Chan Tin Yau and Others v. Tsang Kwok Kay

CACV 72/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 72 OF 2007

(ON APPEAL FROM HCA 21228 OF 1998)

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BETWEEN:

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Before: Hon. Tang V-P, Yuen JA and A. Cheung J in Court

Dates of hearing: 13-14 December 2007

Date of Judgment: 6 June 2008

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JUDGMENT

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Hon Tang V-P:

1.I agree with Yuen JA’s judgment.

2.On lost modern grant, I wish only to add that I agree with paras 93-116 of the judgment of Reyes J in Kong Sau Ching v Kong Pak Yan [2004] 1 HKC 119.

Hon Yuen JA:

3.This is an appeal from a judgment of Chung J in respect of a dispute over a right of way in a village in Pat Heung, Yuen Long.

Background

4.The Defendant is the registered owner of Lot No. 1363 Remaining Portion which is in Shui Tsan Tin Tsuen (“the Village”).  Kam Sheung Road, a trunk road, lies to the north of the Village.  The Village is connected to Kam Sheung Road by a road called “the Main Road”.     

5.The Plaintiffs are villagers who live at the “bottom” (i.e. the southern part) of the Village.  They  can only gain vehicular access to the Main Road if they travel over a road situated within the Defendant’s land (“the Disputed Road”).

6.The Disputed Road was built in the 1970's and it has been used continuously by villagers who live at the bottom of the village.

7.In 1998  the present litigation commenced after a dispute between the Defendant and the villagers who live at the bottom of the village as to the use of the Disputed Road.

Plaintiffs’ case

8.The Plaintiffs’ case as to how they came to use the Disputed Road was that Tsang Lam Chiu (who was then living in Australia) was originally the owner of land on which both the Main Road and the Disputed Road are now situated.  In 1972-3, the villagers wrote a letter to Tsang Lam Chiu asking him to donate land for the Main and Disputed Road, and they claimed that in a letter in reply Tsang Lam Chiu agreed to do so.  This letter is now missing.

9.Donations were then raised from the villagers for the construction of the Main Road.  As for the Disputed Road, the Plaintiffs claimed that the villagers who lived at the bottom of the village got together to build it themselves.  The Plaintiffs claimed that by 1973, both the Main Road and the Disputed Road were completed.  Since then they have used both the Main Road and the Disputed Road, and they have been maintaining the Disputed Road. 

Defendant’s case

10.The Defendant’s version was that Tsang Lam Chiu had not donated the land on which the Disputed Road was built.  In 1972-3 the Defendant’s father was the lessee of the land within which the Disputed Road is now situated, and the villagers at the bottom of the Village were only able to use a 3-ft footpath to access their part of the Village. The Defendant alleged that it was only in 1974 that his father built the Disputed Road to enable access to his home and to park his car.  There were apparently a number of variations in the Defendant’s case about Tsang Lam Chiu’s letter, but the eventual version was that although such a letter did exist, it referred only to donating land for the Main Road, and that although the Defendant’s father originally had possession of the letter, he later gave it to the village representative Cheung Ching Kiu and it was subsequently lost. 

Chung J’s judgment

11.After a 13-day trial during which many witnesses (including the Defendant’s father and Cheung Ching Kiu) testified, the judge held in favour of the Plaintiffs.  Although the judge did not accept the evidence of the Plaintiffs’ witnesses in their entirety, more importantly the judge found that the Defendant’s father and Cheung Ching Kiu (who claimed to have read the letter) were not credible witnesses.

12.The judge held that Tsang Lam Chiu had indeed donated land for both the Main Road and the Disputed Road, and he did not accept the version given by the Defendant’s father as to what had happened to the letter.  The judge held that the Plaintiffs were entitled to use the Disputed Road on two legal bases: first, that Tsang Lam Chiu’s letter amounted to a written dedication of the Disputed Road for use as a public road, and secondly, that the villagers at the bottom of the Village had acquired a right of way over the Disputed Road by prescription by way of lost modern grant. 

13.The judge also decided in a separate Decision given on 9 February 2007 that the Plaintiffs were entitled to repair, maintain and cover the nullah that runs underneath the Disputed Road and the pipes and drains related to the nullah.

Appeal

14.On appeal counsel for the Defendant has sought to question some of the judge’s findings of fact but it is well-established that an appellate court should not interfere in a trial judge’s assessment of the weight of evidence, especially on the credibility of witnesses who gave live evidence before him.  In the present case Chung J had the opportunity of assessing the credibility of the Defendant’s father and he expressly found that he was not a credible witness: paras. 29 and 64 Judgment.  The judge was entitled to do so, especially in light of the changes in his case about Tsang Lam Chiu’s letter.  The judge also expressly held that Cheung Ching-Kiu was not a credible witness: para.69 Judgment. 

15.It is also clear that the aerial photographs produced at the trial supported the Plaintiffs’ case.  We have also examined the aerial photograph taken in 1973 and we agree with the judge’s finding that the width of the Main Road and that of the Disputed Road was already similar by then: para. 50 Judgment. 

16.Accordingly there was sufficient evidence to justify the judge’s findings of fact that the Disputed Road was not built by the Defendant’s father in 1974 (as the Defendant alleged)  but simultaneously with or shortly after the Main Road in 1972-3 in circumstances asserted by the Plaintiffs.  The next issue is whether he was correct in his decision on the law.

Dedication

17.With respect I have difficulty with the judge’s finding that Tsang Lam Chiu had by his letter made a written dedication of the Disputed Road for use as a public road.   Although counsel for the Defendant did not take the point, there was no evidence that the Government as reversioner had given consent for the dedication.  We have been referred to Kong Sau Ching v Kong Pak Yan [2004] 1 HKC 119 where Reyes J held that Government’s consent to the public dedication of the disputed land in that case could be inferred from the evidence.  However there was no such evidence in the present case, as I do not think the presence of water pipes laid by the Water Supplies Department could be inferred as the giving of consent by Government qua reversioner.

Lost modern grant

18.That leaves the finding of use by prescription by way of the common law of lost modern grant.  The first issue is whether the law of prescription applied in Hong Kong.  There have been a number of judgments in which this issue has been discussed.   In Chung Yeung Hung v Law Man Nga & Anor [1997] HKLRD 1022 this court (Mortimer and Godfrey JJA, Keith J) heard an appeal in an application for an interlocutory injunction which the first instance judge had refused on the ground that under English law, an easement could be acquired by prescription only for the benefit of land held in fee simple.  The first instance judge’s decision was consistent with the judgment of Deputy Judge Jerome Chan in Tang Tim Fat & Anor v Chan Fok Kei & others [1993] 2 HKLR 373 and that of the Full Court (Sir Gerard Howe CJ and Reece J) in Foo Kam Shing v The Local Printing Press Limited [1952] HKLR 192.

19.On appeal in Chung this court considered the English position and the criticism of it as being “irrational”: Megarry and Wade, The Law of Real Property, 5^th ed p.873.  It considered the Irish position where prescription against limited owners was allowed.  For instance in Flynn v Harte [1913] 2 IR 322 it was held that a tenant could acquire a right of way over the land of another tenant held by the same landlord.  The court noted that since there was only one piece of land held in Hong Kong by way of fee simple, no purpose would have been served by applying the Prescription Act and the common law of lost modern grant in the way they were applied in England.  Accordingly when the Application of English Law Ordinance Cap. 88 provided that the law of England as set out in the Prescription Act 1832 shall be enforced in Hong Kong “subject to such modifications thereto as the circumstances of Hong Kong may require”, it was at least arguable that the restriction under English law that an easement by prescription applied only to land held in fee simple did not apply to Hong Kong.

20.In so holding, the court acknowledged that the Full Court in Foo was of a different opinion.  Godfrey JA (with whose judgment Keith J agreed) sought to explain the decision in Foo on the basis that the Application of English Law Ordinance was not then in force: p.1025 G-H.  (At the time of the decision in Foo, there was only a general application of English law under s.5 Supreme Court Ordinance, but the Prescription Act 1832 was not specifically included as it was in the Application of English Law Ordinance).  Mortimer JA agreed and expressly added that in any event the decision in Foo was not binding: p.1028 J. 

21.I respectfully agree with the reasoning of this court in Chung.  There would have been no point expressly including the Prescription Act in the list of statutes to be applied to Hong Kong if the circumstances did not permit it to apply (as there was - and is - only one piece of land held in fee simple in Hong Kong, there would have been no possible circumstances for the law to be used).  It follows that the law of prescription applied to leasehold land in Hong Kong.

22.Did the common law of lost modern grant apply to the facts of the present case as found by the trial judge?  It is true that on the Plaintiffs’ own case, there was only a letter (not a deed) from Tsang Lam Chiu.  In Regina (Beresford) v Sunderland City Council [2004] 1 AC 889 (a case which was not referred to the trial judge) Lord Scott discussed how the problem of the lack of a deed could be resolved.  He held that a person who had expended money or otherwise acted to his detriment after having been led to believe that he is entitled on a permanent basis to enjoy a right capable of constituting an easement may become entitled in equity to the easement by proprietary estoppel.  Twenty years enjoyment of the equitable right would enable the beneficiary of the permission to claim a legal easement under the Prescription Act:  para. 37.  In the present case, the villagers at the bottom of the Village including the Plaintiffs or their predecessors in title had acted to their detriment by building the Disputed Road in 1973 on the representation set out in Tsang Lam Chiu’s letter.  Although the trial judge rejected a case founded on proprietary estoppel alone: para 90-91, that was in the context of a claim of estoppel by reason of the Defendant’s acquiescence:  para. 3(f) Judgment.  The period of 20 years enjoyment after the Disputed Road was built in 1973 gave the Plaintiffs an accrued right by 1993. 

23.Although Chung J considered that he could not find a prescriptive right under the Prescription Act, the legal result of a prescriptive right of way could be achieved through the alternative common law route of a lost modern grant.  In Chung Mortimer JA emphasized that where a right of way is acquired by prescription, the grant is presumed and not implied.  Therefore, under the legal fiction of lost modern grant, “even if it is demonstrated that there was no grant or there could have been no grant, the grant is conclusively proved unless ... it is impossible in law”: p.1029H-I. 

24.Accordingly even though the facts demonstrated that there was no express or implied grant because Tsang Lam Chiu had only written the villagers a letter and had not executed a deed, the fact that the villagers had acted to their detriment in building the Disputed Road entitled them in equity to the easement by proprietary estoppel, and so the presumed grant was not impossible in law.  I am therefore satisfied that a legal basis exists for the Plaintiffs’ acquisition of a right of way over the Disputed Road.

Nullah

25.Finally, I deal with the nullah which forms part of the Disputed Road (the pipes are attached to the banks, and drains flow underneath the Disputed Road, as shown in the photograph at p.197 of the Appeal Core Bundle).  In light of the judge’s findings as set out in his Decision dated 9 February 2007, it is clear that the Plaintiffs are entitled to the order he gave for its repair, maintenance and coverage.  The relief claimed regarding the nullah had been in the Statement of Claim right from the start of proceedings and there was no challenge in the Defendant’s witness statements to this aspect of the claim.  A concession was also mentioned in para. 19 of the judge’s Decision of 9 February 2007.  Given all these factors, I do not see anything in the Defendant’s complaint about the judge’s order regarding the nullah.  As for the judge’s costs order for the hearing concerning the nullah, it followed the order in the main judgment and is unobjectionable as an order made in the exercise of his discretion.

Order

26.I would therefore dismiss the appeal with an order nisi that the Defendant pay the Plaintiffs’ costs of the appeal.

Hon A Cheung J:

27.I also agree with the judgment of Yuen JA.

28.The Application of English Law Ordinance (Cap 88) was enacted in     1966.  It applied the Prescription Act 1832 to Hong Kong (subject to          local modifications). That provided the jurisprudential and logical     basis for the argument that in Hong Kong, prescriptive rights can be      acquired between limited owners – not only under the 1832 Act but      also at common law under the doctrine of prescription by lost           modern grant (leaving aside the common law doctrine of        prescription from time immemorial, which has little application in          Hong Kong). 

29.In the present case, the plaintiffs started their enjoyment of the Disputed Road in 1973.  For the reasons explained by Yuen JA in her judgment, their right, based on the common law doctrine of prescription by lost modern grant, therefore accrued in 1993 after 20 years continuous enjoyment.  The Application of English Law Ordinance was effectively repealed by non-adoption by the National People’s Congress Standing Committee in 1997.  Litigation to enforce the plaintiffs’ right was commenced in 1998.

30.In those circumstances, the repeal of the Application of English Law Ordinance in 1997 cannot possibly affect the plaintiffs’ right, which accrued well before 1997 under the law then applicable.  That the claim to enforce their right was only made in 1998 does not make any difference: article 120 of the Basic Law (“all rights in relation to [pre-1997 leases that extend beyond 1997] shall continue to be recognized and protected under the law of the [HKSAR]”).

31.On the facts, this case is not concerned with the suggested accrual of a prescriptive right at common law after the repeal of the Application of English Law Ordinance in 1997, when arguably the basis, or one of the bases, for arguing that prescriptive rights in Hong Kong can be acquired between limited owners at common law is no longer around.

32.Nor is this case concerned with the acquisition of a prescriptive right directly under the 1832 Act.  The consequences of the non-adoption of the Application of English Law Ordinance in 1997 can be complicated.  The possible factual permutations are many.  They do not require a decision in the instant case.

33.On many of these matters, see the detailed discussion by Reyes J in Kong Sau Ching v Kong Pak Yan [2004] 1 HKC 119, 139-152 (paras 67-116), and the more recent decision of Suffiad J in Victor Chandler (International) Ltd v Zhou Chu Jian He, HCA 2475/2006, 24 October 2007, a case on the Gaming Act 1710.

Mr Jat Sew Tong SC and Mr Victor Cheung instructed by Simon CW Yung & Co for the Plaintiffs (Respondents)

Mr Andy Hung instructed by Pansy Leung Tang & Chua for the Defendant (Appellant)