Attorney General v. Moon Yick Co Ltd and Another

CACV000088/1979

Building (Planning) Regulations - colonnade along boundary of site - judge found building was "set back" within meaning of reg.22(1) - Court of Appeal would not upset finding.

Highway - on true construction of Conditions of Sale purchaser was not to dedicate part of site to public as a highway but merely to grant a right of way over it - quaere whether a lessee for years can dedicate part of demised land.

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Coram: Huggins, J.A. , McMullin, J.A. and Yang, J.

Date of Judgment: 14 March1980

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JUDGMENT

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Huggins, J.A.:

1. A dispute has arisen as to the construction of (1) the terms of a contract under which the Respondents purchased a building site on the Wan Chai Reclamation and (2) reg. 22(1) of the Building (Planning) Regulations. The terms of the contract are contained in the Particulars and Conditions of a sale by public auction. If the construction contended for by the Appellant is right, the building to be erected on the site will not satisfy the conditions laid down in reg. 22(1) and will be limited to a height of thirty-five storeys, whereas, if the Respondents are right, the building will satisfy the conditions and may be taken up to a height of thirty-eight storeys. When it is appreciated that the price paid for the site was $415,000,000, the importance of the issue becomes apparent.

2. One of the difficulties facing town planners in any area of intensive development, particularly where the development includes very high buildings, is to provide adequate accommodation for pedestrians, preferably well separated from vehicular traffic. With this in mind the Government inserted in the Conditions of Sale provisions requiring the purchasers to provide public walkways at two levels. The relevant provisions are in the form of Special Conditions:

I adopt the trial judge's description of the land in question:

"The site sold is rectangular in shape and bounded on the opposite sides by boundaries of 130.29 m. each and the other two 46.49 m. It is common ground between the parties that each boundary abuts on to a street. The purple area shown on the plan is an area extending 6 m. inwards from the four boundaries and the pink cross-hatched black another 4.5 m. from the inner boundaries of the purple area. The intention is therefore clear that the passage way (the purple area) at ground level will be covered overhead all over by the podium at a height of 10.82 m. from H.K.P.D. which I am told is over 6 m. from ground level and the part of the podium over the pink cross-hatched black area will be covered, if at all, by the building at a minimum height of 3.66 m."

The Respondents' plans show the podium resting on vertical columns 10.8 m. in height from its outer edge to ground level. At ground level those columns therefore line the outer edge of the purple area.

3. This brings us to reg. 22(1), the material part of which reads:

"Where, between ground level and a height of not less than 5 m......, a building ...... is set back from a boundary of the lot on which it is erected, being a boundary that abuts on a street, and, with the consent of the Government, the part of the lot that is thereby not built upon is dedicated to the public for the purposes of passage -"

and then follow the provisions which, in effect, permit the increase in height which the Respondents desire.

4. Three questions arise here:

(i) The set back

5. The learned judge says that it was argued before him on behalf of the Crown that reg.22 did not apply

That is not quite how it was argued before us: I understand it to be said not so much that the Respondents have a right to build supports on the purple area as that their plans in fact require supports on that area. The argument is that the supports or columns are part of the building, that they are on the boundary and that, consequently, the building has not been set back from the boundary. The judge sought to avoid deciding whether the columns were part of the building by concentrating on the legislative purpose of reg. 22. He said:

"In my view the intention of Regulation 22 is to compensate an owner of land about to commence building works who sets back part of his land abutting on a street and undertakes to dedicate that part to the public for the purpose of passage. If to implement that purpose that part of the building over the intended way requires columns to be built onto the way for support and which columns do not affect the purpose which the way is intended to serve and are approved by the authorities then the mere literal construction of the Regulation ought not to prevail as it will be against the intention of the Legislature to compensate such an owner and so I hold."

(I take it that the last part of this was intended to mean "as it will be against the intention of the Legislature, which is to compensate such an owner, and I so hold".) Whilst I agree with the judge's initial statement of the intention of reg.22, I do not think the courts can properly assume that the Legislature necessarily intended to compensate an owner in the circumstances then predicated. We must construe the regulation as it stands and, as it seems to me, we could hold that this building has been set back either by adopting a definition of "building" different from that which the Legislature has provided or by applying to the columns the maxim de minimis non curat lex. Mr. Widdicombe submits that the judge, by referring to "the substance of a set back" was applying the de minimis maxim. Furthermore, he says that was a proper application of the maxim. I think his first submission can be accepted, but the second requires careful scrutiny. It involves two separate matters, whether the maxim can have any application to reg.22 and whether, on the evidence, the proposed columns can reasonably be regarded as a trifle. I see no reason why the maxim should not be applied and if instead of the columns there had been some slight projection on the exterior wall, such as a window sill or a drain pipe, I think that the calculations would properly ignore that projection. When it comes to deciding whether the columns can reasonably be regarded as a trifle, we must give full weight to the opinion of the learned judge, although we are in as good a position as he was to weigh the evidence. My immediate reaction was to hold that as they were substantial structures designed to take the whole weight of one side of the podium they could not be ignored. The judge was, however, impressed by the argument that whatever the size and importance of the columns qua structures they did not interfere substantially with the purpose of a dedication as contemplated by reg.22, namely to provide a public way on the Respondents' land. It had, of course, to be conceded that they would interfere with vehicular access, but Special Condition (13) expressly limits access to pedestrians, and it is said that interference with persons passing and repassing on foot would be negligible. The judge having accepted that this was so, I would be slow to differ from him. Obviously it is a matter upon which there could be conflicting opinions, as was the nature of the earth moving operation in Coleshill and District Investment Co. Ltd. v. Minister of Housing and Local Government 1968 1 All E.R. 945, 947D-F. I confess to considerable hesitation on this aspect of the case but am not prepared to say that the judge was wrong.

(ii) Redesign

6. This only arises if I am wrong as to the first point. By their Respondents' Notice the Respondents seek a declaration that the building would be within reg. 22(1) if the columns were omitted from the plans. No doubt the columns, although aesthetically and financially a desirable feature of the design, are not a structural necessity and the podium could be supported by cantilevers. If that were done, the hesitation I have just expressed would be dispelled: the building would then clearly be within the regulation, but a declaration to that effect would not assist the Respondents because the question would still remain whether the agreement permitted them to change the plans in this way. It is contended on behalf of the Crown that the Director of Public Works has, by virtue of Special Condition (11)(a), an absolute discretion to require the provision of such columns - and I think it is implicit in the argument that he will so exercise that discretion if it is lawful.

7. As to the first part of the contention I think the Director does have an absolute discretion. Special Condition (11)(a) provides for approval by the Director of the design of the podium, but gives him a "sole discretion" as to the provision and construction of any supports. In so far as the supports are, arguably, an integral part of the podium there may be an inconsistency here, but there can be no doubt as to the real intention of the parties: the Director, and the Director alone, decides what supports there shall be and, if the Director lawfully says "let there be columns", columns there must be.

8. The vital question would, therefore, be whether there was any bar to the erection of the columns. It is argued on behalf of the Respondents that the Director has no power to require columns because Special Condition (13)(a) forbids them. There is here an inconsistency in the Respondents' stand, for their existing plans call for columns on the purple area and they have never suggested that they are bound to change the plans because the columns would constitute a breach of the Special Conditions. Nothing turns upon that. It is, I think, common ground that the columns would not fall within the term "foundations" in Special Condition (13)(a) and that they are forbidden unless they are either part of the "podium" or "structures ... approved by the Director of Public Works". The Respondents say the columns are not part of the podium, because Special Condition (11)(a) draws a distinction between the podium and its supports, whilst they are not "structures", because that is a term intended to include only such things as "screening walls, foundations, flower beds and seats". For my part I do not think the distinction drawn in Special Condition (11)(a) between the podium and its supports for the purpose of allocating the rights to design necessarily requires that they be distinguished for all purposes. In truth I doubt whether the word "podium" is appropriate to a projection no part of which is in contact with the ground, though of course if the parties had agreed that this structure be supported by cantilevers at a level above ground it would have been impossible to maintain that the structure did not comply with Special Condition (11)(a). Nevertheless, according to the ordinary meaning of the word I think "podium" would include that part of the projecting structure which supports the deck and the fact that Special Condition (12)(a) refers to "the deck level of the said podium" shows that the parties recognised the existence of one or more other levels of the podium. The columns would therefore be included unless a contrary intention were indicated and I find no contraindication here. Even if that be wrong, I see no reason to limit the word "structures" in Special Condition (13)(a) in the manner proposed by the Respondents. Indeed, one of the meanings given by the Shorter Oxford English Dictionary is "supporting framework or whole of the essential parts of something". There can be no doubt that the columns would be approved by the Director of Public Works in writing under Special Condition (13)(a) - if they have not already been so approved - and therefore they may be required by him under Special Condition (11)(a).

(iii) Dedication

9. That leaves the question whether there has been a dedication of the part of the lot not built upon. For the Respondents Mr. Widdicombe submitted and that the absence of the word "dedicate" from the Particulars and Conditions of Sale did not indicate an intention not to dedicate. I accept that it means "give" - or more precisely "give up to" - and that, if an intention to give the land up to the public can be inferred from the words actually used, the absence of the term of art is immaterial. However, this begs the question whether the words actually used do indicate an intention to dedicate the land rather than to give a right of way over the Respondents' land. It is submitted on behalf of the Attorney General that the learned judge was wrong to infer such an intention from the terms of this contract. Counsel points to the marginal note to Special Condition (13)(b) and to that paragraph itself and submits that they are not consonant with a dedication of the land. I think there is force in this submission. Furthermore, the judge posed to himself the question "Why were the words 'as if the said podium and the said passage area were part or parts of a public street' inserted in Special Condition (13)(b)?" and found the answer in a quotation from the speech of Lord Asquith of Bishopstone in East End Dwellings Co. Ltd. v. Finsbury Borough Council 1952 A.C. 109 at p.132. While I entirely accept the dictum of Lord Asquith, I think, with respect to the learned trial judge, that it does not here support the conclusion which he reached. I think Mr. Graham is right when he submits that the fact that the words of the contract require us to treat as real an imaginary state of affairs, namely that the podium and passage area are part of parts of a public street, is a clear indication of the very opposite intention. If the state of affairs predicated were in fact real - as it would be if there were a dedication - there would be no need to provide for it to be treated as if it were real. A number of other indications was relied upon, but there was only one which in my judgment might possibly be regarded as an indication one way or the other, and that is the fact that the Respondents are mere lessees for seventy-five years with an option to renew for another seventy-five years. It is submitted that as lessees they were unable to dedicate the land, for dedication must be in perpetuity: see per Byles J. in Dawes v Hawkins (1860) 8 C.B. (N.S.) 848, 858. The validity of that submission is so open a question that I prefer not to answer it unless compelled to do so, and I do not think the circumstances of this case make it necessary: I am content to base my decision on the wording of Special Condition (13)(b).

Estoppel

10. Finally, the Respondents rely upon an alleged estoppel: they contend that there is in Special Condition (20) a representation that reg. 22 of the Building (Planning) Regulations applied to this building, that in reliance upon that representation they bid a higher price than they would otherwise have done and that therefore the Crown is estopped from denying that reg. 22 applies. The material part of Special Condition (20) reads as follows:

"The purchaser shall erect, construct and maintain upon the lot to the satisfaction of the Director of Public Works adequate parking spaces for members of the public for the parking of not less than 400 motor vehicles as defined in the Road Traffic Ordinance together with adequate means of access and circulation spaces. The spaces so provided shall be taken into account in the calculation of the gross floor area for the purposes of Regulations 20, 21, 22 or 23(3) of the Building (Planning) Regulations and any amending legislation."

There are obvious difficulties in the interpretation of this condition, but I am not persuaded that it contains the representation alleged, whether it is read alone or in the context of the whole document. Nor would the position have been different if the plans of the required building had been included in the Conditions of Sale. At most it was a representation that if the building complied with the conditions of reg. 22 of the car parking spaces were to be taken into account in the calculation of the gross floor area.

11. For these reasons I think the appeal must succeed and I would enter judgment for the Defendant in the action.

14th March 1980.

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Coram : Huggins & McMullin, JJ.A. & Yang J.

Date of Judgment: 14th March, 1980.

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JUDGMENT

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McMullin, J.A. :

12. This case turns upon the contruction of documents. The respondents, at an auction held on the 13th of September 1978, purchased a plot of Crown land known as Inland Lot No. 8392 on lease for a term of 75 years with an option to renew for a further 75 years at a premium in the region of HK$400,000,000. Condition 5 of the Special Conditions of Sale obliges the purchasers to develop the site by erecting a building or buildings thereon which will comply with the ordinances etc. relating to building and sanitation in force in Hong Kong. The buildings to be completed by the 30th of September 1982. It is the respondent company's intention to erect a multi-story building for commercial and office user. The site is rectangular in shape and each of the four sides abuts upon a public street. It was however the intention of the Government Authorities who drafted the Conditions of Sale that the entire site should not be occupied by the buildings to be erected thereon. A plan annexed to the Special Conditions shows by colour indications the scheme proposed for the building. The main body of the building is to be erected in the rectangular areas coloured pink and pink cross-hatched in black. Surrounding those areas is a further area coloured purple which in effect extends from the outer walls of the building on all four sides to the boundary site. It is with this purple area that we are concerned in the present dispute.

13. Special Condition 11(a) obliges the developer to construct a podium which is, in effect, a platform extending at right angles to the outer walls of the building to the boundary site all around the building at a height of about 6 metres from ground level. The design and construction of this podium is to be approved by the Director and may include such "supports, access steps, stairways and ramps which the said Director in his sole discretion may require".

14. Special Condition 13 is important, in particular sub-paragraphs (a) and (b) thereof. They are as follows :

It is evident that by ceding this purple area for public use the area available for commercial exploitation has thereby been reduced. It is the respondent company's case that in agreeing to this condition the company did so on the understanding and in the belief that it was common ground between itself and the Government Authorities that they were to have the benefit of provisions in the Building Regulations which would in effect permit them to build three storeys higher on the permitted plot coverage than would otherwise be permissible for a building on a site of that class. The relevant part of Regulation 22 of the Building (Planning) Regulations Cap. 123 is as follows:

"22(1) Where, between ground level and a height of not less than 5 m. or, where the Building Authority is satisfied that there will be no obstruction to vehicular traffic using the street, 3.3 m. above ground level, a building on a class A.B or C site is set back from a boundary of the lot on which it is erected, being a boundary that abuts on a street, and, with the consent of the Government, the part of the lot that is thereby not built upon is dedicated to the public for the purposes of passage-"

There follows a complicated formulary which need not be reproduced but which has, for present purposes, the effect already stated in respect of this particular building.

15. Mr. Widdicombe for the respondent company maintains that the provisions of Special Condition 13 (set out above) fulfil the requirements of Regulation 22 and he says that a proper reading of the contract document will disclose that such must have been the intention of the parties at the time of contracting. In particular he points to the requirements of Special Condition 20 which obliges the developer to make available car parking space for the public in the new building on a scale which would amount to the employment of some three floors for that purpose, floors which could otherwise be turned to revenue earning commercial development.

16. In an affidavit sworn on the 29th of May 1979 Mr. Antony LO Hong-sui,a director of the respondent company, states that such a provision is unusual in contracts of this kind. Mr. Widdicombe enlists this opinion, which has not been controverted by the Attorney General, and he then points to the text of Special Condition 20 where, in relation to these public car park spaces, it is said :

"The spaces so provided shall be taken into account in the calculation of the gross floor area for the purposes of Regulations 20, 21, 22 or 23(3) of the Building (Planning) Regulations and any amending legislation."

Regulation 20 deals with permitted site coverage; Regulation 21 with permitted plot ratio. Counsel regards the express mention of Regulation 22 in Special Condition 20 as being a further and clear indication that what the parties had in mind was a kind of quid pre quo in the form of a dedication which would attract the bonus provided by Regulation 22.

17. Mr. Graham, for the Attorney General, argues to the contrary that the contract document even thus road in the light of the provisions in the Building Regulations yields no such clear intention. He presses a number of considerations drawn from the terms of the contract to support that view. Both counsel, however, agree that the preliminary and essential point to be decided is whether the building, in the form in which it is proposed to erect it according to the plans submitted, can be said to be setback from the site boundaries within the meaning of Regulation 22.

18. It is common ground that the plans as presently displayed provide that the podium will be supported by pillars sited at intervals along the footpath to which the public will have access and which corresponds to the purple area upon the sketch annexed to the Conditions of Sale.

19. It is conceded that the podium itself is part of the building. It is difficult to see how it could be contended that any pillars attached to the podium for the purpose of supporting it are not also part of the building. Indeed, it has not been contended for the respondent company that they are not part of the building.

20. The first argument put forward before Zimmern J. in the court below on this aspect of the case was that, even if required and approved by the Director, these pillars would not dislodge the intention to dedicate this area within the meaning of Regulation 22 because, it was said, the Director's intention that there should be such a setback was achieved in substance notwithstanding the presence of such pillars.

21. As to this Mr. Graham for the appellant contends that the question whether or not a building is setback from the boundary is a question of fact. This building with its extended podium includes substantial supporting pillars regularly spaced all around the boundary lines. Although the main body of the building is setback from the boundary this substantial extension of its fabric, counsel says, is not of such an inconsiderable nature that it can be regarded simply as a trifling embellishment of the whole. It cannot, he says, be disregarded by the application of the rule de minimis non curat lex.

22. In my view this is right. A part of the building does extend to the boundary lines. That it is a very considerable part is made evident from the plans and from the pictures of the model of the completed building which we were shown Indeed, the latter show the extended base of the building as rather more solid than might have been expected inasmuch as the spaces between the boundary pillars appear to be filled in by glass panels.

23. That may not dispose of the argument however. Regulation 22 clearly envisages that a set back need not necessarily be a setback of the whole building. Provided that the lower portion of the building, to a height of either 5 metres or 3.3 metres (depending upon which consideration applies), is set back from the boundary, it is clear that the whole remaining bulk of the building could extend right out to that boundary, following the pattern of construction similar to that employed most familiarly and conspicuously in the Military and Naval Headquarters at Tamar on the waterfront of Hong Kong Island. It might, I think, reasonably be said of such a construction that it had achieved "the substance of a setback". I cannot find anything in the Regulations which would impede the Director from achieving the substance of a setback by any means which seemed to him to satisfy the requirements of Regulation 22 always provided that such was his intention.

24. The real issue therefore is what was the intention of the parties to this contract. If that is the proper way to look at the case it becomes unnecessary to consider the alternative suggestion that if these boundary pillars offend the idea of a setback the respondent company could construct the podium upon cantilever principles. The parties agree that this would be possible. But the appellant points to Special Condition 11(b) which entitles the director to require the construction of supports to the podium and empowers him to direct that they shall be carried out in such sequence and such manner as he shall approve in writing. If this argument is open to the appellant I do not think Mr. Widdicombe's rejoinder based upon the contrasting provision of Special Condition 13 would be a sufficient answer. He suggests that that provision means that only such structures as those which are mentioned in it may be erected within the purple area on approval in writing by the Director. Since the list does not include pillars or supports the Director would not, he says, be entitled to require or approve such supports. To my mind the words "such structures including screening walls, foundations, flower beds and seats ..." are quite ample enough as they stand, or by the application of the eiusdem generis rule if necessary, to empower him to direct the erection and siting of such pillars.

What was the intention of the parties?

25. The argument for the appellant commences with the consideration that the contract does not itself spell out explicitly the respondent company's entitlement under Regulation 22. Mr. Graham asks us to say that such an important feature of the arrangement between the parties would scarcely have been left at the mercy of inference. If Special Condition 13 had been intended to subserve the interests of Regulation 22 it is most unlikely, counsel says, that that intention would not have been explicitly stated in the body of the contract. In this connection counsel referred us to a Crown lease granted to a private developer in 1927 which had been modified by deed of variation in 1975 to permit maximum development on that lot (a parcel of ground in the Central District of Hong Kong Island known as Inland Lot 2317). The lease as varied provided for the benefit of excess site coverage and plot ratio under Regulation 22(1) on condition that the lessee would execute a deed or deeds of dedication whereby certain areas of the site would be turned across to the public for the purpose of passage for the period during which the proposed building continued to be situated thereon.

26. Counsel next directs his attention to the terms of the agreement itself and he asks us to take particular note of four matters which, he says, strongly indicate that nothing in the nature of a dedication of a highway can have been intended by the grantor of the lease.

27. Firstly he says that the words used in paragraph (b) of Special Condition 13 "as if the said podium ... were part or parts of a public street" show a clear distinction between the situation where a dedication of a street is positively intended and where a mere right of way is in prospect. He does not deny that a right of way may include a public right of way or that a public right of way include a highway (See Jowett's Dictionary: "Ways"). He enlists the reference to vehicular traffic in Regulation 22(1) as an indication that the bonus conferred by the Regulation is specifically referrable to the widening of the public street on which vehicles and pedestrians alike may pass.

28. Secondly, the same paragraph provides that the purchaser "shall permit all members of the public at all times and for all lawful purposes freely and with out payment of any nature whatsoever to pass and repass etc." Counsel suggests that had the area been simply dedicated as a highway such words would be unnecessary. Counsel contrasts this provision with the provision made in Special Condition 3 for the areas coloured green and yellow on the sketch map the yellow areas which border the short ends of the rectangle will become footbridges and the green area is destined, as is agreed, to become a public thoroughfare. There is no dispute about these being in the nature of public highways. These areas are given into the management and care of the purchaser only for the duration of the development of the site and once completed in accordance with the plan they are to be handed back to the Government. It is suggested that the same arrangement would have been made in respect of the purple area had it been intended that that should be dedicated to the public as a public highway.

29. Thirdly, it is said that there is a further pointer in the direction of a limited right of passage being granted to the Government for the duration of the lease in the fact that paragraph (d) of Special Condition 13 prohibits the purchaser from placing goods or stalls or carts etc. on the purple areas it being further provided that the Director may see to the removal in such manner as he sees fit and may demand reimbursement from the purchaser for the expense of doing so. And, this is said to be incompatible with the idea of those areas being dedicated to the public as a street.

30. Fourthly, Mr. Graham points out that under General Condition 8 it is open to the purchaser to pull down the building which he proposes now to develop and to re-develop the site in such way as he wishes subject to the approval of the Director of Public Works. This it is said might involve a drastic interruption of the public's right to pass and repass in a manner which is not compatible with the idea of a dedication of the area to public use. This submission is associated with the further contention that the dedication of a highway must be in perpetuity.

31. It may be said at once that the law upon this matter does not appear to be well settled. Mr. Graham was content to put to his proposition no higher than saying that it is questionable whether it is possible to dedicate for a limited term. 'In A.G. v. Biophosphated Guano Company⁽¹⁾ James L.J. at page 335, in the course of the argument puts the question "Can a termor dedicate?".' Although the Court of Appeal found that a lessee had demonstrated sufficient animus dedicandi the decision in the case turned principally upon whether there had been sufficient user of the way by the public and the question of dedication for a limited period was not decided. In the later case of Corsellis v. London County Council⁽²⁾ the court found that there was not sufficient evidence of an intention to dedicate on the part either of the freeholder or of the lessee; there was also insufficient evidence of public user to support a presumed intention to dedicate. At page 713 Neville J., having earlier said that the point did not really arise for decision nevertheless went on to say obiter:

"I have come to the conclusion that there is no such thing known to the law as a dedication of a way for a term."

Other authorities cited to us were Pratt & MacKenzie's Law of Highways 21st ed. page 29 where the point is said to be undecided while a somewhat similar statement appears in the 3rd Edition of Halsbury Vol. 19 at page 45 paragraph 66. Both these latter authorities would seem rather to lean towards the possibility of a limited term of dedication to public use at least in the sense of a right of user enforceable on the basis of contract or estoppel.

32. Even if, however, it be not possible for the purchaser - the lessee - in the present case to dedicate part of the site leased to him as a public highway it is conceded between the parties that if dedication is in the picture at all it must be in the nature of a joint dedication by the owner of the fee i.e. the Hong Kong Government and the lessee as the proprietor of a limited term.

33. We come back thus once more to the intention of the parties. Mr. Graham put his argument on this point rather too high when he asked us to say that there was no authority which allowed an intention to dedicate to be presumed. It is difficult to see why this should be so and the passage he himself quoted from Pratt & MacKenzie (page 16) clearly states that an intention to dedicate may be express or presumed. Moreover Prvor v. Pryer(3⁾ and Simpson v. A.G.⁽⁴⁾, upon which Mr. Widdicombe relies, are plain authorities for the presuming of such an intention.

34. Mr. Widdicombe relies in the main upon the maxim verba fortius accipiuntur contra proferentem a principle forcefully expressed in Sheppard's Touchstone of Common Assurances 87 as follows :

"All the words of a deed shall be taken most strongly against him that doth speak them, and most in advantage of the other party."

This principle, that a man's grant shall be taken most strongly against himself, applies to Condition of Sale which likewise are to be construed strictly against the vendor (Seaton v. Mapp⁽⁵⁾). Moreover, although this is a case of a Crown grant, the old rule that such grants are normally construed most favourably for the Crown is said to be relaxed in various circumstances (See Halsbury's Law of England 4th Ed. Vol. 8 para. 1050 where, on the authority of certain old decisions, it is plainly stated that if the grant is for valuable consideration it must be construed strictly in favour of the grantee, "for the honour of the Sovereign".)

35. The difficulty inherent in Mr. Widdicombe's position is, of course, that in order to establish the dedication of a highway it is essential that he can show the intention of the grantor to combine with the lessee to do so. These proceedings make it very plain that the Crown is not now conceding that that was the intention of the Director at the time of the making of the contract. The contra proferentem rule only applies where there is ambiguity of some kind in the wording of the agreement between the parties. Mr. Graham maintains that there is no ambiguity here and I think that he is right. Where the grantor agrees with the grantee that a certain portion of the land being conveyed to the latter upon lease is to be reserved for the purpose of permitting the public to pass and repass "as if the said ... area were partor parts of a public street" that, to my mind, indicates prima facie an intention to reserve that area for public user for so long only as the grantee continues to enjoy the grant. There is no dispute that a lessee may agree with the owner to create such a limited right and the form of words used here seems to me altogether more apt to cover such a situation than to imply a joint dedication in perpetuity of such a right to the public.

36. In the court below the learned judge, dealing with this point, relied upon the words of Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council⁽⁶⁾ where at page 132 he said :

"          If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it."

With respect I doubt that those words are apt to cover more than the precise circumstances to which they were directed, or that they can be applied as a general principle other than to circumstances of a very similar character. In the case cited the point at issue concerned the amount of compensation payable in respect of the compulsory purchase of on interest in land by the Council. The interest in question concerned a plot of land upon which there had been a building which had been totally demolished by enemy action during the last war. The Town and Country Planning Act 1947 made provision for the service of a notice to treat upon the owner of the interest which it was sought to acquire. Such a notice was served on the company. Section 53(1) of that Act provided that where the interest in land had sustained war damage which at the date of the notice to treat had not been made good then "the value of the interest for the purposes of compensation payable in respect of a compulsory purchase shall ... be taken to be the value which it would have if the whole of the damage had been made good before the date of the notice to treat ...".

37. The House of Lords, reversing the decision of the Court of Appeal, held that in the case of a building which had been totally destroyed "making good" the whole of the damage would have meant the construction of a wholly new building. In that event the new building would have had a different identity from the former building and therefore would not have been subject to the Rent Restriction Acts so that the "value of the interest for the purposes of compensation" under section 53 should be arrived at upon that basis. The original building, had it not been destroyed, would have been subject to the control of the Rent Restriction Acts and thus the value of the interest would have been less and this fact would no doubt have been reflected in the quantum of the compensation.

38. In that case the legislative provisions are grounded upon a hypothesis which does not reflect the reality and is intended to replace it. In the present case there are two possible views which might be taken of a single body of factual data comprising the contractual terms, the regulations and possibly the plans. Unless it be said that there is simply no difference between a restricted right of way for public user and a street dedicated to the public - and I do not think that that has been contended for - there are two quite distinct kinds of right either of which might have been in view and which share a number of features in common. Whichever one of these rights be said to exist it will give to the public a licence (a) to pass and repass upon the specified area, (b) to do so without let or hindrance by the lessee or Government, (c) to do so without payment of any fee or other premium for the enjoyment of that right, (d) to do so, even at the most restricted view for a very considerable period of time. These may be said to be the major features of the intent which is manifestly common to the parties. What is not in common between then is a fully articulated and express agreement that this right accorded to the public is to earn the bonus under Regulation 22(1). A right of way is certainly intended. What is the precise nature of the right? If it is of one kind the result will be momentous for the developer financially; if of the other it will secure for the Crown authorities a mode of development which those authorities regard as important.

39. The words used in the agreement are of paramount importance. In the circumstances thus described it seems to me that to say that the public are to have a right to use the passage area as though it were a public street is a strong indication that the parties, by the express terms of their agreement, were making a distinction between the right which might have been and that which actually was created. The other considerations urged upon us by Mr. Graham to which I have referred above, although of unequal value between themselves, seem to me to lend support to this interpretation.

40. As to the alleged estoppel (see the respondents' notice), leaving aside the vexed question whether such an estoppel is capable of founding a claim, I do not think that such an estoppel can arise on the facts as they appear.

41. It is said for the respondents that the terms of the agreement were closely studied by the officers of the company before entering into the Sale and Purchase Agreement. It is claimed that the reference to Regulation 22 in Condition 20 was such a clear indication that they were to have the bonus provided by Regulation 22 that the Director of Public Works cannot now be heard to deny them. I do not believe that a sensible reading of these provisions could have induced a belief to that effect other than one which was unrealistically optimistic.

42. Mr. Graham frankly admits to being baffled by the inclusion of the mention of Regulation 22 in Special Condition 20. So am I. It is of a piece with the reference to Regulation 23(3) in the same condition. In relation to the latter regulation what Special Condition 20 seems to be saying is that the public car parking spaces provided by the developer shall be taken into account in the calculation of the gross floor area for the purposes of a regulation (Regulation 23(3)) which says in plain terms that they shall not be taken into account. One would think that Special Condition 20 should have said that the spaces so provided should be taken into account notwithstanding the provisions of Regulation 23(3).

43. Again, the actual words used are that the spaces shall be taken into account "for the purposes of Regulations 20, 21, 22 or 23(3)" (emphasis added). It must be said that the intention is far from clear; the use of "or" suggests that the calculation of the gross floor area shall be subject to such of the named regulations as, in the circumstances of the parties' agreement, may apply.

44. At all events the bare reference to Regulation 22 in that condition is sufficiently obscure to require of a prudent purchaser careful enquiry as to the intention behind it. It would be a rash purchaser who would rely on such an uncertain side wind to carry his expectations home. In the absence of clear words in Special Condition 13 showing that the parties were consenting to the dedication of a highway and that this was to attract the benefit of Regulation 22 I do not find it possible to infer such an intention from the reference to that regulation in Special Condition 20. I would allow the appeal.

Representation:

Graham 7 Nunn (Legal Dept.) for appellant.

Widdicombe, Q.C. & Ribeiro (Johnson Stokes & Master) for respondents.

(1) (1897) 11Ch. D. 327.

(2) (1907) 1 Ch. D. 704.

(3) (1872) L.T. New Series 758.

(4) (1904) A.C. 507.

(5) (1846) 2 Coll. 556.

(6) (1952) A.C. 109.