Chiu Shu Choi v. Merrilong Dyeing Works Ltd

HCA004159/1983

BETWEEN

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Coram: Hon. Mantell J.

Dates of Hearing: 16 to 18 April 1984 and 1 May 1984

Date of Delivery of Judgment: 21 May 1984

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JUDGMENT

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1. The William Chandler Factory Building stands at the junction of Castle Peak Road and Kom Tsun Street, Kowloon. It has nine floors above ground level. The ninth, or top floor, is owned by the plaintiff; the eighth is owned by the defendant. There are two staircases going from the ground to the ninth floor. There is a lift which runs from the ground floor to the eighth. The plaintiff claims the right to get to the ninth floor by using the lift as far as the eighth and then continuing by the stairs. That means crossing part of the defendant's premises. Both the plaintiff and the defendant derive their respective titles from Esther Leung who assigned the eighth floor to the defendant in December 1980 and the ninth floor to the plaintiff in September 1981. It is conceded that the plaintiff can have no right greater than that to which Esther leung was entitled immediately after the assignment of the eighth floor to the defendant in December 1980. The question is, therefore, what was the effect of that assignment? The plaintiff puts his claim in three ways:

(1)	at the time of the assignment of the eighth floor to the defendant, it was the common intention of the parties that the assignor should thereafter have the right which the plaintiff now claims,
(2)	as a way of necessity,
(3)	by express reservation.

2. As with so many buildings in Hong Kong intended for multiple occupation, the William Chandler Factory Building has been notionally divided into equal undivided shares. The number of shares equals the number of floors. So what was assigned in any particular case was one or more shares in the building, depending upon the number of floors sold, together with the exclusive right to occupation and enjoyment of the floor or floors in question. Again as is usual, each assignee took subject to and with the benefit of a Deed of Mutual Covenant. That deed is intended to regulate the rights and obligations of all the owners inter se. So it is more precise to say that Esther Leung assigned to the defendant in the first place and the plaintiff in the second a tenth share in the building with the exclusive right to occupation and enjoyment of their respective floors. The Deed of Mutual covenant picks up the terms of the assignments at Clause 1:

"Each of the parties hereto for himself and his executors administrators and assigns hereby grants unto each of the other parties hereto their or his respective executors administrators and assigns the full right and privilege to the exclusive use occupation and enjoyment and the rents and profits of the part of the said building ..... TO THE INTENT that each of the parties hereto shall be entitled to the exclusive use occupation and enjoyment and the rents and profits of the part of the said building ....."

By the Third Schedule, it is provided, inter alias:

"Each undivided part or share of and in the said premises and building and the right to the exclusive use, occupation or enjoyment of any part of the said building shall be held by the person entitled thereto with the benefit of the following :-

1.

Full right and liberty for the owner or occupier for the time being of it and all persons authorised by him (in common with all other persons having the like right) to go pass and repass over and along the entrance, staircases, landings and passages and lifts in the said building for the purposes connected with the proper use and enjoyment thereof."

The Fourth Schedule imposes upon the owners including the owner of the ninth floor in proportion to the number of shares held, the general costs, charges and expenses of maintaining the building including charges for electricity and

"the cost and expenses of operating, maintaining, repairing, servicing, replacing and renewing all the lifts in the said building provided that the owner of the Factory Unit on the Ground Floor of the said building shall not be liable for such costs and expenses and shall not be entitled to use any of the lifts notwithstanding anything herein contained."

The original design and construction of the building was such as not to provide any connecting lobby between the lift and the stairway notwith-standing that the lift shaft and one set of stairs are next to each other. Instead, the lift opens directly onto each of the first to eighth floors and the staircase was approached from each floor through a smoke lobby. Sometime between the issue of the Occupation Permit in 1969 and the assignment to the defendant, the eighth floor was re-arranged in a way which can only be appreciated properly from the plans but which had the effect of creating a combined lift and stair vestibule to which access from the eighth floor was obtained through a roller shutter door. The smoke lobby was demolished. In the result, the eighth floor gained a little from the area previously occupied by the smoke lobby and lost rather more to the newly enclosed area. The new arrangement also provided a ready and fairly private passage from the lift to the staircase. If the eighth and ninth floors were to be in separate occupation and if the owner of the ninth floor was to have the use of the lift, these arrangements would seem to be an improvement on the original design from the point of view of convenience and security. However, it had the considerable demerit of contravening the Fire Regulations.

3. Both the eighth and ninth floors came into the ownership of Esther Leung in December 1979. Since 1973, the two floors had been in the common ownership of C.C. Tse Estates and before that, in what I choose to call, related ownership. It seems probable if not certain, therefore, that the alterations took place at some time when both floors were in the same ownership. There is no direct evidence on the point but I readily infer that for a period of time up to the date of assignment to the defendant, access to the ninth floor had, in general, been by way of the lift to the eighth floor and then onwards by the staircase.

4. In the summer of 1981 the Fire Authority took an interest in the alterations to the eighth floor and served on the defendant notices requiring it to reinstate the premises so as to comply with Fire Regulations. This they did by restoring the smoke lobby and by blocking up the opening between the lift entrance and the stairs. But they left intact so much of the added structure as had the result of making it necessary to pass through the roller shutter door into the main portion of the eighth floor and then through the doors of the smoke lobby in order to get from the lift to the stairs. When the plaintiff had first looked at the ninth floor with a view to buying it, he had been able to use the lift, turn left and go up to the stairs without passing beyond the roller shutter door. By the date of the assignment he could no longer do that and he could only make use of the lift if the roller shutter door happened to be open. He could, of course, get access to the ninth floor from the ground by either of the staircases. He did not object at first because, as he told me, he tried to resolve the difficulty through an intermediary. It was not until March 1983 that any formal letter of objection was sent and that was the start of these proceedings.

5. The William Chandler Factory Building, as its name suggests and the crown lease requires, is given over to factory use. That is the use put to the eighth floor by the defendant. It is the use intended for the ninth floor by the plaintiff. He intends to employ something over 40 people in the making of knitwear. Naturally his employees would come and go each day, sometimes more than once. Deliveries would have to be made. The finished products would have to be taken out. If the plaintiff has his way, all this traffic would use the lift. All of it would have to cross over some part of the defendant's premises in order to get to the stairs. That would be a serious encroachment upon the defendant's occupation and enjoyment of the eighth floor. Without the right to pass and repass, however, and the use of the lift, the ninth floor would have very little value as all and probably none as a factory.

6. So I turn to Mr. Litton's first and main submission: that at the time of the assignment, Esther Leung and the defendant must be presumed to have shared an intention that Esther Leung and her successors or assigns should retain for the benefit of the ninth floor the right to pass from the lift to the stairway, and as a gloss, perhaps, that such a right arises as a legal incident of their relationship as joint owners with others of the William Chandler Factory Building.

7. What are the principles involved where an owner alienates one of two adjoining tenements? I believe the following can be extracted from the cases:

I am of the opinion that the proof of a contrary common interest encompasses all the so called exceptions including ways of necessity. I recognise that there is and has been a view that ways of necessity are sui generis having their foundation in public policy. In my opinion, the approach of Lord Justice Brightman in Nickerson v. Barraclough⁽⁴⁾ is to be preferred:

"I accept that there are reported cases, and textbooks, in which public policy is suggested as a possible foundation of the doctrine, but such a suggestion is not, in my opinion, correct. It is well established that a way of necessity is never found to exist except in association with a grant of lands see Proctor v. Hodgson (1855) 10 Exch. 824, where it was held that land acquired  by escheat got no way of necessity, and Wilkes v. Greenway (1890) 6 T.L.R. 449, where land acquired by prescription got no way of necessity. If a way of necessity were based upon public policy, I see no reason why land acquired by escheat or by prescription should be excluded. Furthermore, there would seem to be no particular reason to father the doctrine of way of necessity upon public policy when implication is such an obvious and convenient candidate for paternity. There is an Australian case, North Sydney Printing Pty. Ltd. v. Sabemo Investment Corporation Pty. Ltd. [1971] 2 N.S.W.L.R. 150, where that conclusion was reached. Furthermore, I cannot accept that public policy can play any part at all in the construction of an instrument; in construing a document the court is endeavouring to ascertain the expressed intention of the parties. Public policy may require the court to frustrate that intention where the contract is against public policy, but in my view public policy cannot help the court to ascertain what that intention was."

Nor do I think that there is any separate category arising as a legal incident of some special relationship. The relationship between the parties may be a factor in determining their intentions and, in my view, Liverpool Corporation v. Irwin⁽⁵⁾ is not to be read in any other way.

"If the court were satisfied that in order to make the transaction between landlord and tenant sensible and effective according to its terms, they must have intended some particular right to be reserved to the landlord, it might be possible to imply an appropriate reservation."⁽⁸⁾

8. Applying those principles to the present cases: has the plaintiff raised the necessary inference that it was the common intention of the parties, that is Esther Leung and the defendant, that there should be some reservation of a right of way for the benefit of the ninth floor over the eighth floor from the lift to the staircase? There is no direct evidence either way. If the proposition is to be established, it must be as a result of necessary inference. I have taken into consideration that the ninth floor is virtually unusable as a factory without recourse to the lift; that as a matter of reasonable inference, access to the ninth floor prior to the assignment to the defendant was achieved by means of the vestibule connecting the lift and the stairway on the eighth floor; that at the time of the assignment to the defendant it was apparent to all parties that there had been such previous user by virtue of the existence of the vestibule on the eighth floor; that there is no contrary indication to the implication contended for as, following the assignment, the defendant did not seek to make any alteration to the previous arrangement on the eighth floor until required to do so by the Fire Authority. However, what weighs most heavily with me is the fact that the assignment was made subject to the Deed of Mutual Covenant which clearly contemplates the use of the lift by the owner of the ninth floor for which use, the owner of the ninth floor is required to make his contribution towards the running and maintenance costs. That is in contradistinction to the position of the owner of the ground floor who may not use and is not required to pay for the lift. If the assignment and the Deed of Mutual Covenant are to be read together, as I believe they must, then the only way to make them "sensible and effective according to their terms" and, in my judgment, to give expression to the common intention of the parties is to find that it was intended that some right of way should be reserved. I have not disregarded the point that any user of the lift to service the ninth floor as a factory must detract from the enjoyment of the eighth and that in determining the common intention of the parties at the time, one must have regard to that consideration being in the corporate mind of the defendant: though not I think of the precise circumstances envisaged by the plaintiff's intended use. Nor have I failed to consider the submission that here was a grant which, by the words "all the estate right, title, interest, property claim and demand whatsoever of the vendor therein" negates expressly any implied reservation. Had the assignment stood alone? I think I might well have acceded to the submission but reading the assignment and the Deed of Mutual Covenant together, I do not take the view that the words of the assignment are sufficient to negate the common intention that aright of way should be reserved to the grantor. I am not faced with a claim for rectification of the Deed of Mutual Covenant, but had I been the evidence in this case standing alone may well have satisfied me that rectification should be ordered.

9. With regard to Mr. Litton's second submission, I have already indicated that in my view ways of necessity are not to be treated as a class apart. If I am wrong about that, I should say that I would not find that this was a way of absolute necessity in the sense that such ways have been defined in the old cases simply because of the remaining access by the stairway. I might have taken a different view on the facts if the building had been higher. However, I have taken account of the importance of the lift and the right of way across the eighth floor to the use of the ninth floor as a factory in coming to my conclusion as to the common intention of the parties.

10. It is not necessary to say more in relation to Mr. Litton's third submission other than that I reject it in favour of the submissions of Mr. Mills-Owens so succinctly set out in his skeleton argument. I cannot construe the unrectified Deed of Mutual covenant as expressly reserving any right of way across the eighth floor however revealing it may be as to the intention of the parties.

11. In the result I find that the plaintiff is entitled to a right of way from the lift to the nearest staircase which in present circumstances must be via the smoke lobby. I do not think that he is entitled to have the physical arrangements on the eighth floor restored to what they were at the time of the assignment to the defendant. The terms of the declaration prayed for in the Statement of Claim are, I think, too wide but I would be prepared to give a declaration to pass from the lift to the door of the smoke lobby for the purposes connected with the proper use and enjoyment of the ninth floor as a factory.

Further argument

12. The plaintiff asks for costs. That application is opposed on the basis that in the event the plaintiff has succeeded only on a ground which came into his claim by way of amendment towards the end of the hearing. Of course, I have a complete discretion if I think the amendment is a substantial one and the plaintiff has only succeeded on the basis of that amendment to disallow the plaintiff his costs up to the date of the amendment and to make an order in favour of the defendant. I do not propose to do that. The pleading may not have been altogether clear at the start of the hearing and it is right, as Mr. Wei says, that it was only towards the end that the defendant knew precisely the nature of the case it had to meet. But all the history and facts which were relied upon by the plaintiff were pleaded and the plaintiff eventually succeeded in his claim by application of the law, as I have found it to be to those circumstances as pleaded. Had there been any difficulty or embarrassment from the defendant's point of view, as I indicated at the time, I would have allowed an adjournment for further evidence to be called to meet the new basis in law on which the claim was being put forward. In those circumstances, I propose to give the plaintiff the costs of this action save for the costs of the amendment itself and any consequential amendments which arose as a result of that amendment.

(1) [1879] 12 Ch. D. 31 per Thesiger L.J. at 49

(2) [1961] 1 Ch. 808 at 830

(3) [1929] 2 K.B. 117 at 127

(4) [1981] 1 Ch. 426 per Brightman L.J. at 440/441

(5) [1977] A.C. 239

(6) 1 H & C 112

(7) [1929] 2 K. B. 117 at p.127

(8) [1951] 1 Ch. 808 at 816

Representation:

H. Litton, Q.C. & A. Ismail (Raymond Tang & Co.) for plaintiff.

R. Mills-Owens, Q.C. & Paul Wei (Tsang, Chau & Shuen) for defendant.