So Kwai Chung v. Wong Wai Ying Anita and Others

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Press Summary (Chinese)

FACV No. 12 of 2024

[2025] HKCFA 8

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 12 OF 2024 (CIVIL)

(ON APPEAL FROM CACV NO. 498 OF 2022)

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J U D G M E N T

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Chief Justice Cheung:

1.I agree with the joint judgment of Mr Justice Lam PJ and Mr Justice Keane NPJ.

Mr Justice Ribeiro PJ:

2.I agree with the joint judgment of Mr Justice Lam PJ and Mr Justice Keane NPJ.

Mr Justice Fok PJ:

3.I agree with the joint judgment of Mr Justice Lam PJ and Mr Justice Keane NPJ.

Mr Justice Lam PJ and Mr Justice Keane NPJ:

4.This appeal concerns the intersection of the rights of tenants in common with the principles of proprietary estoppel. At issue, in particular, is the nature and extent of the liability of a tenant in common (in this case the first defendant, “D1”) to a third party (in this case the plaintiffs, “the Ps”) where the other tenant in common (in this case the second defendant, “D2”) is bound by proprietary estoppel to allow a right of way over the land owned in common by both D1 and D2 (“Ds’ Land”). At trial, and in the Court of Appeal, this issue was resolved in favour of the Ps. D1 now appeals to this Court.

5.In the appeal, D1 contends that he cannot be precluded from denying the Ps’ right of way by the proprietary estoppel that was held to arise against D2. D1 argues that he did not know of, and was not involved in, the events that gave rise to the estoppel imposed in favour of the Ps against D2. The Ps do not seek to support the decisions of the courts below against D1 on the basis that D1 was himself directly bound by the proprietary estoppel that arose against D2. Rather, the Ps contend that one tenant in common may bind another tenant in common to the grant of a right to enter and pass over land held in common provided that the right does not go beyond what is reasonable and incidental to the grantor’s possession and enjoyment of the land, and does not interfere with the possession and use and enjoyment of the land by the other tenant in common. The Ps argue that D1 is bound by the right of way promised by D2 over Ds’ Land because, in the circumstances of the present case, the grant of the right of way did not go beyond what was reasonable and incidental to D2’s possession and use and enjoyment of Ds’ Land, and did not interfere with the possession and use and enjoyment of the land by D1.

6.For the reasons that follow, the Ps’ contentions should be accepted. The orders made by the trial judge should be varied to reflect the course of argument in this Court and the resolution of that argument. Otherwise, the appeal should be dismissed.

The events leading to the litigation

7.The Ps are the registered owners of a three-storey indigenous village house in Yuen Long, New Territories (“House No 456”). D1 and D2 are tenants in common of a small piece of vacant land, Ds’ Land, which is adjacent to House No 456. Ds’ Land provided the only means of access to House No 456 from the nearby public road.

8.Ds’ Land was co-owned by D1 and D2 as tenants in common. In February 2006, they acquired the land which was then known as Lot 2230 Remaining Portion and Lot 2222 Remaining Portion. At that stage, Lot 2230 Remaining Portion comprised what is now identified in the Lot Index Plan as Lot 2230 Sections A to E plus Ds’ Land.

9.For the purpose of village house development D1 and D2 subdivided the then Lot 2230 Remaining Portion into different sub-lots in June 2006, viz. Lot 2230 Sections A, B, C and a remaining portion (which comprised the present day Lot 2230 Sections D and E and Ds’ Land). Three village houses were built by them at Lot 2230 Section A (under Building Licence 9001), Lot 2230 Section B (under Building Licence 9002) and Lot 2230 Section C with Lot 2222 Remaining Portion (under Building Licence 9003) respectively. This development was completed in 2009.

10.In 2013, they further subdivided the then remaining portion of Lot 2230 into Sections D, E and remaining portion (which is Ds’ Land) with a view to constructing two more village houses. However, the plan was aborted after the subdivision. No structure had been constructed on these three sub-lots and Sections D and E were used as parking spaces.

11.House No 456 was owned by D2’s son before it was sold to the Ps in 2008. Prior to the sale, D2 represented to the Ps that D2 was the owner of Ds’ Land, and assured them that if they purchased House No 456, they could freely use Ds’ Land for the purpose of vehicular access to House No 456, there being no other means of access from the public road in the area to the house.

12.Like the three village houses built by D1 and D2 on the various sections of Lot 2230, House No 456 was built as a village house under what is known as the Small House Policy in Hong Kong. As these village houses were built without overall planning, vehicular access could be a problem. It was a specific concern of the Ps when they bought House No 456. The assurance from D2 that vehicular access through Ds’ Land would be provided was a crucial consideration for them.

13.The assurances given by D2 included a Pre-Sale Agreement signed by D2 which contained an “easement” or “right of way” clause. This clause promised that “at the time of completion [of the sale] … there will certainly be … an access through which … one could pass from the property (i.e. the [Ps’] Property) to … [the] public road”[1]. The easement or right of way so promised was not subject to any time limit and was not said to be terminable by the owners of Ds’ Land. The Ps completed their purchase of House No 456 in reliance on D2’s promises.

14.After the completion of the sale in July 2008, the Ps commenced use of Ds’ Land for access to and from the nearby public road. They also parked their two vehicles in the front porch of House No 456. For ten years thereafter, D1, though knowing of the Ps’ use of Ds’ Land, took no action to prevent or protest against this use by the Ps.

15.In October 2018, D1 placed nine concrete blocks on Ds’ Land in front of House No 456. The effect of this blockade was to prevent vehicular access between the public road and House No 456. The Ps sought and were granted an interlocutory injunction requiring the removal of the blockade to allow them the access they had been promised by D2 while restraining D1 from interfering with the Ps’ use and enjoyment of the right of way.

The decision at trial

16.At trial in the Court of First Instance, the Ps sought a declaration of their rights of access and a permanent injunction restraining the Ds from interfering with the Ps’ use and enjoyment of those rights.

17.In relation to the Ps’ claim against D2, the learned trial judge concluded that “an equity arises in favour of the [Ps] because the elements of proprietary estoppel has (sic) been established”[2] as against D2.

18.On behalf of D1, it was argued that the right of way promised by D2 could amount only to a licence to the Ps personally and not a right of property appurtenant to House No 456 as the dominant tenement of an easement burdening Ds’ Land as the servient tenement. On that basis, it was said that D1 was not bound by the right of access promised by D2.

19.The learned trial judge found as a fact that D1 did not know of the assurances given to the Ps by D2 before the Ps purchased House No 456. Nevertheless, the learned trial judge concluded in relation to D1 that[3]:

“In the present case, where (a) the [Ps] are asking for a domestic right of way by foot and private car, (b) the passage through [Ds’ Land] by car is transient – takes only a few seconds [footnote omitted], and (d) (sic) damage to [Ds’ Land] (which surface is by itself undulating and uneven) caused by such transient passage is, in my view, unlikely, I am prepared to find that [D1’s] right and enjoyment of the land has not been adversely affected. In any event, [D1] has not adduced any evidence to say otherwise. In fact, as submitted by Mr Chan for the [Ps], no suggestion has been made that the [Ds], particularly [D1’s], right to possession would be affected.”

20.It may be noted here that the learned trial judge’s conclusion was not based on a proprietary estoppel arising directly against D1. This is apparent from his legal analysis of the rights pertaining to co-ownership:

“… It seems to me that there should be no controversy to say as follows: A co-owner is free to dispose of or encumber his shares, interests or rights in land in any way he/she wants, as this is his property right. However, one thing he cannot do in disposing of or encumbering his shares, interests or rights in land is that in doing so he would interfere with the right of his co-owner to possession of the land and his other rights with respect to the land. As to whether the right of his co-owner to possession of the land and his other rights with respect to the land would be adversely affected, this is a question of fact which has to be considered in the circumstance of each individual case.”[4]

21.The learned trial judge made the following orders:

“(1) A declaration that the [Ps’] Property is entitled to an easement of a right of way over the [Ds’ Land] for the exercise of the easement of right of way by the [Ps], their servants or agents, successors and assigns by passing, repassing whether by vehicular or human traffic or otherwise, over and upon the road more particularly identified and coloured pink on the Plan attached hereto for the purpose connected with the [Ps’] reasonable and lawful enjoyment of the [Ps’] Property.

(2) An injunction to restrain [D1], whether by himself, servants or agents, from doing the following acts or any of them that is to say, preventing, prohibiting, stopping, hindering or otherwise interfering with, either directly or indirectly, the exercise of the easement of right of way by the [Ps], their servants or agents, successors or assigns by passing, repassing whether by vehicular or human traffic or otherwise, over and upon the road for the purpose of connected with the [Ps’] reasonable and lawful enjoyment of the [Ps’] Property.”[5]

A copy of the Plan referred to in the trial judge’s declaration is also attached to this judgment.

The decision of the Court of Appeal

22.D1 appealed against the decision of the learned trial judge. The Court of Appeal, following its earlier decision in Chin Lan Hong v Cheung Poh Choo[6] dismissed the appeal by D1, holding that “[D2] as tenant-in-common was entitled to deal with his interest in [Ds’ Land] by granting a right of way to the [Ps], and [D1] as the other tenant-in-common cannot interfere with that right”[7]. An appeal by D2 against the decision of the learned trial judge was also dismissed. D2 did not seek to appeal to this Court.

23.As to the appeal by D1, the Court of Appeal concluded that D1:

“… was not entitled to interfere with the right of way granted by his co-owner [D2] to the [Ps], particularly when he knew that the [Ps] had been enjoying the use of the easement for over ten years and his own admission that there is no other access in the area to the main public road apart from the use of [Ds’ Land] and he had also allowed the tenants of the houses he built in the same area to use [Ds’ Land] for access. We disagree … that because [D1] had no knowledge of the representation by [D2], therefore he should not be held liable. In our view, it is irrelevant that he had no actual knowledge of the promise by [D2]. The Judge was clearly entitled to take into account his knowledge of the fact that the [Ps] have been using [Ds’ Land] for access and his inaction during this long period in holding against him.”[8]

24.It may be noted that the Court of Appeal did not proceed on the basis that D1 was bound directly by proprietary estoppel against D2.

25.It is also desirable here to draw particular attention to the Court of Appeal’s finding that D1 had himself allowed the tenants of houses he built together with D2 in the same area to use Ds’ Land for access to and from the public road. This finding of fact is not challenged on the appeal to this Court. This right of access was the only means of access to those houses from the public road. Importantly for present purposes, it was the only means by which D1 could realise the value of his otherwise landlocked parcels of land for residential development.

The Questions before this Court

26.Pursuant to leave granted by the Appeal Committee, the following questions are now before this Court:

1.  Question 1: Whether the act and/or representation by one co-owner [D2] can give rise to an easement in respect of the whole property in favour of a third party [the Ps] being created or “granted” by a proprietary estoppel which binds the other co-owner [D1] who was not involved in, and had no knowledge of, the discussions and dealings between [D2] and the [Ps];

2.  Question 2: If the answer to Question 1 is “no”, what is the legal significance of [D1]’s knowledge that the [Ps] had been using the property for access and the long lapse of time before [D1] took action to block the access. In particular, whether [D1]’s knowing inaction can give rise to a proprietary estoppel by way of acquiescence as against [D1].

27.In relation to these questions, D1 made the following broad submissions in his written case:

1.  As to Question 1, because D1 was not responsible for, or privy to, the act and/or promise giving rise to the assurance given to the Ps, an easement cannot thus arise through the act and/or representation of D2 alone, and

2.  As to Question 2, D1’s knowing inaction was not sufficient to give rise to an acquiescence-based proprietary estoppel as against D1, as (i) D1 neither had knowledge of the Ps’ belief of their entitlement for a right over Ds’ Land nor of the Ps’ reliance; and that (ii) D1’s inaction (knowing or otherwise) in any event had not contributed to the Ps’ reliance, whether as a matter of substance or pleading.

28.D2 was joined as a necessary party to the appeal before this Court to enable him to advance submissions on the questions for which leave had been granted and assist the Court in considering if any relief should be granted to the Ps if D1’s appeal were successful. The order of joinder does not operate as leave for D2 to advance submissions to re-open the findings made by the courts below against D2. D2 supported D1’s position; his counsel did not add anything of substance on the Questions.

29.The Ps, in their written case, did not seek to meet D1’s submissions head on. The Ps did not seek to argue that D1 is bound directly by the proprietary estoppel that was found to arise against D2. That is hardly surprising given that the Ps’ success in the courts below did not depend upon a proprietary estoppel arising directly against D1. This approach on the part of the Ps avoids any difficulty that might arise in holding D1 himself directly bound by the proprietary estoppel that arose against D2 where D1 knew nothing of D2’s promise to the Ps. On the Ps’ approach, the finding that D1 did not know of the promises given by D2 to the Ps in reliance on which the Ps purchased House No 456 is immaterial to the basis on which D1 is bound by the right of way promised by D2. As to D1’s failure to assert his rights after the purchase, the Ps do not argue that they relied on D1’s inaction subsequent to their purchase in any way that would enure to their detriment so as to give rise to proprietary estoppel if D1 were now to be allowed to assert his rights as a co-owner of Ds’ Land to terminate the right of way promised by D2.

30.The Ps argue that, D2 having so conducted himself as to be bound by proprietary estoppel to the right of way, D1 is bound as co-owner by the promise by which D2 is bound to the Ps by proprietary estoppel because the right of way does not interfere with D1’s use and enjoyment of Ds’ Land. They submitted that D1 as co-owner was subject to the following principle set out in Gale on Easements following the judgment of Harris J in the Supreme Court of Victoria in Hedley v Roberts[9]:

“provided that he did not interfere with his co-owner’s rights in, and enjoyment of, the land, a tenant in common or joint tenant could incumber the land so as to bind both the co-owners and their successor in title.”[10]

31.On the basis of the concurrent findings of the courts below that vehicular access enjoyed by the Ps over Ds’ Land did not interfere with D1’s rights and enjoyment of the land, counsel submitted that the proprietary estoppel binding D2 satisfied the proviso in Hedley v Roberts. Accordingly, the equitable easement arising from the estoppel also “binds” the other co-owners and their successors[11].

Question 1

32.In response to the argument advanced by the Ps, D1 argues that the Court of Appeal erred in applying its earlier decision in Chin Lan Hong v Cheung Poh Choo[12]. It is said that this was a decision concerned with a co-owner’s right to grant a personal licence in respect of co-owned land to a third party. For D1 it was accepted that in such a case one co-owner of land may unilaterally grant a personal licence in respect of the co-owned land; but D1 emphasises that an easement “is a right over the land of another … it is a proprietary, not a personal, right and will therefore bind successors to the servient land and enure for the benefit of successors to the dominant land”[13]. It is said that an easement, as a proprietary right, cannot be granted by one tenant in common to a third party so as to bind the other tenants in common because it diminishes their proprietary rights as co-owners[14].

33.In his oral submissions, Mr Lok, of Counsel for D1, accepted that a co-owner can create an incumbrance over his own interest in the co-owned land provided that such incumbrance does not interfere with his co-owner’s rights in and enjoyment of the land. However, he submitted that since an easement transcends one co-owner’s interest, it necessarily interferes with the other co-owner’s proprietary rights and therefore cannot be granted by one co-owner alone.

34.Against D1’s argument is the view of Harris J in the Supreme Court of Victoria in Hedley v Roberts[15] that one tenant in common “can encumber his interest in the land so as to compel his co-owner to submit to the encumbrance if the encumbrance does not interfere with the right of that co-owner to his right to possession of the land and his other rights with respect to the land”. In that case, the court held that the unilateral grant of an easement by one co-owner for the maintenance and use of a water closet on the land was binding on the other co-owner because it did not interfere with the right and enjoyment of the co-owned property in light of the fact that the land was subject to other easements which already restricted the manner in which it could be used by all the co-owners. Though it was a judgment given in the context of an application for an interlocutory injunction, the principle stated by Harris J has often been cited and applied in Australia[16].

35.Counsel for D1, seeks support for his argument in the comment upon the reasons of Harris J by the learned editors of Gale on Easements[17]:

“It is, however, thought that an incumbrance in the nature of an easement would usually interfere with such rights and enjoyment.”

36.D1 relies on this editorial comment, which was applied in Cheung Leung Tak v 張秀雯 & Cheung Chi Hung[18], to argue that D2 was not able, as one co-owner of Ds’ Land, to grant an easement over that land because such a grant would be in derogation of his co-owners’ proprietary rights in Ds’ Land. On this basis, it is said that the declaration of the “easement of a right of way” must be set aside against D1 by reason of the adverse effect of the promised right of way upon his rights as a co-owner of Ds’ Land.

37.Consideration of D1’s argument must begin by referring to the body of authority that supports the proposition that a tenant in common is “entitled to deal, in whatever way he desires, with his own undivided share: he may lease it or dispose of his right to possession to a stranger as he likes without the concurrence of the other tenants in common.”[19] The unity of possession that is characteristic of tenancies in common allows one tenant in common to exercise rights of ownership that may affect the enjoyment of the land held in common by co-owners. It is settled that “one tenant in common can transfer its interest to another person, who will then have the same rights as the transferor previously had.”[20] In Bull v Bull[21] Denning LJ with whom Hodson and Parker LJJ agreed, explained the rights of co-tenants:

“Each of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account. If one of them should go so far as to oust the other he is guilty of a trespass: see Jacobs v Seward[22].”

38.The unity of possession that characterises tenancies in common means that each tenant in common is entitled to the possession and the use of every part of the land. In the absence of any agreement between the co-owners, the limitation on a tenant in common’s use is that he may not oust the other co-owner. Short of ouster and partition, Lord Hatherley LC held in Jacobs v Seward[23] that no action will lie against a co-owner if he uses the property in a lawful and legitimate way and nothing is done which destroys the benefit of the other co-tenant in the property[24]. In Cheung Lai Mui v Cheung Wai Shing[25], this Court held that if a tenant in common is in occupation without ousting his co-owner, the co-owner cannot maintain any claim for occupation rent though equity provides a remedy by way of equitable accounting upon partition or analogous proceedings.

39.This statement of principle by Denning LJ recognises that the right of one tenant in common to deal with the land held in common is limited by the consideration that one tenant in common may not “take more than his proper share”[26] of the benefit of the land held in common. What the statement of principle by Denning LJ does not provide, however, is practical guidance for ascertaining when one tenant in common has taken “more than his proper share” of the benefit of the land held in common.

40.In State of New South Wales v Koumdjiev[27], Hodgson JA, with whom Beazley JA and Hislop J agreed, observed that “there is little authority or textbook discussion concerning the position where one tenant in common of property purports to grant permission to another person to enter the property, and another tenant in common purports to refuse or revoke that permission.” After surveying such authority as could be found on the subject, Hodgson JA said[28]:

“Although one tenant in common can transfer or lease its interest, I do not think one tenant in common can, without such a transfer or lease, grant a licence to another, irrevocable by other tenants in common, if that licence is of a kind that goes beyond what is reasonable and incidental to the grantor’s possession and use and enjoyment of the property in common with the other tenants in common, and which interferes with the possession and use and enjoyment of the property by other tenants in common.”

41.This passage recognises that the exercise of the right of one tenant in common to deal with the land held in common by granting a right to a third party to enter the land may affect other tenants in common. It is important, however, to note the qualification upon this proposition. Even in situations where the other tenants in common may not seek remedies by way of an action for trespass (because there is no ouster) or account (because they do not bring partition proceedings), if the right granted is apt to exceed the grantor’s “proper share” of the enjoyment of the land held in common, the other tenants in common may terminate the right on the basis that they are not bound by it. Whether the grantor’s “proper share” of the enjoyment of the land held in common has been exceeded depends upon whether the right granted goes beyond what is reasonable and incidental to the grantor’s possession and use and enjoyment of the property in common with the other tenants in common, and whether it interferes with the possession and use and enjoyment of the property by other tenants in common.

42.In Koumdjiev, Hodgson JA explained the circumstances in which a right granted to a third party by one tenant in common may be terminated by another. He said[29]:

“For example, suppose there are two tenants in common of a small house, and one of them purports to grant a licence to twenty people to live in the house. If this amounted to excluding the other from possession, it would be a trespass; but if it fell short of excluding the other person, but was substantially detrimental to the other tenant in common’s use and enjoyment of the property, in my opinion such a licence could be terminated by the other tenant in common, assuming that it went beyond what was reasonable and incidental to the grantor’s possession and use and enjoyment of the property. That is, in my opinion, any licence in excess of what is reasonable and incidental to one tenant in common’s possession and use and enjoyment of the property, and which prejudices the other tenant in common’s possession and use and enjoyment of the property, is a licence terminable by the other tenant in common. Otherwise, in my opinion, there can be no reasonable reconciliation of the rights of both tenants in common to have possession and use and enjoyment of the property.”

43.The analysis of Hodgson JA in Koumdjiev is consistent with the course of earlier authority and has subsequently been applied[30]; and it has the additional merit of providing a useful test for reconciling the rights of all tenants in common to the proper sharing of the benefit of their property. On this approach, the decisive question in the present case is whether D1 was entitled to terminate the right of way promised to the Ps by D2 on the ground that it went beyond what is reasonable and incidental to D2’s use and enjoyment of Ds’ Land and prejudiced D1’s possession and use and enjoyment of that land.

44.It is a distraction from the proper consideration of this question to focus upon the notion that an easement is a right of property rather than a personal licence. Three points may be made here. First, the whole point of authorities such as Bull v Bull[31] and Koumdjiev[32] is that the proprietary rights of one tenant in common may be adversely affected – albeit subject to a limitation by reason of the need for the fair sharing of the benefit of the common property – by a grant or promise made to third parties by another tenant in common. The grantor or promisor, in making such grant or promise, is exercising rights that are enjoyed by a tenant in common as a co-owner of land by virtue of the unity of possession. In other words, it is a necessary incident of co-ownership. In a case where one co-owner makes a formal grant of rights to enter the co-owned land to a third party, the efficacy of the grant as against other co-owners falls to be determined by the application of the principles stated in Bull v Bull and Koumdjiev.

45.The second point to be made here is that, as explained long ago by Lord Parker of Waddington in Sinclair v Brougham[33], a court of equity begins by identifying rights that give rise to a personal equity and ends in creating “what were in effect rights of property, though not recognised as such by the common law”. On this approach, the proprietary effect of the personal rights identified by the court is commensurate with the remedy that the court regards as appropriate in the circumstances of the particular case to vindicate the personal rights that arise by reason of the parties’ dealings with each other. By reason of the doctrine of proprietary estoppel, in this case the proprietary rights of D2 as a co-owner can be diminished by reason of the dealings between himself and the Ps.

46.The third point to be made here, is that, for the purposes of the rules governing the relationship between tenants in common, there is no good reason to treat an assurance of a right of way conferred by contract by one tenant in common to a third party grantee as something different from an assurance that is binding on the promisor by reason of the operation of the doctrine of proprietary estoppel. Certainly, no good reason was suggested by the parties in the course of argument.

47.It may well be that the full panoply of contractual remedies that are available to a grantee under a contract are not available to a promisee who must rely upon a proprietary estoppel rather than a formal grant of a legal right. In this regard, in relation to proprietary estoppel, “it is the reliant detriment which makes it unconscionable for the promisor to go back on his promise. Detriment is relevant to remedy because a slavish enforcement of the promise may be so completely disproportionate to the detriment that it goes much further than necessary to put right the unconscionability inherent in the repudiation of the promise.”[34]

48.Proprietary estoppel, and the remedies associated with it, protect a promisee against the detriment which will flow from the change in position which the promise was induced to make in reliance on the promise if the promisor resiles from the promise[35]. But the doctrinal differences between contract and estoppel, and their associated remedies, are immaterial to the binding effect of dealings with third parties by one tenant in common so far as the effect of those dealings on other tenants in common are concerned. That said, it may be accepted that the rights or remedies available to a promisee as against a tenant in common who has not made the promise that founds a proprietary estoppel cannot rise higher than their source in the promisee’s rights against the promisor.

49.This Court affirmed in 2009 that the proprietary consequences of personal rights and obligations between the parties in a case concerned with proprietary estoppel depend on the remedies that a court may grant. In Luo Xing Juan v Estate of Hui Shui See[36] Ribeiro PJ, with whom Li CJ, Chan PJ, Nazareth NPJ and Brennan NPJ agreed, referred with evident approval to the following observations of Brennan J in Waltons Stores (Interstate) Ltd v Maher[37]:

“The element which both attracts the jurisdiction of a court of equity and shapes the remedy to be given is unconscionable conduct on the part of the person bound by the equity, and the remedy required to satisfy an equity varies according to the circumstances of the case. As Robert Goff J. said in Amalgamated Property Co. v. Texas Bank [1982] QB 84, at p. 103: ‘Of all doctrines, equitable estoppel is surely one of the most flexible.’ Sometimes it is necessary to decree that a party’s expectation be specifically fulfilled by the party bound by the equity; sometimes it is necessary to grant an injunction to restrain the exercise of legal rights either absolutely or on condition; sometimes it is necessary to give an equitable lien on property for the expenditure which a party has made on it: see Snell’s Principles of Equity, 28^th ed. (1982), p. 562. However, in moulding its decree, the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct.”

50.A promise to provide a right of way can be the subject matter of a claim based on proprietary estoppel[38]. Once the elements of the estoppel are established, the court must decide the most appropriate form of relief having regard to the circumstances at the time of the judgment[39]. In Guest v Guest[40], Lord Briggs JSC said:

“… In many cases, once the equity is established, then the fulfilment of the promise is likely to be the starting point, although considerations of practicality, justice between the parties and fairness to third parties may call for a reduced or different award.” (our emphasis)

51.D1 is a third party to the proprietary estoppel arising from D2’s promise to the Ps. Based on the above analysis of the rights between co-owners, the crucial issue is whether D1’s use and enjoyment of Ds’ Land would be prejudiced.

52.In the present case, the trial judge and the Court of Appeal were not required, in order to do justice between the parties, to go further than making a declaration of the right of way and granting an injunction restraining the D1 from interfering with its use by the Ps. In this Court, however, the attention of both D1 and the Ps shifted in the course of oral argument to focus upon the potential for issues to arise on a sale by the Ps of House No 456 or the sale by the Ds of Ds’ Land. Further relief would be necessary against the Ds to ensure that any such dealings would not result in the Ps suffering the loss of the value of House No 456 as a property with road access[41]. The shift in the focus of argument threw into question whether the right of way in favour of the Ps enured for the benefit of their successors in title and against the successors in title to Ds’ Land.

53.These concerns direct attention to whether the orders of the trial judge should be varied to bind the successors in title of D1 and D2 by the right of way declared by the trial judge. It should be accepted that, in order to prevent unconscionable conduct by D2, the right of way which binds him (and by which D1 may consequently be bound) must bind his successors in title. It is plainly the case that the assurances D2 gave to the Ps were apt to induce them to pay a price for House No 456 that reflected the value of permanent access to the public road as appurtenant to House No 456. A declaration binding the Ds’ successors in title in favour of the Ps and their successors in title is necessary to protect the Ps against the detriment that would otherwise enure to them from the sale of Ds’ Land free from the binding effect of the promise made by D2. It is also necessary to protect the Ps should they be minded to sell House No 456 in that otherwise they would lose the value of their purchase from D2 of a house with the benefit of access to the public road.

54.In relation to the position of D1, Mr Lok on behalf of D1, referred the Court to the decision of Sen J in Haran Chandra Mukhopadhya v Shyama Charan Chakravarty.[42] In that case, Sen J accepted that a co-tenant is entitled to use land in a normal, natural and business-like manner. His Lordship accepted that a lease of the land granted in accordance with this use is valid and cannot be interfered with by another tenant in common. On the other hand, his Lordship held that one co-tenant cannot burden land with an incumbrance that will affect the rights of other co-tenants where the imposition of the burden is not made in the course of the ordinary and business-like use of the land. Because the imposition of a servitude cannot be said to be necessary for the ordinary enjoyment of the land, his Lordship considered that one co-tenant has no right to burden the co-owned land with a right of way. Sen J took the view that the grant of such a right does not constitute a natural business-like and normal use of the land in that it amounts to an imposition of a burden upon the land made entirely for the benefit of the grantor and to the detriment of his co-owners. In such a case, a co-tenant may refuse to be bound by the grant. This reasoning invites three comments on this decision. First, whether use of land is a “normal, natural and business like use of land” is not to be determined by a test of necessity: there may be any number of uses which are normal, natural and business-like, none of which are “necessary” uses of the land.

55.Secondly, whether a use of land amounts to the imposition of a burden to the detriment of co-tenants depends entirely upon the factual and legal context in which the relevant dealing takes place. While the grant of an easement will usually impose an additional burden on the servient tenement, whether it does prejudice the enjoyment of the land by the other co-owner, or is even apt to do so, may depend upon the extent to which the uses to which the servient tenement may reasonably be expected to be put may be diminished by the exercise of the right granted to the third party. This is the point made in the passages cited earlier in this judgment from Bull v Bull and Koumdjiev.

56.Thirdly, it is to be noted that the very terms of the editorial comment by the editors of Gale on Easements on which D1 relies recognises that the imposition of a right of way does not, as a matter of law in every case, impose a burden to the detriment of a co-owner. The comment recognises, as do the passages cited from Bull v Bull and Koumdjiev, that the issue is not an abstract or technical matter of law, but a practical matter of substance in relation to the beneficial enjoyment of the land. For these reasons, the decision of Sen J is not persuasive in D1’s favour.

57.Further in relation to the editorial comment in Gale on Easements cited above, one can say that this is, indeed, an unusual case. It is difficult to see that there was ever any worthwhile use for Ds’ Land, given its location and small area, other than to provide road access to adjacent sites being developed for residential housing by D1 and D2. Most importantly in this regard, both D1 and D2 allowed third parties vehicular access over their common land to facilitate their exploitation of other parcels owned by each of them in the vicinity. That access was, of course, the only means of access to those parcels of land from the public road. That being so, use by the Ps of the Ds’ Land for vehicular access to House No 456 – as with other neighbouring houses – could never sensibly be said to go beyond what is reasonable and incidental to D2’s possession and enjoyment of Ds’ Land. Nor could it ever have been said that such use is apt to interfere with the possession and use and enjoyment of that land by D1.

58.In this case, D1 has himself used Ds’ Land for the same purposes as D2. In the context in which the dealings in question occurred, these purposes seem to be the only worthwhile uses of Ds’ Land. That being so they are reasonable and incidental to D2’s possession of the co-owned land. The use of the land for those purposes by the Ps did not derogate from D1’s rights as co-owner in any material way. They were never apt to do so. It is significant here that there was no suggestion, at any time, by D1 that D2 was, by honouring his promise to the Ps, deriving more than his fair share of the use and enjoyment of Ds’ Land. Neither the trial judge, nor the Court of Appeal found, nor could they find, that the use by the Ps of Ds’ Land for vehicular or pedestrian access to House No 456 went beyond what was reasonable and incidental to the use by D2 of the land held in common with D1, or that the licence to the Ps unreasonably interfered with the rights in or enjoyment of the land by D1. All that being so, D1 was bound by, and not entitled to terminate, the right of way which D2 bound himself to provide to the Ps.

59.In this respect, the situation in the present case is similar to that in Hedley v Roberts where the easement created by one co-owner did not interfere with the non-exclusive occupation and enjoyment of the land by the other co-owner.

60.In the course of oral argument in this Court a question arose as to when was the correct time to determine whether or not a grant of a right of way was within the limits of a co-owner’s power. On one view, the issue should be determined as at the date of grant. On the other view, it should be determined at the time the co-owner seeks to assert that he is not bound by the grant. In the particular circumstances of this case, it is not necessary to resolve this question in order to decide the case. That being so this Court should leave the resolution of the question until a case that raises the question with the appropriate level of concreteness arises. It is not necessary to decide the question in this case because it is apparent that at no time could it have been held that the grant of the right of way exceeded what was reasonable and incidental to D2’s possession and enjoyment of Ds’ Land or that it interfered with the possession and use and enjoyment of Ds’ Land by D1.

61.For these reasons, the answer to Question 1 is “Yes”.

Question 2

62.Given that the answer to Question 1 is in the affirmative, Question 2 does not arise.

63.However, in light of the foregoing discussion, it may not be out of place to say that D1’s knowing inaction in response to the exercise by the Ps of their right of way over Ds’ Land provides compelling support for the conclusion that the Ps’ right of way does not go beyond what was reasonable and incidental to D2’s possession and enjoyment of Ds’ Land, and does not interfere with the possession and use and enjoyment of the land by D1. To repeat the point made earlier, there was no evidence of any suggestion, during the long period of knowing inaction on the part of D1, that his possession or use or enjoyment of Ds’ Land had been adversely affected in any way by the use by the Ps of their right or way.

Orders

64.In order to give effect to these views as to the extent of the protection necessary to prevent unconscionable conduct on the part of D2, the orders made by the learned trial judge should be varied. This Court should make the following orders:

(1)  A declaration that Section E of Lot No 2221 in Demarcation District 120 (“House No 456”) is entitled to an easement of a right of way over the Remaining Portion of Lot No 2230 in Demarcation District 120 for the exercise of the easement of a right of way by the Plaintiffs, their servants or agents, successors and assigns by passing, repassing whether by vehicular or human traffic over and upon the land more particularly identified and coloured pink on the Plan attached here for the purpose of access to and from Shap Pat Heung Road to House No 456 as a domestic dwelling.

(2)  An injunction to restrain the Defendants and their successors and assigns, whether by themselves, their servants or agents, from doing the following acts or any of them, that is to say, preventing, prohibiting, stopping, hindering or otherwise interfering with, either directly or indirectly, the exercise of the easement of right of way by the Plaintiffs, their servants or agents, successors or assigns by passing, repassing whether by vehicular or human traffic over and upon the land for the purpose of the reasonable use of House No 456 as a domestic dwelling.

65.Otherwise, the appeal should be dismissed.

Chief Justice Cheung:

66.Accordingly, the Court unanimously dismisses the appeal, save that the orders made by Deputy Judge Kenneth Wong are varied as indicated in paragraph 64(1) and (2) above. On a nisi basis, we order that the 1^st Defendant pay to the Plaintiffs their costs of the appeal, to be taxed if not agreed; and make no order as to the 2^nd Defendant’s costs. If any party wishes to vary the costs order nisi, written submissions should be filed within 14 days of the handing down of this judgment and the Court will make a final order as to costs on the papers.

Mr Michael Lok and Ms Valerie Kwok, instructed by Ho & Partners, for the 1^st Defendant (Appellant)

Mr Stewart Wong SC and Mr Sunny Chan, instructed by K C Ho & Fong, for the 1^st to 3^rd Plaintiffs (1^st to 3^rd Respondents)

Mr George Chu, instructed by Leung Kin & Co, for the 2^nd Defendant (4^th Respondent)