pedestrian) over the Side Road by the 2005 Deed. As mentioned earlier, the Side Road is made of portions of Lots 482D, E, G and H, where Houses 6, 7, 3 and 5 are respectively situated.

50.As a recap, the 2005 Deed was made between the then owners of Lots 482D (House 6), 482E (House 7) and 482G (House 3) as grantors and Sino Favour (the developer) as grantee. See: paragraphs (1) and (2) of its Recitals.

51.It is also useful to set out the recital and material terms of the 2005 Deed in full as follows:

“WHEREAS:-

…

(3) The Grantors have and each of the Grantors has agreed to grant the Grantee such right of way as is hereafter contained.

NOW THIS DEED WITNESSETH as follows:

1. The Grantors and each of the Grantors as beneficial owners or owner of the servient tenements hereby grant or grants unto the Grantee full right and liberty for the Grantee and its successors in title the owners and occupiers for the time being of the dominant tenements or any part thereof and its or their respective servants and licensees (in common with the Grantors and all others having the like right) at all times hereafter by day or night to pass and repass along over and upon the servient tenements which for identification are more particularly set out in the plans attached hereto and thereon coloured Yellow hatched black and marked “HY” with or without vehicles and with or without animals for all purposes connected with the use and enjoyment of the dominant tenements but not for any other purpose whatsoever to hold the said right of way unto to Grantee for the residue of the terms of years of the Government Lease in relation to the servient tenements.

2. The Grantee is entitled to grant a licence for the use of the servient tenements for the said purpose of pass and re-pass over the servient tenements to the occupiers of SUB‑SECTION 1 OF SECTION B OF LOT NO. 482, SUB-SECTION 1 OF SECTION C OF LOT NO. 482, SECTION F OF LOT NO. 482, SECTION K OF LOT NO. 482, SECTION L OF LOT NO. 482 and SECTION J OF LOT NO. 482 all in DEMARCATION DISTRICT NO. 94, NORTH, NEW TERRITORIES.” (Emphases added)

52.It is the plaintiffs’ contention in the court below that on proper construction of its material terms in context, the 2005 Deed amounted to also a mutual grant of right of way amongst the grantor themselves over all the servient tenements (ie, Lots 482D, 482E and 482G).

53.However, the Judge held that, properly construed, the 2005 Deed did not amount to such a mutual grant as contended. She explained her reasons at [169] ‑ [170] of the Judgment as follows:

“169. As a further alternative, the plaintiffs rely on the 2005 Deed. They contend that as a matter of construction, there was a mutual grant of right as between the grantors and the grantee under the deed. See paras 43 to 44 above.

170. I do not agree that that is a proper construction of the deed. I accept Mr Ho’s [the Defendants’ counsel] submission that the grant was a grant to Sino Favour only. It is reasonably clear from the language used in the deed as a whole that that was the case. Para 3 of the Recital referred to a grant to ‘the Grantee’, which was defined as Sino Favour. It did not make any reference to the owners of Lots 482D, 482E and 482G also being the grantees. It is thus clear that when it was provided in para 1 that the grantors were granting the right to the grantee ‘in common with the Grantors’ to ‘pass and repass… the servient tenements’, the provision was to the effect that the rights to pass and repass was to be enjoyed by the grantee in common with the respective grantors. The effect was not to grant fresh rights on the grantors which they had not enjoyed prior to the execution of the deed.” (Emphasis added)

54.In essence, the Judge was of the view that, properly understood, the phrase “in common with the Grantors and all others having the like right” only means that each of the grantors was granting the right of way over his respective land (ie, his part of the entire subservient tenements) to the grantee alone (ie, Sino Favour and its licensees), which right was to be used by the grantee together with the respective grantor himself. The phrase does not mean (as contended by the plaintiffs) that each of the grantors was also at the same time by this deed granting among themselves a right of way over his respective land to the other grantors so that each of them could also pass and repass over the other grantors’ lands.

55.Mr Chong (together with Mr Yeung[14]) for the plaintiffs now submits that the Judge erred in her construction. Counsel contends that this phrase has expressly provided for a mutual grant at the same time amongst all the grantors, and the Judge’s construction would lead to absurdity that the Developers did not intend to allow the residents of Lots 482D, 482E and 482G to use the Side Road and the Side Gate even on foot. The Judge’s construction would also result, says Mr Chong, in an artificial truncation of the roads within the Estate.

56.The general principles on construction of a document are well established and not in dispute. As concisely summarised by Lam VP (as he then was) in黎偉雄 對 信和物業管理有限公司 [2020] HKCA 448 at [26] (footnotes omitted):

“In a nutshell, the DMC must be construed in the context of the document as a whole and in light of the factual and legal background (which also provides the context) to its execution, and having regard to the practical objects which it was intended to achieve. The overriding objective in construction is to give effect to what a reasonable person would have understood the parties to mean. Instead of focusing on the ordinary and natural meanings of a few words in a clause, very often the broader context provides surer guide. But textual analysis and contextualism are both tools in the exercise of construction and the utility of each tool will vary according to the circumstances of each instrument. Thus, construction is a unitary exercise involving an iterative process.”

See also Sino Channel Holdings Ltd v Vast Faith Investment Ltd [2020] HKCA 311 at [19] ‑ [21].

57.Bearing these principles in mind, with respect, we are unable to agree with the Judge’s conclusion. In our view, properly construed, the 2005 Deed amounts to an acknowledgment therein by the grantors (the then respective owners of Lots 482D, E and G) and the grantee (Sino Favour) of the fact (or state of affairs) that the grantors themselves had been having a right of way over their lands as a whole before the deed. Our reasons are as follows.

58.First, this is borne out by the plain meaning of the words used in paragraph 1 of the 2005 Deed:

(1)  Paragraph 1 states relevantly: “The Grantors and each of the Grantors as beneficial owners or owner of the servient tenements hereby grant or grants unto the Grantee full right and liberty for the Grantee and its successors in title the owners and occupiers for the time being of the dominant tenements or any part thereof and its or their respective servants and licensees (in common with the Grantors and all others having the like right) at all times hereafter by day or night to pass and repass along over and upon the servient tenements…”:

(2)  The “right of way” that was granted under the deed by the grantors was the right to “at all times hereafter by day or night to pass and repass along over and upon the servient tenements”, which must be referring to the entire servient tenements (ie, Lots 482D, E and G).

(3)  At the same time, it is also expressly provided that the grantee was to exercise that right “in common with the Grantors and all others having the like right” (emphasis added). The “like right” as a matter of language and context plainly must also be referring to the same right of way that was granted to the grantee by way of the Deed, which was the right to pass and repass over the entire servient tenements. The “like right” could not have been intended to mean each grantor’s own right to “pass and repass” over his own piece of land, as this is simply entirely unnecessary. In other words, the whole phrase properly and objectively read is intended to mean that the grantors were granting to the grantee the right of way to pass and repass at all times over the entire servient tenements, which was subject to the similar right that had already been enjoyed by the grantors themselves.

(4)  As rightly pointed out by the Judge, given that the deed was intended to grant the right of way to the grantee (ie, Sino Favour), the bracketed phrase in paragraph 1 of the deed therefore amounts to an acknowledgment by both the grantors and grantee of the fact that the grantors themselves had been enjoying the “like right” to pass and repass over the entire servient tenements before the 2005 Deed.

59.Second, the fact that the original grantors as owners of Lots 482D, E and G had been enjoying right of way over each other’s land in front of each of their houses prior to the deed is also consistent with the factual context that these servient lots made up the Side Road which forms the front road passing Houses 3, 6 and 7 (see the Plan). It would be against common and practical sense that the respective owners of these houses were not given the right to pass and repass over each other’s front land (through the Side Road) to facilitate access to their respective homes.

60.Further, as the 8^th, 9^th defendants and the plaintiffs are the respective successors in title of the original grantors, by the operation of the doctrine of estoppel by deed, the 8^th and 9^th defendants are estopped from contending that the plaintiffs are not entitled to a right of way over the portions of the Side Road which were owned by the individual grantors.

61.In this respect, is also clear from the express words of the 2005 Deed that the right of way included both vehicular and pedestrian access, as it has provided that “full right and liberty” was granted by the grantors to Sino Favour “at all times… by day or night to pass and repass along over and upon the servient tenements… with or without vehicles and with or without animals for all purposes connected with the use and enjoyment of the dominant tenements…” (emphases added). In the premises, the right of way that has been enjoyed by the grantors prior to the execution of the 2005 Deed is a pedestrian and vehicular right of way.

62.For these reasons, although the Judge was correct in holding that the effect of the phrase “in common with the Grantors and all others having the like right” is “not to grant fresh rights on the grantors which they had not enjoyed prior to the execution of the deed” (emphasis added), in further dismissing this part of the plaintiffs’ claim, she was wrong to have further impliedly held or concluded that merely because there was no fresh right mutually granted to the grantors under the 2005 Deed, the grantors had not enjoyed any right of way (whether pedestrian or vehicular) over the Side Gate and the Side Road prior to the execution of the deed.

63.In relation to this, Mr Ho for the 8^th and 9^th defendants has raised the objection at the hearing that the above construction was never part of the plaintiffs’ case in the court below or in the Notice of Appeal, and is only raised by this court[15]. He submits that the defendants would suffer prejudice if this is allowed to be relied upon by the plaintiffs now as they are deprived of the opportunity to adduce evidence that might be relevant to this issue.

64.With respect, we are not persuaded by Mr Ho. If, as Mr Ho has contended, there exists such evidence which would show that the grantors had not enjoyed any prior right of way amongst themselves over their lands before the execution of the 2005 Deed, it is difficult to understand why the Trial Defendants had not produced such evidence at trial, as such evidence would also be relevant to rebut the plaintiffs’ case on proprietary estoppel and implied grant. When further asked by this court, Mr Ho has not been able to specify what such evidence might be. In the premises, we are not convinced that the 8^th and 9^th defendants would be materially prejudiced if the plaintiffs are now permitted to rely on this construction of the 2005 Deed (which is a question of law) in this appeal.

65.Accordingly, for the above reasons, the Judge erred in finding that the plaintiffs do not have a right way of way (whether by vehicle or on foot) over the Side Road and the Side Gate by reason of the 2005 Deed. On this basis alone, we will allow the appeal insofar as the Side Gate is concerned.

E1.2  Proprietary estoppel, implied grant, necessity and section 16(1) of the CPO

66.The plaintiffs also submit that the Judge erred in rejecting the plaintiffs’ claim based on proprietary estoppel, implied grant, and / or necessity. Mr Chong has raised a number of contentions in support of these parts of the appeal.

67.However, given our above conclusion on the 2005 Deed, it is unnecessary for us to consider these other bases raised by the plaintiffs to found the right of way over the Side Gate.

68.In any event, the plaintiffs have also relied on similar arguments in support of their appeal under the Main Gate Issue regarding the claims based on proprietary estoppel, implied grant, necessity and section 16 of the CPO. It will thus be more convenient for us to deal with those submissions when we consider the Main Gate Issue, which we will now turn to. In the premises, if necessary, our conclusions below in relation to these arguments will apply mutatis mutandis to the Side Gate Issue.

E2.  The Main Gate Issue

69.The Main Gate Issue concerns the 1^st, 3^rd and 4^th defendants. The plaintiffs contend that the Judge had erred in each of her determinations in rejecting the plaintiffs’ claim based on the 2006 Deed, proprietary estoppel, implied grant, necessity and section 16(1) of the CPO.

E2.1  The 2006 Deed

70.The 2006 Deed was executed on 25 October 2006 with Sino Favour as grantor and all the then co-owners of the houses of the Estate as grantees.

71.The material terms of the 2006 Deed are as follows:

“WHEREAS:-

A. The Grantor is the registered and beneficial owner and in possession of the property as more particularly described in the Third Schedule hereto (‘the 1^st Property’).

B. The Grantee is the registered and beneficial owner and in possession of the property more particularly described in the Fourth Schedule hereto (‘the 2^nd Property’).

C. At the request of the Grantee, the Grantor has agreed to grant to the Grantee the right to use a portion of the 1^st Property in manner hereinafter contained.

NOW THIS DEED WITNESSETH AS FOLLOWS :-

1. The Grantor hereby grants unto the Grantee a full and uninterrupted right and liberty for the Grantee and his successors in title and assigns the owners and occupiers for the time being of the 2^nd Property or any part or parts thereof and his tenants servants and licensees at all times hereafter by day or night to use and enjoy ALL THAT the PORTION of the 1^st Property (‘the said Open Space’) or any part or parts thereof which said Open Space is for identification purpose only shown and hatched black on the plan hereto annexed for the purpose of ingress to and exit from the 2^nd Property TO HOLD the said right and liberty herein granted unto the Grantee for the residue of the term of years created by the Government Lease under which the said Open Space is held from the Government.”

72.The following definitions are provided in the schedules to the 2006 Deed:

(1)  “The Grantor” is defined under the First Schedule as Sino Favour;

(2)  “The Grantee” is defined under the Second Schedule as:

“The owners and occupiers for the time being of the 2^nd Property or any part or parts thereof and his successors in title and assigns and his tenants servants and licensees.”;

(3)  “The 1^st Property” is defined under the Third Schedule as:

“ALL THOSE pieces or parcels of ground situate lying and being at North, New Territories, Hong Kong and registered in the Land Registry as SECTION P OF LOT NO. 482, THE REMAINING PORTION OF LOT NO. 485, LOT NOS. 487, 488 AND 507 ALL IN DEMARCATION DISTRICT NO. 94.”;

(4)  “The 2^nd Property” is defined under the 4^th Schedule as:

“(a) ALL THOSE pieces or parcels of ground situate lying and being at North, New Territories, Hong Kong and registered in the Land Registry as Subsection 1 of Section B of Lot No. 482, Subsection 1 of Section C of Lot No. 482, Sections D, E, F, G, H, J, K and L of Lot No. 482 and Section A of Lot No. 485 all in Demarcation District No. 94.

(b) ALL THOSE pieces or parcels of ground situate lying and being at North, New Territories, Hong Kong and registered in the Land Registry as Subsection 2 of Section B of Lot No. 482, The Remaining Portion of Section B of Lot No. 482, The Remaining Portion of Section C of Lot No. 482, Section M of Lot No. 482, Subsections 5 and 6 of Section N of Lot No. 482, The Remaining Portion of Lot No. 482 and Section B of Lot No. 485 all in Demarcation District No. 94.” (emphases added for the lots included in the Main Road)

73.The Judge rejected the plaintiffs’ case that, on a proper construction, the 2006 Deed granted a vehicular right of way over the Main Road by Sino Favour to owners of the flats in the Estate. She explained her conclusion at [65] - [67] and [165] - [166] of the Judgment as follows:

“65. On the other hand, Mr Ho highlighted in his submissions that pursuant to the 2006 Deed, Sino Favour granted a right of way to the owners of the Houses over only a small part of the Main Road, namely Lot 482P, Lot 485RP and Lot 487, together with some lands situated outside the Estate.

66. For the plaintiffs to enter the Estate via the Main Gate and then to go to their flat in House 7, the plaintiffs would have to go past Lot 482P, Lot 485RP, Lot 482O, Lot 485B, Lot 482RP and, lastly, Lot 482M. However, under the 2006 Deed, the last four lots of land (‘the Uncovered Land’) were not included in the grant. Hence no right of way was created under the deed over the Uncovered Land.

67. Given that the 2006 Deed was executed to allow the owners to go over the Developers’ land for the purpose of ingress to and exit from their houses, it therefore follows that the deed did not have the effect of creating a vehicular right of access over the Main Road or the Main Gate. To construe otherwise would be absurd because the owners have no vehicular right of way over the Uncovered Land, yet they must pass through the Uncovered Land before accessing Lot 485RP when they leave the Estate from their Houses.

…

165. In my view, the construction contended for by the plaintiffs is untenable. The purpose of the grant was expressly stated to be ‘for the purpose of ingress to and exit’ from the owners’ flats. However, Sino Favour only granted a right of way over part of, but not the whole of, the Main Road. If the plaintiffs’ construction is correct, the right granted under the deed ought to be such as to allow the owners to have access from the Main Gate to their houses by vehicles. But the owners do not have such right under the express terms of the deed as they enjoy no such right over the Uncovered Land. See paras 65 to 67 above. The plaintiffs’ construction is therefore not tenable.

166. On the whole, the factual background surrounding the making of the 2006 Deed is not known. The recital referred to ‘the request of the Grantee’. However, none of the witnesses knew anything about the grant at the time. Furthermore, lands outside of the Estate were also covered by the grant. It is simply unclear what the purpose of the 2006 Deed was.”

74.Mr Chong submits that the Judge erred in the following ways:

(1)  First, in her construction, the Judge had wrongly focused on the words “for the purpose of ingress to and exit”, when those words do not exclude ingress to and exit by cars. He further says the Judge ought to have also considered the words “a full and uninterrupted right and liberty”.

(2)  Second, the Judge wrongly took into account the irrelevant consideration in her construction that the owners enjoyed no such vehicular right over the portion of the Main Road which were not covered under the 2006 Deed. On the other hand, the Judge further erred in failing to take into account the then existing dispute between the Developers and the owners over the car park spaces which led to the Developers executing the 2006 Deed with a view to preserve and reserve to themselves the “Uncovered Land” (ie, Lots 482O, 485B, 482RP and 482M[16]) as car parks without restricting the owners’ prior right of way with vehicular access (given no restrictive words were used in the deed). The Judge also should have taken into account the 2005 Deed which provided vehicular access over the right of way of the Side Gate. If she had taken into account all these contexts, the Judge ought to have held that the relevant vehicular right of way was granted by way of the 2006 Deed.

75.We are unable to agree with Mr Chong.

76.Under the plain and express words of the 2006 Deed, a right of way was granted over only a portion of the Main Road, namely Lots 482P, 485RP and 487, for the purpose of ingress and exit from the 2^nd Property.

77.In the premises, the Judge was entirely correct to say that by way of the 2006 Deed itself, no right of way had been granted over the Uncovered Land of the Main Road. The context arguments advanced by Mr Chong could not have included those parts of the Main Road which have not been specifically included in the deed under the definition of “The 1^st Property”.

78.Similarly, as the Judge had correctly pointed out, it is not disputable that at the time of the 2006 Deed, as a matter of fact, various parking lots were already designated on the Main Road. Specifically, Lot 485RP was used as a parking space, with specific spaces allocated and rented out.

79.With these relevant factual contexts in mind, on a proper construction of the 2006 Deed, it is plain to us that it did not grant a vehicular right of access to those parts of the Main Road which are covered by the deed:

(1)  First, the 2006 Deed does not expressly provide for vehicular access. In contrast with the 2005 Deed (where Sino Favour is the grantee), express words for vehicular access were used by the parties when they intended to include a vehicular right of way in the grant. In the premises, the Judge was right to say that the express words of the 2006 Deed do not support a construction that the parties intended a vehicular right of way to be granted. Mr Chong’s contention that the Judge had failed to take into account the 2005 Deed simply does not assist him. As explained, the 2005 Deed indeed is against his construction.

(2)  Second, given the above indisputable factual contexts, the Judge was also plainly correct to hold that, on proper construction, the 2006 Deed could not have been intended by the parties to grant a vehicular right of way to the owners as that would have resulted in an absurd and impractical scenario, given that (a) a significant part of the Main Road had been designated already as car parks leaving insufficient space for any vehicle to pass by, and (b) such a right of way would pass over only parts of the Main Road but not the other parts not included in the deed.

80.Accordingly, this ground fails.

E2.2  Proprietary Estoppel

81.The Judge rejected the plaintiffs’ claim based on proprietary estoppel for the reasons set out at [158] - [161] of the Judgment as follows:

“158. As a preliminary point, Mr Ho submitted that the plaintiffs have not pleaded their case properly. There is, he submitted, no plea on detriment or reliance. In my view, while there is much to be said for how the plaintiffs have pleaded their case of proprietary estoppel, when the statement of claim and the reply are read together, the material facts in support of the requisite elements, including representation and detrimental reliance, are there in the pleadings. The pleaded case covers the following points. The representation was made in the form of the physical condition of the Estate and the Brochure. But for the representation, the plaintiffs would not have purchased the flat. That amounted to detrimental reliance on the plaintiffs’ part. The Developers, and their successors in title who have had notice, should be estopped from denying the plaintiffs the right.

159. On the basis of such pleas, I accept Mr Chong’s submission that the car park rules, which were not given to the plaintiffs at any time (whether before or after their purchase), are not relevant. They would not operate to curtail any rights which the plaintiffs would acquire under the doctrine of proprietary estoppel.

160. That said, I am of the view that no proprietary estoppel arises, as contended by the plaintiffs. The alleged representation, which takes the form of the physical condition of the Estate and the Brochure, is equivocal. As submitted by Mr Tsui, the Main Road was expressly described as ‘消防通道’ in the Brochure. There was no suggestion in the Brochure that it was to be used freely as a general vehicular access by the owners. More importantly, the Estate is a residential estate. That fact would be plain to the plaintiffs during their inspection. It was not to be expected that loading and unloading of heavy goods would frequently take place. In the circumstances, there is nothing extraordinary at all if the residents are not given an entitlement to have vehicular access right to the front of their own houses. As such, the physical condition of the Estate and the Brochure together did not amount to any representation made by the Developers that the owners would be given a right to pass the Main Gate with vehicles.

161. I should add that the defendants’ plea made in the Developers action (see para 117 above) does not assist the plaintiffs’ case. Their plea simply reflected their stance adopted in that litigation vis-à-vis the Developers. Judging from the terms of the settlement subsequently reached, the defendants were effectively unsuccessful in their plea.”

82.Under this ground, Mr Chong submits that the Judge erred in her conclusion:

(1)  The Judge erred in law as she had failed to consider that proprietary estoppel can be based on acquiescence. In this respect, the Developers had intended, dedicated and allowed the occupiers of the Estate to use the uncovered land as common passage for both pedestrians and cars and had led the owners of the Estate to believe that they had pedestrian and vehicular passage over the Side Gate. It would be unconscionable for the Developers and its predecessor to deny the existence of the said right of way now.

(2)  The Judge also took into account irrelevant consideration in the Judgment that it was not to be expected that loading and unloading of heavy goods would frequently take place. The Judge further ought to have accepted the defendant’s plea made in the earlier Developers action[17].

83.Mr Chong’s principal complaint under this ground is that the Judge failed to consider that proprietary estoppel can be established based on the Developers’ acquiescence and that the plaintiffs had relied on it when purchasing their flat in the Estate.

84.As pointed out by Mr Ho for the 3^rd and 4^th defendants and Mr Tsui for the 1^st defendant, the claim based on acquiescence was unpleaded, nor was it raised by the Judge, and is advanced for the first time in this appeal. The plaintiffs’ only pleaded case on proprietary estoppel was premised on the alleged representations made in the form of the physical condition of the Estate and through the statements in the Sale Brochure. Counsel therefore submit that the plaintiffs should not be permitted to rely on this point in the appeal.

85.We agree with counsel that this new argument should not be entertained at such a late stage:

(1)  The questions of whether (a) there was sufficient and relevant acquiescence on the part of the Developers, and (b) sufficient and relevant reliance by the plaintiffs on it are fact-sensitive and evidence based.

(2)  Further, as this was neither pleaded nor relied on at trial, there is simply no relevant evidence pertinent to these questions adduced and tested at trial. The Judge had also made no relevant finding on these.

(3)  It would therefore also be significantly prejudicial to these defendants if the plaintiffs are allowed to rely on this basis at this late stage on appeal, as the defendants had been deprived of the opportunity to adduce any material evidence to rebut the allegations.

(4)  In the premises, there are no exceptional reasons to permit the plaintiffs to raise and rely on this new argument on appeal.

See: Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at [38] ‑ [39].

86.In relation to the Judge’s reasons for rejecting the plaintiffs’ pleaded proprietary estoppel claim based on representations, Mr Chong’s complaints are also without merit.

87.First, we agree with the Judge that, on the evidence, the alleged representations which took the form of the physical condition of the Estate and through the statements in the Sale Brochure are equivocal. As rightly observed by the Judge at [160] of the Judgment, the Main Road was expressly described as “消防通道” in the Sale Brochure and there was no suggestion in the Sale Brochure that the Main Gate was used as a general vehicular access by the owners. It is also clearly open for the Judge to come to the view that it was not expected that loading and unloading of heavy goods would frequently take place given that the Estate is a residential one. There is therefore nothing extraordinary if the residents are not given an entitlement to have vehicular access right to the front of their own houses.

88.Second, as to the plaintiffs’ assertion that “the owners and their tenants would often need delivery workers and removal workers to deliver any goods and furniture to and from their premises”, and thus a vehicular right of way should be inferred, as we have raised with Mr Chong at the hearing, there is no specific finding of fact by the Judge in this regard. In the circumstances, there is no factual basis to support the plaintiffs’ said contention in this appeal.

89.Finally, Mr Chong’s reliance on the defendants’ plea in the earlier Developers’ action is entirely without merit as the Judge has observed at [161] of the Judgment that the defendants were effectively unsuccessful in their plea, an observation which Mr Chong has not challenged in this appeal and thus must be accepted to be justified.

90.Accordingly, this ground of appeal must also fail.

E2.3  Implied Grant and Wheeldon v Burrows and section 16(1) of the CPO

91.The Judge rejected the plaintiffs’ claim based on an implied grant and explained her reasons at [149] and [162] ‑ [163] of the Judgment as follows:

“149. In respect of the ownership of the lands of the Estate as of 2005:

a. Mr Chong invited the court to proceed on the basis that when the Developers sold the flats in 2005, they owned the entire Estate beneficially as the then individual owners of the lots were ‘Dings’ acting as agents or trustees of the Developers.

b. I decline to make that factual finding. The objection raised by both Mr Tsui and Mr Ho is justified. The alleged Ding arrangement was not pleaded at all. Before the trial, it was never the case which the defendants were supposed to meet in the present action. No evidence was adduced as a result. The plaintiffs should not be allowed to run a case which they have never properly set up.

c. It is true that Chan’s evidence in her witness statement may go to support the plaintiffs’ factual proposition. However, that evidence itself goes contrary to the legal documents effecting the sale of the flats to the owners. See, for instance, the assignment dated 12 January 2006 in which Lau Fook Keung assigned the flat to the plaintiffs. The assignment expressly stated that Lau Fook Keung assigned the property ‘as beneficial owner’. The contemporaneous documents go directly contrary to the plaintiffs’ position.

d. If the plaintiffs had properly pleaded their case on the alleged Ding arrangement at the outset, the parties would have had the opportunity to adduce evidence in this regard. That has not happened. The legal documentation would prevail in the present case.

...

162. As an alternative, the plaintiffs rely on the doctrine of implied grant to establish the right of way over the Main Gate with vehicles. In my view, that alternative also fails.

163. The factual premise, on which the claim is based, is that all the lands within the Estate were owned by the Developers at the time of sale. Mr Chong’s argument was that when the Developers sold the flats to the plaintiffs, there must be an implied grant on the part of Sino Favour to allow vehicular access over the Main Gate. I have rejected the factual premise in relation to the ownership of the lands. It follows that the claim under implied grant must fail.”

92.Under this ground of appeal, the plaintiffs contend that the learned Judge erred in refusing to find that, when the Developers sold the flats in the Estate, they owned the entire Estate beneficially as the then individual owners of the lots (ie, the Original Individual Sellers) were acting as agents or trustees of the Developers (at [149] of the Judgment):

(1)  It is plainly wrong that the learned Judge failed to accept the undisputed evidence of Ms Chan Yuet Ho (the Trial Defendants’ own witness) (see [35(c)] of the Judgment) that the Developers or their agents did own all the Estate before 2005 and that after the flats were sold, the open area was still owned by Sino Favour or agents of the Developers.

(2)  Even if the Original Individual Sellers were not “Dings”, the learned judge ought to have found that they were nonetheless the agents of the Developers who in fact owned all the units in the Estate.

(3)  The learned judge took into account irrelevant considerations at [149(c)] of the judgment that in the assignments, the Original Individual Sellers of the units were described as “beneficial owner” and therefore the learned judge wrongly took the view that the Original Individual Sellers were not agents or trustees for the Developers. As the dispute is not between the immediate parties to the assignments in question, the learned judge ought to have looked at the substance rather than form and beyond the descriptions in the conveyancing documents.

(4)  Even if the Original Individual Sellers were not the agents of the Developers, there is still an implied grant by the Developers to the owners over the Uncovered Land for their reasonable enjoyment, which would include vehicular access.

93.In further support of the arguments that the Judge ought to have found that the Developers in fact beneficially owned all the land before the sale, Mr Chong says the Judge was wrong to refuse to make that factual finding on the ground that the plaintiffs did not plead the alleged Ding arrangement, when this is non sequitur, and that for purposes of implied grant, all that the plaintiffs needed to show is that the Developers in fact owned both the Houses and the Main Road and the Main Gate in light of the requirements laid down in Wheeldon v Burrows (1879) 12 Ch D 31[18]. In the circumstances, vehicular access is plainly necessary for the reasonable enjoyment of the land and that the Main Road and Side Road served the plaintiffs’ property.

94.These grounds can be easily dismissed. In our view, the Judge was plainly correct for the reasons she had explained at [149] of the Judgment not to allow the plaintiffs to run the unpleaded case that the Original Individual Sellers were acting as “Dings” and / or agents or trustees of the Developers.

95.Further, as rightly pointed out by Mr Ho, given the starting presumption that beneficial ownership follows legal ownership, the party seeking to argue otherwise has the burden of proof. In the present case, there is no evidence adduced by the plaintiffs from the Developers or the original owners. In this respect, it is thus plainly open to the Judge, after assessing the evidence as a whole, including the evidence of Ms Chan Yuet Ho (who is a representative of the 4^th defendant and a resident of the Estate not involved in any dealings at the sale between the Developers and the Individual Original Sellers) to find against the plaintiffs, when the assignment of the plaintiffs’ property expressly stated that the seller Lau Fook Keung assigned the property “as beneficial owner”.

96.The reliance on the rule in Wheeldon v Burrows and section 16 of the CPO[19] does not assist the plaintiffs at all, since they are all premised on the success of the plaintiffs’ contention that the Judge ought to have found that the Developers were beneficial owners of land upon which the Estate was built.

97.We reject this ground of appeal.

E2.4  Necessity

98.The plaintiffs’ case on necessity is premised on the argument that, if they did not enjoy the right of way over the Main Gate, the property would be landlocked.

99.However, given our conclusion above that the plaintiffs enjoy the right of way (both vehicular and pedestrian) over the Side Road through the Side Gate, their property is not landlocked as contended and the plaintiffs’ case on necessity naturally falls away.

E3.  Whether the plaintiffs’ rights were infringed in the 2013 Incident

100.The Judge explained why the 2013 Incident did not amount to an infringement of the plaintiffs’ right of way over the Main Gate at [174] ‑ [178] of the Judgment as follows:

“174. In respect of the alleged incident in 2013, the plaintiffs rely on the resolution passed in the MAC meeting on 21 July 2013. They contend that by reason of the resolution, they were unable to access the Estate via the Main Gate.

175. Where it is alleged that a defendant has interfered with an easement enjoyed by a plaintiff, the interference is like trespass. No special damage is required to be proved: Clerk & Lindsell on Torts (23^rd ed) at para 19-27.

176. In the present case, the relevant question is whether the resolution amounted to an interference with the plaintiffs’ enjoyment of the pedestrian right of way over the Main Gate. The resolution was to the effect that unless the plaintiffs settled the outstanding management fees and expenses, they would not be given the smart card key to access the Main Gate.

177. It is notable that in the present case, the plaintiffs’ complaint is not that the installation of the smart card key system at the Main Gate in itself amounted to an interference with their right of way: cf Page v Convoy Investments Ltd [2015] EWCA Civ 1061 at para 46, which was referred to in Man Wa Tong at para 26.

178. Here, the objective facts are that a lock system had all along been installed at the Main Gate. And there was apparently no objection raised by the plaintiffs to such a system. In the circumstances, I accept Mr Ho’s submission that the plaintiffs’ alleged inability to enter the Estate via the pedestrian gate was self-induced. The plaintiffs have all along maintained that they did not need management services. However, the provision of the smart card key was clearly part of the management services. And, as will be seen below, the plaintiffs are prima facie contractually liable to pay the management fees. In the circumstances, the passing of the resolution did not amount to an interference with the plaintiffs’ enjoyment of the right of way over the Main Gate.”

101.Mr Chong contends that the Judge erred in this holding as:

(1)  Irrespective of the MAC’s resolution, the owners of the Main Gate must give access to the plaintiffs. Given that the smart key card was not given to the plaintiffs, for which the 1^st, 3^rd, 8^th and 9^th defendants approved, there was an interference of a right of way.

(2)  In particular, the Judge erred in holding that the inability for the plaintiffs to enter the Estate was self-induced, as the Judge’s decision was in contradiction to and overlooked the Small Claims Tribunal’s Decision. In any event, the management company has ceased to provide the management services to the plaintiffs.

(3)  If a key card is not provided to a locked gate, as a matter of law, it would amount to a wrongful interference with a right of way.

102.Given our above conclusion that the plaintiffs’ case in relation to the vehicular right of way over the Main Gate failed, we only need to focus on the pedestrian access over the Main Gate insofar as any alleged interference is concerned.

103.In our view, the Judge erred in holding that the plaintiffs were not entitled to the issue of the smart key card as they had failed to settle the management fees. Our reasons are these:

(1)  It is plain that the installation of the smart key card system at the Main Gate was for security purposes to prevent unauthorised persons from entering into the Estate.

(2)  On the other hand, the plaintiffs as owners of a flat of House 7 cannot be regarded as unauthorized persons for such purposes. This right to enter the Estate for access to and from their flat cannot be related or tied to whether or not they have paid the management fees as due.

(3)  In the premises, the Judge was wrong to hold otherwise whether in law and on the facts. The refusal to provide the plaintiffs with the smart key card because they failed to settle the outstanding management fees (but not about paying a deposit for the key) in 2013 therefore amounted to an infringement of their right.

104.For the above reasons, we will allow the appeal in relation to the interference of the plaintiffs’ pedestrian right of way from 21 July 2013 to 15 November 2013, when the 12^th defendant provided the plaintiffs the key card pursuant to the undertaking given before Mimmie Chan J (see [33] above).

105.However, noting that the 12^th defendant already provided the smart key cards to the plaintiffs in November 2013, and that we have allowed the plaintiffs’ appeal in relation to the vehicular and pedestrian right of way over the Side Gate, it will not be necessary for us to grant any declaratory or injunctive relief as sought by the plaintiffs against any continuing interference.

106.The plaintiffs have in the Notice of Appeal asked for HK$70,000 as damages for their inconvenience caused by the Appeal Defendants. We have asked Mr Chong at the hearing as to the basis of that quantification (which has not been pleaded) and the evidence in support of it. In reply, Mr Chong has rightly accepted there was none, and submitted that in the event that the plaintiffs succeeded, he would only ask for nominal damages. Accordingly, we will only award nominal damages of HK$1 to the plaintiffs, to be payable jointly and severally by the 1^st, 3^rd, 8^th and 9^th defendants.

F.  DISPOSITION

107.For the above reasons, we would allow the appeal insofar as the right of way over the Side Gate and the interference of right of way by the 1^st, 3^rd, 8^th and 9^th defendants are concerned. We will set aside paragraph (2) of the Order of the Judge dated 28 May 2021 in relation to the dismissal of the plaintiffs’ claim in that respect and the costs order, and further make the following orders:

(1)  A declaration that the 1^st and 2^nd plaintiffs and their assigns, successors-in-title and their tenants together with their servants and licensees do have pedestrian and vehicular right of way over the Side Gate located in Lot 482D and Lot 482G; and

(2)  Nominal damages of HK$1 to be paid to the 1^st and 2^nd plaintiffs by the 1^st, 3^rd, 8^th and 9^th defendants on a joint and several basis.

108.The appeal in relation to the 4^th defendant (which concerns the Main Gate Issue) however should be dismissed.

109.As to costs, we see no reason why costs should not follow the event. Accordingly, we will make an order nisi that the costs of the appeal be to the plaintiffs to be paid by the 1^st, 3^rd,8^th and 9^th defendants, while the plaintiff shall pay the 4^th defendant’s costs, all to be taxed if not agreed.

110.As to the costs of the court below, noting that the grounds allowed in the appeal mainly premised on the issues raised by the Court on its own motion, which differed from those grounds advanced by the parties before the Judge in the court below, we consider that it is fair and reasonable in all the circumstances that no order be made as to costs.

111.These costs order nisi shall become absolute 14 days from the date of this judgment, unless any party applies to vary it within that period.

Mr Patrick Chong and Mr Joshua Yeung, instructed by Rowdget W Young & Co, for the 1^st and 2^nd plaintiffs

Mr Brian Tsui, instructed by Raymond Chan, Kenneth Yuen & Co, for the 1^st defendant

Mr Leon Ho, instructed by Terry Yeung & Lai, for the 3^rd, 4^th, 8^th and 9^th defendants

Appendix: the Plan