Read the full judgment text of FACV 17/2012 on BabelCite. This Court of Final Appeal judgment was delivered on 13 May 2013 before Chief Justice Ma, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Bokhary NPJ and Lord Hoffmann NPJ.
Land law – Government Leases – restrictive covenants – contractual construction – interpretation of 'house' – whether proposed 26-storey composite building straddling five subdivided Lots constitutes a 'house' under the restrictive covenants – whether the covenants permit erection of non-house buildings on each Lot. The plaintiff developer sought to redevelop five Lots at Nam Kok Road, Kowloon City (carved out of Mother Lot NKIL 3665) by building a 26-storey composite building straddling all five Lots; the Director of Lands rejected the plans on the ground that the proposed development breached restrictive covenants in the five individual Government Leases entered into in the 1960s prohibiting industrial use, factory buildings, and limiting construction to not more than one house on each Lot. Held, allowing the defendant's appeal: the word 'house' in the restrictive covenants must be construed in context, following Investors Compensation Scheme Ltd v West Bromwich Building Society and Jumbo King Ltd v Faithful Properties Ltd; the word has no free-standing meaning valid for all time (Wah Yick Enterprises Co. Ltd v Building Authority; Annicola Investments Ltd v Minister of Housing and Local Government) and must be construed in context (Annicola Investments). At the time the Government Leases were created, Chinese-type five-storey houses were already standing on each subdivided Lot, and the meaning of 'house' must have reference to those existing houses; the proposed 26-storey building is not such a house. Further, the restrictive covenants only permit the building of houses (and no more than one on each Lot) on each Lot, and no other type of building; the express prohibition on factory buildings emphasises the prohibition on industrial use and does not leave other building types unrestricted. The Court of Appeal erred in treating the Conditions of Exchange (which governed the undivided Mother Lots) as continuing to apply in the same way after the Lots were subdivided and the Government Leases were created. The question of straddling and the principle in Feather v The Queen did not require determination. Appeal unanimously allowed; order of Deputy Judge Pow SC restored; plaintiff to pay the defendant's costs of the appeal and the Court of Appeal, with costs of the action as ordered by the Deputy Judge; liberty to apply for different costs orders by written submissions within 14 days.
Legal issues: Meaning of 'house' in restrictive covenants in Government Leases · Scope of restriction in covenants – houses only, or any non-industrial non-factory building
Outcome: Appeal allowed; the Court of Final Appeal unanimously allowed the defendant's appeal and restored the order of the Court of First Instance (Deputy Judge Pow SC), holding that the proposed 26-storey composite building is not permitted under the Government Leases.
Cited by 10 cases