T.S. Cheng and Sons Limited v. The Attorney General

HCMP001595/1986

1986, No. M.P. 1595

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

_________________

BETWEEN

_____________

Coram: The Hon. Mr Justice Macdougall in Court

Dates of Hearing: 11th-14th and 25th November 1986

Date of Delivery of Judgment: 16th December 1986

___________

JUDGMENT

___________

1. In these proceedings against the Crown by way of originating summons, the plaintiff seeks various declarations in respect of 2 Old Peak Road which is registered in the Land Office as the Remaining Portion of Subsection 1 of Section A of Inland Lot No. 648.

2. In order to understand the nature of the relief sought, it is necessary to trace the history of all relevant events from the date of the grant under the original Crown Lease of 7th March 1861.

3. By that lease Her Majesty Queen Victoria demised to a Mr. Munro, for a term of 999 years from 26th December 1860 and at a yearly rent of $41.64, a piece of land which included the land forming the subject of these proceedings.  Although there is no evidence as to when the original lot was subsequently subdivided, it is accepted by the parties that the land with which they are now concerned was the subject of a third subdivision of that lot.

4. For the sake of brevity, I propose to set out only that portion of the Crown Lease upon which the parties based their arguments.

"AND THE SAID Daniel George Munro for himself, his Heirs, Executors, Administrators and Assigns cloth hereby covenant, promise and agree, to and with Her said Majesty, Her Heirs, Successors and Assigns by these presents, in manner following, that is to say, that he - the said Daniel George Munro, his Heirs, Executors, Administrators or Assigns shall and will yearly, and every year, during the said term of nine hundred and ninety nine years hereby granted, well and truly pay or cause to be paid to Her said Majesty, Her Heirs, Successors and Assigns, the said yearly Sum of forty-one dollars and sixty-four cents, clear of a11 taxes and deductions as aforesaid in the several days and times, and in the manner herein before reserved and made payable; AND ALSO that he - the said Daniel George Munro, his Executors, Administrators and Assigns shall and will during all the said term hereby granted, bear, pay and discharge all taxes charges and impositions whatsoever, as are or shall be hereafter assessed or charged on, or in anywise imposed upon or in respect of, the said premises hereby demised or intended so to be or any part thereof. AND that he the said Daniel George  Munro, his Executors, administrators or Assigns, shall and will, before the expiration of the first year of the term hereby granted, at his and their own proper costs and charges, in a good, substantial and workman-like manner erect, build and completely finish fit for use, one or more good, substantial and safe brick or stone messuages or tenements, upon some part of the ground hereby demised, with proper fences, walls, sewers, drains and all other usual or necessary appurtenances, and shall and will lay out and expend thereon the Sum of four hundred and sixteen dollars and upwards in the erection of one or more Villa Residences only, in accordance with the Terms of Sale, which said messuage or tenement, messuage or tenements, shall be of the same rate of building, elevation, character and description, and shall front and range in on uniform manner with the messuages or tenements in the same street, and the whole to be done to the satisfaction of the Surveyor of Her said Majesty, Her Heirs, Successors or Assigns; AND ALSO that the said Daniel George Munro, his Executors, Administrators and Assigns, shall and will from time to time, and at all times, from and after the said messuage or tenement, erections and buildings on the said place of ground hereby demised shall be respectively completed and finished, during the remainder of the said term hereby granted, when, where, and as often as need or occasion shall be and require, at his and their own proper   costs and charges, well and sufficiently Repair, Uphold, Support, Maintain, Pave, Purge, Scour, Cleanse, Empty, Amend and keep the said messuage or tenement, messuages or tenements, erections and buildings, and all the Walls, Rails, Lights, Pavements, Privies, Sinks, Drains and Watercourses thereunto belonging, and which shall in any wise belong or appertain unto the same, in, by and with all and all manner of needful and necessary reparations, cleansings and amendments whatsoever, the whole to be done to the satisfaction of the Surveyor of Her said Majesty, Her Heirs, Successors or Assigns; AND THE SAID messuage or tenement, messuages or tenements, erections, buildings and premises, so being well and sufficiently repaired, sustained and amended, at the end, or sooner determination, of the said term, shall and will peaceably and quietly deliver up to Her said Majesty, Her Heirs, Successors or Assigns; AND ALSO that it shall be lawful for Her said Majesty, Her Heirs, Successors or Assigns, or Her and their Agent, or any person or persons deputed by him or  them, to enter into and upon the premises hereby demised, at any reasonable hours in the day time, within the last seven years of the aforesaid term of nine hundred and ninety nine years, to take a Schedule or Inventory of all and every the fixtures and things to be yielded up at the expiration thereof, asaforesaid. "

5. It can readily be seen that the lease contains a building covenant including a rate and range clause, a repairing covenant and a covenant to deliver up in good repair at the expiration of the term. For the sake of completion, and because it was the subject of passing reference during the course of argument, I should add that there is a further covenant that the lessee, his executors, administrators and assigns etc. shall not "during the continuance of the demise use, exercise or follow in or upon the said premises or any part thereof" certain specified trades or businesses or any other noisy, noisome or offensive trade or business whatever" without the previous licence of the Crown. The lease also includes, among others, a covenant to pay rent, but I do not think that it is necessary to set these out.

6. In 1957 a Mr. Kwan, who was a successor in title to Mr. Munro to that portion of the original lot which forms the subject of these proceedings, sought permission from the Crown to demolish the then existing residence on the site, and to erect a residence big enough to accommodate his large family.

7. Permission was granted to develop the site in accordance with plans submitted by Mr. Kwan's architect and the building was duly erected. An inspection by an officer of the Crown lends and Surveys Office revealed, however, that without the prior submission of plans to the Building Authority the building had been altered by dividing it into five flats.

8. After some negotiations between the Crown and Mr. Kwan the latter agreed to pay a premium of $63,000 in return for a variation of the lease conditions.  The formal letter of modification of the terms of the Crown Lease states.

1.        I refer to the previous correspondence between you and the Director of Public Works, and have to inform you that Government has approved the modification of the Crown Lease terms so as to allow the maintenance of 5 flats subject to the following conditions:

2.         Except as thus modified all the terms and covenants contained in the Crown Lease shall remain in full force and effect.

3.        Upon confirmation that your client is desirous of proceeding on this basis, a demand note for additional premium will be forwarded to you for settlement forthwith.

4.        On payment of the additional premium, an appropriate endorsement, giving effect to the modification, will be made on the Counterpart Crown Lease retained in the Land Office, whereupon it is suggested that this letter be attached to the title deeds in your client's possession, for record purposes.

9. This letter dated 24th December 1957 was in fact registered in the Lands Office under Memorial No. 283199 on 6th October 1958.

10. Subsequently Mr. Kwan assigned the land by way of mortgage to a finance company in order to secure loan. However, he defaulted under the mortgage and, in January 1985, the finance company, in exercise of its power of sale, assigned the property to the plaintiff for $9.5 million "for the residue of the term of years created by the Crown Lease subject to the payment of the yearly Crown rent reserved by and the covenants conditions and provisoes contained in the Crown Lease.

11. There is evidence on affidavit on behalf of the Crown, unchallenged by any evidence from the plaintiff, that that sum reflected the value of the lot restricted to a 3 storey residential development containing 5 flats with the building having a site coverage of 66% and that, had there been no such effective restrictions, the value would have been in excess of $30 million. It is not disputed that the plaintiff purchased the property with full knowledge of the terms of the Crown Lease and the 1957 letter of modification.

12. Two other matters are not in dispute. First, the lessee of another site that had formed part of the original area of land had, on payment of a premium, been granted permission by the Crown to erect high rise block of flats. Secondly, in 1979 a wholly owned subsidiary of the plaintiff applied for permission to erect a 20 storey block of flats on yet another site that had formed part of the original piece of land but the application was rejected by the Crown. However, after the company had issued a writ seeking various declarations, the action was settled and, without demanding payment of r premium, the Crown withdrew its objections to the proposed development on condition, inter alia, that, subject to certain matters, the development would proceed in accordance with building plans that had earlier been approved by the Building Authority and that the agreement by the Crown to settle the action was not to be deemed to constitute a waiver of any term in the Crown Lease for Inland Lot No. 648.

13. It seems not unreasonable to conclude that, buoyed by this success on the part of its subsidiary company, the plaintiff purchased the present lot in the hope of erecting a multi-storey block of flats without opposition from the Crown or the necessity of paying a premium.

14. I have not been informed of the reason for the Crown having withdrawn its objection to the development of the other site by the subsidiary company. It is quite possible that entirely different considerations applied in that case from those in the present one. Moreover, I am mindful of the express term that the settlement of the action was not to be deemed to be a waiver of any term in the Crown Lease. I should add that, as one would expect, copies of the correspondence between the legal representatives of the subsidiary company and those of the Crown, including the terms of settlement, were in the hands of the plaintiff at the time it purchased the present lot.

15. In April 1985, the plaintiff submitted to the Building Authority plans for re-development of the lot and was advised in a reply dated 1st May 1985 that the proposed development would contravene the conditions of the Crown Lease as amended by the 1957 letter of modification, and that it would therefore be necessary for the plaintiff to obtain a further modification of the lease.

16. Shortly afterwards, on 22nd May, the Building authority gave written consent to the plaintiff to demolish the 3 storey block of 5 flats on the lot. It is important in this connexion to appreciate that such permission was not given by the Director of Building Development (the relevant authority at that time) as land agent to the Crown but as the Building Authority under the Buildings Ordinance (Cap.123). That there is a distinction between the two capacities, in which the Director acts, was made clear by the Privy Council in Hang Wah Chong Investment Co. Ltd. v. A.G.⁽¹⁾ where their Lordships held, first, that the Director's (the relevant authority at that time being the Director of Lands) representatives included both those of building authority and those of land agent to the Crown, secondly, that the Crown was entitled to charge a premium for agreeing to any modifications of the conditions of Crown Lease and, finally, that the Director did not abuse his position by acting as land agent when he made his approval of re-development plans conditional on the payment of a premium to obtain the Crown's consent to the modification of the conditions.

17. In that case, the Director had advised the lessees that the Crown would agree to the requested modifications on the payment of a specified premium. Although the lessees failed to pay the premium, they submitted plans for the proposed re-development to the Director as building authority for his approval and approval was granted.

18. The relevant portion of section 14(2) of the Buildings Ordinance which was of application both in that case and the present proceedings, provides :

". . . neither the approval of any plans nor the consent to the commencement of any building works or street works shall be deemed . . . to act as a waiver of any term in any lease or licence. "

19. In the present case, the Director as Building Authority informed the plaintiff by a letter dated 23rd September 1985 that approval had been given to the proposed redevelopment, but that it "shall not be deemed to confer any title to land or to act as a waiver of any term in any lease or licence.

20. The plaintiff, however, contended that the building covenant in the Crown Lease was spent and that, as there was no other restrictive covenant on the lease on development, no modification was necessary,

21. In reply, the District Lends Officer stated that it was Government's view that the 1957 letter of modification restricted development on the land to, inter alia, a block of five flats not exceeding three storeys. He reiterated that, if the plaintiff wished to proceed with the proposed development, he should apply for a modification of the lease. Further correspondence was exchanged between the parties but to no effect. Finally, the plaintiff commenced the present proceedings by way of originating summons.

22. Mr. Chang, leading counsel for the plaintiff, while conceding, as he must, that it is entirely proper to have regard to the entire Crown Lease in interpreting the building covenant, submitted that the wording of the covenant permits of no reasonable interpretation other than that the original lessee was obliged to do no more than erect one or more villa residences only within the first year of the term of the lease. In his submission, this means that the lessee would have complied with the covenant if, within that year, he erected at least one villa residence on the land, and no other type of building. At the expiration of the year, the covenant, if complied with, is fulfilled and thus spent of effect and that, although the lessee would still be bound by the terms of the repairing covenant to keep in good repair the villa residence or villa residences, he could thereafter erect buildings other than villa residences on the land.

23. In other words, although the terms of the building covenant required the lessee to restrict himself to the erection of a villa residence or villa residences on the land and, indeed, cast upon him the positive obligation to erect one villa residence within the first year, it permitted him thereafter to erect other types of buildings.

24. Mr. Swaine for the Crown contended that his interpretation produces an absurd result and violates the clear and manifest intention reflected by the words of the covenant that the lessee and his successors in title be restricted to erecting villa residences only on the land for the entire term of the lease. In his submission, it defies commonsense that there should be an obligation on the lessee to erect one or more villa residences only during the first year of a 999 year lease and yet he be granted carte blanche to erect other types of buildings thereafter.

25. Mr. Chang sought to counter this argument by claiming that his interpretation does no violence to the building covenant and that the Crown may well have taken the view at the time of the execution of the lease that, since the lessee was obliged to erect one or more villa residences during the first year and was bound by other covenants to maintain them in good repair and to yield them up in that condition at the termination of the lease, it was therefore not in the least likely that he would erect any other type of building on the land after the first year.

26. Mr. Chang's main submission in this connexion, however, is that, if the wording of the building covenant is clear and unambiguous, the Court must give effect to it as it stands without reading words into it and thereby making a contract for the parties.

27. It is not in dispute that the building covenant contains both a positive and a negative element.  Mr. Chang argued that the positive element is the requirement to erect one or more villa residences within the year, and that the negative element is that no other type of building may be erected during that time.

28. Mr. Swaine agrees with Mr. Chang's view of the positive element but contended that the negative element forbids the erection of buildings other than villa residences at any time during the term of the lease. He laid great emphasis on the use of the word "only" after the words "one or more villa residences" in the building covenant.

29. Mr. Chang further contended that the entire building covenant including the rate and range clause is governed by the introductory words "will, before the expiration of the first year of the term". Thus it is not permissible, on his argument, to read the covenant to erect "one or more villa residences only" as if it existed without those introductory words limiting its life to one year.

30. An examination of the building covenant reveals that the draftsman first refers in general terms to the buildings that are to be erected in the first year as "one or more ... messuages or tenements" and then proceeds to particularise them as "one or more villa residences". Thus the "one or more villa residences" are the "messuages or tenements".

31. Moreover, the building covenant imposes an obligation on the lessee to erect with the messuages or tenements "proper fences, walls, sewers, drains and all other usual or necessary appurtenances".

32. This is relevant because, by way of a subsidiary argument, Mr. Chang sought to draw support for his contention from the words in the repairing covenant "erections and buildings" following the words "the said messuage or tenement". He submits that, because these words "erections and buildings" appear for the first time in the Crown Lease in the repairing covenant, it is arguable that their insertion implies that buildings other than villa residences may be erected after the first year and that the repairing covenant would apply equally to them.

33. I do not agree. In my view, the words "erections and buildings" refers to "proper fences, walls, sewers, drains and all other usual or necessary appurtenances". In Jowitts Dictionary of English Law 2nd edition, "appurtenances" is defined as "things belonging to another thing, as hamlets to a manor, and common of pasture, turbary, etc.; liberties and services, outhouses, yards, orchards and gardens are appurtenant to a messuage”. (emphasis supplied)

34. Although the Crown Lease was not drafted with the same degree of precision that one expects to find in a modern day statute, I am satisfied that the words "erections and buildings" refer to any erections and buildings such as outhouses that are the "other usual or necessary appurtenances" to the messuage or tenement.

35. I also observe that the words "the said" which precede "messuage or tenement" in the repairing covenant also qualify the words "erections and buildings".  If the words "erections and buildings do not refer to "all other usual or necessary appurtenances" but were intended to extend the repairing covenant beyond villa residences so as to include buildings of a different kind that might be erected after the first year of the term, it seems to me that the relevant passage would have been drafted to read "the said messuage or tenement and any other erections and buildings on the said place of ground ... " (my emphasis)

36. On the other hand, Mr. Chang cited Smith v. Mills⁽²⁾ and Cornish v. Cleife⁽³⁾ as being cases which militate against any suggestion that, if the repairing covenant only applies to villa residences built in the first year, it would be unreasonable to construe the lease to allow the erection of other buildings thereafter. He contends that it is significant that the fact that a repairing covenant was held to apply only to the houses covenanted to be built, as in the case of Smith v. Mills⁽²⁾ , or to existing houses in Cornish v. Cleife⁽³⁾, and not to additional buildings erected subsequently, did not cause the court in either case to imply any restriction on the erection of additional houses.

37. I do not doubt the accuracy of the proposition stated by Bramwell B. and Channell B. in Cornish v. Cleife⁽³⁾ that where there is a general covenant to repair, and keep and leave in repair, the inference is that the lessee undertakes to repair newly erected buildings, but that where the covenant is to repair and leave in repair the demised buildings, no such liability arises. However, since I do not consider it necessary to pray in aid the repairing covenant to construe the building covenant, I do not find these cases to be of any assistance.

38. Mr. Chang sought to gain support from the words of Jenkins L.J. in Esdaile v. Lewis⁽⁴⁾

"The reasoning underlying the decision in Cook v. Shoesmith [1951] 1 K.B. 752 was of this nature. It is a well-established principle, treated as such by Lord Eldon in Church v. Brown 15 Ves. 253, that a covenant not to sublet premises is not broken by the subletting of part only of the premises. It follows that wherever there is a stipulation in a tenancy agreement against subletting, or a covenant not to sublet, then if, upon its true construction, that stipulation or covenant prohibits the subletting of the premises it is not broken by the subletting of part only of the premises. I think it is right to add that it behoves a landlord who is seeking to cut down the rights prima facie conferred on his tenant by the letting to express in clear words the extent to which those rights are intended to be cut down. Under a tenancy agreement containing no stipulations regarding subletting the tenant is entitled to sublet in right of his proprietary  interest. If that right is to be denied him then the provision by which it is denied should be clearly expressed. "

39. The principle that Mr. Chang extracts from this case is that where a landlord seeks to cut down the rights prima facie conferred on his tenant by the letting, he must express in clear words the extent to which those rights are intended to be cut down.

40. But this was a case concerned with subletting and it is clear that the majority of the court was focusing its attention on a line of authority relating to covenants against subletting.

41. I see no warrant for regarding this case other than in that context.

42. Mr. Chang also relied upon the words of Lord Denman C.J. in Asndin v. Austin⁽⁵⁾ -

"We have examined these and several earlier cases which were cited in the argument in the latter case: and, upon consideration, they do not appear to us to support the proposition for which the plaintiff contends to the extent to which it is necessary for him to carry it. It will be found in those cases that, where words of recital or reference manifested a clear intention that the parties should do certain acts, the Courts have from these inferred a covenant to do such acts, and sustained actions of covenant for the nonperformance, as if the instruments had contained express covenants to perform them. But it is a manifest extension of that principle to hold that, where parties have expressly covenanted to perform certain acts, they must be held to have impliedly covenanted for every act convenient or even necessary for [684] the perfect performance of their express covenants. Where parties have entered into written engagements with expressed stipulations, it is manifestly not desirable to extend them by any implications: the presumption is that, having expressed some, they have expressed all the conditions by which they intend to be bound under that instrument. It is possible that each party to the present instrument may have contracted on the supposition that the business would in fact be carried on, and the service in fact continued, during the three years, and yet neither party might have been willing to bind themselves to that effect: and it is one thing for the Court to effectuate the intention of the parties to the extent to which they may have, even imperfectly, expressed themselves, and another to add to the instrument all such covenants as upon a full consideration the Court may deem fitting for completing the intentions of the parties, but which they, either purposely or unintentionally, have omitted. The former is but the application of a rule of construction to that which is written; the latter adds to the  obligations by which the parties have bound themselves, and is of course quite unauthorized, as well as liable to great practical injustice in the application. "

and on the following passage in the short judgment of James L.J. in Kemp v. Bird⁽⁶⁾ -

"I am of opinion that the judgment of the learned Judge in this case cannot be disturbed. Persons ought to look after their own interests in framing their own contracts and their own covenants. Persons who are men of business, as they were here, are able to get protection and advice, and they must make their covenants express, so as to state what they really mean, and they cannot get a Court of Law or of Equity to supply something which they have not stipulated for in order to get a benefit which is supposed to have been intended. Here the words are very plain, and the covenant is intelligible and reasonable as it stands (as Mr. Justice Fry has observed), whatever may be the extent or effect of it. It is, 'That the said G. Bird shall not, during the said term, demise or let any or either of the messuages or tenements now forming the said street called London Street, Paddington, between Arthur Mews and Francis Mews, to any person whomsoever for the purpose of carrying on the trade or business of an eating-house,' &c. He may not demise it or let it for that purpose. I assume that if he demised it or let it generally, so as to allow the tenant to do as he liked, that would introduce a different question; but that was not the case here. If it had been intended that there should have been a positive restriction on the use of the premises during the term, there is a well-known form which the parties might have used, and which would have been binding on the owner, and on his representatives, and on the assignee - that is, 'That the said G. Bird, his heirs, executors, administrators, and assigns, shall not, during the said term, demise or let, or permit any of the said messuages or tenements to be demised or let,' and so on. It is quite clear that Bird did not intend to enter into such a covenant. By what right are we to extend this covenant beyond the words in which it is expressed - that is, that he shall not demise or let? He has not demised or let. It is said that he has undertaken some trusteeship. There is no trusteeship between landlord and tenant that I am aware of, any more than there is between tenant and landlord. I cannot find anything here that makes Bird a trustee at the will and pleasure of Kemp to enforce anything against Godfrey. Bird has certainly not, in my opinion, violated his covenant; nor has he come under any obligation to Kemp to allow his name to be used. "

43. In my view, neither of these cases provides any assistance to the plaintiff. Interpreting the building covenant to mean that no messuages or tenements other than villa residences may be erected on the land during the term of the lease does not, to my mind, necessitate implying the existence of any unexpressed obligation on the lessee. I am satisfied from the wording of the covenant itself that it is plain that the lessee is permitted to erect one or more villa residences only and that at least one of these residences must be erected within the first year. Moreover, the provision in the lease specifying "the erection of one or more villa residences only" is handwritten. It would be difficult to maintain that it does not override any pro forma provision in the Crown Lease upon which reliance might be placed to support a contrary construction.

44. The 1957 letter of modification simply permitted the lessee to maintain on the site a three storey block of five flats with a roofed over area not exceeding 66% of the lot area. The word "maintain" was used because the block had already been erected at the time the formal modification was approved. The letter did make it clear, however, that, except as thus modified, "all the terms and covenants contained in the Crown Lease shall remain in full force and effect". I am unable to find anything in the letter that would assist the plaintiff.

45. Mr. Chang further submitted that even if the interpretation of the Crown Lease for which he contends is incorrect the Crown cannot enforce that part of the covenant restricting development to the erection of villa residences only without enforcing the rate and range provision. As the erection of high rise apartment buildings in the immediate vicinity has completely altered the character of the neighbourhood it is no longer possible to erect villa residences that would rate and range with other messuages in the same street. The only buildings that could truly be said to rate and range with others in the same locality are high rise buildings. The whole covenant has therefore become impossible to perform.

46. It is apparent that this argument rests on the premise that as the restriction as to the building of villa residences only and the rate and range provision are both part of the same covenant they must stand on full together.

47. I do not accept this bald proposition for which Counsel concedes he has been unable to find any authority. If it has now become impossible to erect villa residences that rate and range with messuages or tenements in the same street, I am unable to see any reason why this should render ineffective that part of the covenant that stipulates that villa residences only may be erected on the site. This restriction is able to stand perfectly well on its own without the support of the rate and range provision. The effect of the change in the nature of the neighbourhood is simply to relieve the lessee from compliance with the rate and range provision. The restriction as to villa residences only still applies.

48. Moreover, in my view, the mere fact that the Crown may have permitted other lessees or their successors in title, either with or without the payment of a premium, to depart from strict observance of the terms of the building covenants relating to other sites, does not affect the right of the Crown to insist on compliance with the restrictive covenant on the present site or to demand the payment of a premium in return for its relaxation.

49. Indeed, Mr. Chang accepts that the fact that the Crown allowed redevelopment of a site which was part of the original lot and subject to the provisions of the same Crown Lease does not amount to a waiver by the Crown of its rights in respect of other parts of the whole lot. He merely points out that by its own action the Crown has assisted in the change in the nature of the neighbourhood and that by so doing has represented to the public in general and other lessees in particular that it is content to permit other land in the vicinity to be redeveloped in a similar manner. I fail to see how this confers any rights on those other lessees or operates as an estoppel against the Crown.

50. The plaintiff has not established the existence of a building scheme in pursuance of which the covenant was entered into with the object of securing the common advantage of a number of purchasers, or of protecting the property of the covenantee (Osborne v. Bradley⁽⁷⁾).

51. Indeed, the notion of a building scheme runs counter to the very construction for which the plaintiff primarily contends. If it had been intended to establish such a scheme it seems most unlikely that it would also have been intended that the building covenant be spent after the first year and that thereafter the lessee be permitted to erect buildings other than villa residences on the land.

52. Since I am of the opinion that the Crown does not need to resort to the 1957 letter of modification to enforce its rights under the Crown Lease, I do not propose to embark on an analysis of the submissions and cases relevant to the situation that would have arisen had the Crown been forced to rely on it. For the same reason, it is not necessary to deal with the arguments that centre on the right or otherwise of the Crown to re-enter for a possible breach by the plaintiff of the repairing covenant by demolishing the three storey block of 5 flats.

53. Numerous arguments and cases were addressed and cited to me during the course of the hearing. Many of these related to negativing actual or potential arguments advanced by the other side on matters that, although relevant, were somewhat remote from the central issue to be decided. I trust that by not referring to these I do not do any disservice to the parties.

54. The final argument advanced by Mr. Chang and developed by his junior counsel, Mrs. Clough, was frankly conceded by her to be very much a long stop submission and, indeed, a bold one.

55. Putting it in simple and stark terms, this argument is that a block of flats may nevertheless be a villa residence. Counsel referred to the definition of "villa" in the Shorter Oxford Dictionary and emphasised the later and more general usage of the word -

"1. Orig., a country mansion or residence, together with alarm, farm buildings, or other houses attached, built or occupied by a person of some position and wealth; a country seat or estate; in later and more general use, a residence in the country, or in the neighbourhood o?ê a town, usually of some size and architectural elegance and standing in its own grounds.

a.    ...

b.    ...

c.    ...

56. I was referred to Kirmber v. Adnans⁽⁸⁾, a case in which the word "house" in a covenant not to erect more than a certain number of houses was the subject of interpretation by the court. There the court concluded that since there was nothing in the context which cut down or altered the popular meaning of the word "house", a building of two floors containing several residential flats constituted only one house.

57. Lindley M. R. observed in his judgment that the word "house" in the particular covenant under consideration applied not to the interior portions of the building but to the whole building. Vaughan Williams L. J., in construing the object of the covenant in the context of building estates in London, found no difficulty in concluding that the word "house" meant the physical erection and not the interior arrangement.

58. There seems to me to be a world of difference between the facts of that case and the construction of that particular covenant on the one hand, and saying, on the other, that a block of flats of 23 storeys is a villa residence. Certainly the flats in such a high rise building are residences but, in my view, by no stretch of the imagination can they be said, either singly or collectively, to fall within the meaning of the word "villa".

59. Finally, it is contended that, in Hong Kong, it is not uncommon to find that large blocks of flats bear names such as "Evergreen Villa" and "Rose Villa". That may be so, but the arbitrary   decision to endow those buildings with such appealing names no more makes them villas than the name "Evergreen Gardens", if given to a block of flats, would make it a garden.

60. For these reasons, therefore, I decline to grant the declarations that the plaintiff seeks.

(1) [1981] 1WLR 1141

(2) (1899) 16 TLR 59

(3) 3 H.C. 446

(4) [1956] 1 WLR 709

(5) (1844) 5 Q.B. 671 at 683; 114 E.R. 1402 at 1407

(6) (1877) 5 Ch.D 974 at 976

(7) [1903] 2 Ch. 446

(8) [1900] 1 Ch 412

Representation:

Mr. Denis Chang, Q.C. & Mrs. Margaret Clough instructed by Woo, Kwan, Lee & Lo for Plaintiff.

Mr. John Swaine, Q.C. & Mr. S. H. Franklin, c.c., for Crown Solicitors/ Defendant.