CHAN OI YUK v. LAM CHOI CHUN AND ANOTHER

[English Translation – 英譯本]

HCA 1029/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CIVIL ACTION NO 1029 OF 2013

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J U D G M E N T

Background

1.  The Plaintiff is the owner of the flat on the second floor, together with a rooftop, of a three-storey village house (“Village House A”) at section A of a Lot in Tai Po.  The 1^st Defendant and the 2^nd Defendant are the owners of the flats on the first and the ground floor of Village House A respectively. On 11 June 2013, the Plaintiff commenced this action against the defendants, seeking an order allowing her to reinstate or build inside the 2^nd Defendant’s flat on the ground floor a staircase leading to the second floor and the rooftop and also seeking related relief. On 2 October 2013, the 1^st Defendant and the Plaintiff reached an agreement and entered into a deed of settlement, the terms of which allowed the Plaintiff to build part of the indoor staircase on the first floor, with one third of the construction costs to be borne by the Plaintiff.  This trial is only against the 2^nd Defendant.

2.  The facts of this case are not subject to serious dispute.  The 2^nd Defendant’s main grounds of defence are based on the points of law she relies on, the principle of fairness, and the construction of the Deed of Mutual Covenant of Village House A (“DMC”).  Set out below are the background facts of this case as gathered from the Statement of Claim, the Defence, witness statements of both parties and documents of the then District Office and the present Lands Department.

3.  The Lot in question is divided into three sections, namely section A, section B and section RP, with one village house built in each section. The three houses, namely Village House A and the two other village houses (“Village House B” and “Village House C”, respectively), are of the same style and adjoining. The three houses fully covered the Lot.  Adjacent to it is either Crown/government land or private land owned by others.  Village House A is an end-bay house.

4.  On 27 January 1962, the Lands Department issued an occupation permit for Village House A.  At that time, Village House A was a two-storey house, with one flat on each floor.  Each floor was roughly 515 square feet.  An internal staircase leading from the ground floor to the first floor was built inside the house.  It is believed that Village House B and Village House C were also of the same design.

5.  On 30 September 1975, the then New Territories District Office relaxed the height restriction on the three village houses, allowing the owners to add a second floor to the three village houses.  Between 30 September 1975 and 3 July 1978 the then owner of Village House A removed the internal staircase leading from the ground floor to the first floor and constructed on the adjacent slope a concrete bridge leading to the first floor.  A covered external concrete staircase leading to the second floor was also erected in the adjoining open space.  Therefore, each floor of Village House A had its own ingress and egress, and the usable area of each floor was also enlarged.

6.  On 3 July 1978, the then owner Madam Wong sold the three floors of Village House A to three different buyers (“the 1978 Owners”) together as tenants in common.  On 12 July 1978, the 1978 Owners entered into a Deed of Mutual Covenant (“DMC”) which conferred on each of them the exclusive right to the use of a designated floor of Village House A and defined their obligations and rights in exercising their ownership.

7.  On 10 June 1988, the Plaintiff eventually purchased the flat on the second floor of Village House A.  The 2^nd Defendant eventually purchased the flat on the ground floor of Village House B on 31 December 1990, and then the flat on the ground floor of Village House A on 5 January 1995.

8.  Less than one month prior to the purchase of the flat on the ground floor of Village House A by the 2^nd Defendant, the adjacent owner had already commenced proceedings against the owners of the three village houses including the Plaintiff and the 1^st and 2^nd Defendants, requiring them to remove the concrete bridge and the external staircase (Civil Action No A12439/1994).  On 20 April 1995, by consent of the parties including the 2^nd Defendant, the then Supreme Court ordered that the bridge and the external staircase be removed.  However, it was not until June 2007 that those structures were finally removed.  Since then, the Plaintiff had not been able to enter her flat on the second floor, and her husband thus rented quarters provided by the employer as their family residence.  The 1^st Defendant, on the other hand, erected a spiral metal staircase on the government land in front of Village House A for access to and from her flat on the first floor.

9.  Subsequently, the Plaintiff discussed with the 1^st and 2^nd Defendants rebuilding an internal staircase leading from the ground floor to the first and second floors and the rooftop, but the Plaintiff’s suggestion was turned down by the Defendants.

10.  The Plaintiff had explored the possibility of building another external staircase.  But it could not be done because section A was fully covered by Village House A, leaving no space for an external staircase, and the adjacent owners would not allow the staircase to be built on their land.  More importantly, the Lands Department had repeatedly made it clear in writing that staircases among various floors of a small house had to be built inside the small house, and that no approval for building external staircases would be given.  The Plaintiff also explored the possibility of rebuilding Village House A jointly with the Defendants, but as there were issues such as the location of the septic tank, drainage and investigation of adjacent slopes and so on which could not be resolved, the plan had to be shelved in 2010.

11.  On 11 June 2013, the Plaintiff commenced the present proceedings.  On 2 October 2013, she reached a settlement agreement with the 1^st Defendant.  The 2^nd Defendant, on the other hand, proceeded with her defence.  Although I managed to assist both parties in reaching a consensus on various matters, no settlement was reached as the issue of costs could not be resolved.

The issues between the parties

12.  The Plaintiff’s claim is based on the principle of quasi-easement.  She claims that, by virtue of this principle, she enjoys a right of way to her flat on the second floor from the 2^nd Defendant’s flat on the ground floor and the 2^nd Defendant has to allow some place and space in her flat on the ground floor, of which she has exclusive possession, for the purpose of building or reinstating the internal staircase.

13.  The 2^nd Defendant puts forward the following grounds of defence:

(1)     When the second floor was added to Village House A, the then owner did not obtain consent in writing from the District Commissioner in respect of the addition plan in accordance with the additional conditions of New Grant No 8803.  Therefore, she did not enjoy the right to build an internal staircase;

(2)     When the DMC was entered into, there was no longer any internal staircase inside Village House A.  The terms of the DMC of the village house only concern the external staircase.  Therefore, the Plaintiff cannot rely on the terms of the DMC in seeking to have an internal staircase built;

(3)     The proposed internal staircase will occupy part of the space of which the 2^nd Defendant has exclusive possession, and the Plaintiff has not offered to pay her any compensation; and

(4)     None of the previous deeds of assignment of the village house mentioned that the indoor staircase was common space.  The indoor staircase will subject her to occupier’s liability which is unfair or unreasonable to her.

I will first determine whether the Plaintiff’s claim is meritorious.  If it is, I will proceed to consider the 2^nd Defendant’s grounds of defence.

Easement: legal principles

14.  The Plaintiff’s claim is based on quasi-easement.  As this legal principle is related to the legal principles on easement, I will first deal with the legal principles on easement briefly.

15.  Easement refers to the right of an owner of land to use adjoining land belonging to another owner for a specific purpose.  The land of the former is called “dominant tenement”, the land of the latter “servient tenement”.  Such right aims at enabling the owner of a dominant tenement to reasonably enjoy his land.  The right of the owner of a dominant tenement and the obligation of the owner of a servient tenement are, respectively, attached permanently to these two pieces of adjoining land, not to their owners.

16.  This right is generally created by the express or implied terms in the deed.  However, it can also be inferred from the common intention of the owner of the land and the grantee upon the grant of part of the owner’s land, the purpose for which that part of land was granted, and the need for the reasonable use of that part of land.  See Wheeldon v Burrows[1], Borman v Griffith[2] and Pwllbach Colliery Co Ltd v Woodman[3].  The right arising from the former case is a contractual easement and is a matter of construction of the contract.  The right arising from the latter case is one by inference, namely that the owner of the dominant tenement will not be able to enjoy his land if he cannot exercise such easement.  The majority of decided cases on easements pertain to the latter situation.

17.  In Wheeldon v Burrows, the owner of a tenement (grantor) granted part of that tenement to another person (grantee).  However, the rights he then enjoyed over that part from the rest of the tenement were not dealt with in the deed of grant.  Having regard to the purpose of the grant and the common intention and needs of the grantor and the grantee, the English Court of Appeal inferred that the reasonable and necessary rights exercised by the grantor habitually, continuously and apparently over that part of tenement prior to the grant were to be implied terms of the deed of grant which became easements. The inference was made mainly on the following basis: the rights were continuously and apparently exercised by the grantor at the time of the grant, and it was necessary to exercise those rights for the purpose of enabling the grantee to reasonably enjoy the part of tenement granted.  As a matter of law, an owner cannot have an easement over his own land. Therefore, the rights exercised by him prior to the severance and grant of the part of tenement are called “quasi-easements”.  These rights ripen into “easements” after the grant. The part of the tenement severed and granted to the grantee becomes the dominant tenement, and the rest of the tenement of the grantor becomes the servient tenement which is subject to obligations in respect of the easements enjoyed by the grantee.

18.  In Wheeldon v Burrows, Thesiger LJ laid down the following two legal principles on easement[4]:

“... two propositions may be stated as what I may call the general rules governing cases of this kind. The first of these rules is, that on the grant by the owner of a tenement of part of that tenement as it is then used and enjoyed, there will pass to the grantee all those continuous and apparent easements (by which, of course, I mean quasi easements), or, in other words, all those easements which are necessary to the reasonable enjoyment of the property granted, and which have been and are at the time of the grant used by the owners of the entirety for the benefit of the part granted. The second proposition is that, if the grantor intends to reserve any right over the tenement granted, it is his duty to reserve it expressly in the grant. Those are the general rules governing cases of this kind, but the second of those rules is subject to certain exceptions. One of those exceptions is the well-known exception which attaches to cases of what are called ways of necessity; and I do not dispute for a moment that there may be, and probably are, certain other exceptions, to which I shall refer before I close my observations upon this case.”

19.  The first principle is: upon the grant by the owner of a tenement (grantor) of part of that tenement as it is then used and enjoyed to another person (grantee), there will pass with that part of the tenement to the grantee the reasonable and necessary rights the grantor then exercises habitually, continuously and apparently over that part. The second principle is: if the grantor intends to reserve certain rights on the grant of part of the tenement (namely to relieve the obligations of the rest of the tenement in respect of that part), it is his duty to state the reservation clearly in the grant by means of an express term.  However, he cannot reserve any rights which are necessary to the enjoyment of that part of the tenement.

20.  In Barry v Hasseldine[5], the defendant sold to the plaintiff’s predecessor-in-title a parcel of land which was enclosed by the land retained by the defendant and by land owned by others.  At that time, access to and from that parcel of land was gained by way of a disused airfield abutting on a highway.  That passageway was subsequently closed.  The plaintiff applied to the court to have access to and from that parcel of land via the defendant’s land.  In granting his application, Danckwerts J had this to say[6]:

“... In my opinion, however, if the grantee has no access to the property which is sold and conveyed to him except over the grantor’s land or over the land of some other person or persons whom he cannot compel to give him any legal right of way, common sense demands that a way of necessity should be implied, so as to confer on the grantee a right of way, for the purposes for which the land is conveyed, over the land of the grantor; and it is no answer to say that a permissive method of approach was in fact enjoyed, at the time of the grant, over the land of some person other than the grantor because that permissive method of approach may be determined on the following day, thereby leaving the grantee with no lawful method of approaching the land which he has purchased.”

21.  In another case involving lease of land, Wong v Beaumont Property Trust Ltd[7], three cellars were let as a restaurant, and the lease agreement required the tenant to control the smells and odours emitting from the restaurant.  However, neither the landlord nor the tenant realised at the time that part of a proper ventilating duct had to pass through the landlord’s premises.  The tenant applied to the court for an order allowing him to enter the landlord’s premises for the purposes of constructing, repairing and maintaining the ventilating duct.  In granting the tenant’s application, Lord Denning MR had this to say[8]:

“The question is: Has the plaintiff a right to put up this duct without the landlords’ consent? If he is to have any right at all, it must be by way of easement and not merely by way of implied contract. He is not the original lessee, nor are the defendants the original lessors. Each is a successor in title. As between them, a right of this kind, if it exists at all, must be by way of an easement. In particular, an easement of necessity. ...... It was not realised by the parties, at the time of the lease, that this duct would be necessary. But it was in fact necessary from the very beginning. That seems to me sufficient to bring the principle into play. In order to use this place as a restaurant, there must be implied an easement, by the necessity of the case, to carry a duct up this wall.”

22.  The above are two obvious examples of easements by necessity.  If the owner of the dominant tenement cannot exercise such an easement, he will not be able to enjoy the land granted or leased to him by the owner of the servient tenement. 

Quasi-easement: legal principles

23.  As a matter of law, an owner cannot possibly enjoy an easement over his own land.  Therefore, an easement only exists over two pieces of adjoining land belonging to different owners and does not apply to adjoining land owned by the same person or a piece of land owned by various joint tenants or tenants in common: see Jumbo King Ltd v Faithful Properties Ltd[9]. Land on which a multi-storey building or a tiered village house is erected, is owned by different owners as tenants in common holding undivided shares, and parts of the land, flats or floors of which the respective owners have exclusive possession are governed by the deed of mutual covenant. For the above reasons, principles on easements do not apply to the parts of land of which owners of a multi-storey building or tiered village house have exclusive possession or the common parts shared by the owners.  Disputes concerning the exercise of rights by tenants in common over such land are mostly based on the principles on quasi-easements.

24.  In Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd[10], Li CJ explained the legal principles on quasi-easement[11].  He said that quasi-easement is used in two different senses.  The first refers to the rights exercised by co-owners of land over the common parts in accordance with the deed of mutual covenant.  Such rights are contractual quasi-easements which originate from the express or implied terms of the deed of mutual covenant.  The content and scope of these rights is a matter of construction of the contract. Notwithstanding the absence of a dominant and a servient tenement, the deed of mutual covenant contains terms, binding on all co-owners, which restrict their use of the land of which they have exclusive possession or the common parts which they share with other co-owners, analogous to an individual owner exercising his rights over the dominant tenement or discharging his obligations over the servient tenement.  Moreover, by virtue of the deed of mutual covenant, these terms are also binding on their successors-in-title, achieving the same effect as easements do.

25.  The second sense refers to the Wheeldon v Burrows sense, namely rights which have not yet ripened into easements prior to division of the land and become true easements only upon grant of a tenement.  Although each co-owner has, by virtue of the deed of mutual covenant, exclusive possession of a part of the land, these quasi-easements can never ripen into true easements because, as a matter of law, co-owners cannot possibly enjoy easements over co-owned land.  In Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd, the appellant put forward the proposition that a co-owner, having exclusive possession of a part of the land equivalent to a separate interest in land, enjoyed an easement.  However, this contention was rejected by the Court of Final Appeal[12].  Hence, the principles in Wheeldon v Burrows do not have the effect of turning such quasi-easements into true easements.

26.  Nevertheless, Li CJ also pointed out that where the right arises either on the subdivision and grant of land or on the subdivision and grant to a co-owner of exclusive possession (in accordance with undivided shares) of part of co-owned land, the principle in Wheeldon v Burrows can assist the court in drawing an inference on the construction of the deed of mutual covenant. According to this principle, the court may imply a common intention between the grantor and the grantee to convey, together with the right to exclusive use of the land conveyed, rights which were continuous and apparent at the time of subdivision and grant and were necessary for the exclusive use of the land conveyed.  Li CJ went on to point out that where the above is an appropriate description of a right sought to be implied as a contractual quasi-easement, the court will generally have little difficulty in holding that the tests for implying such a right are met[13].  He was also of the view that such a right can be implied in law for this type of case, and that it may, in given circumstances, equally be implied as a matter of business efficacy[14].

27.  In Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd, the first defendant sold to the plaintiff a shop which could be divided into two portions on the first floor of a commercial podium together with the entire second and third floors, but retained certain parts of the building including the entrance lobby on the first floor.  The lobby was linked to an external pedestrian walkway outside the building leading to a Mass Transit Railway station.  A staircase going up to the second floor was also situated in the lobby.  The first defendant later sold the entrance lobby on the first floor to the second defendant.  The two defendants were treated as if they were the same person for the purposes of the appeal.  The second defendant intended to erect a shop in the lobby which would block off one of the divided shops of the plaintiff and narrow the passageway in the lobby.  On the basis of the principles discussed in paragraph 24 above, the Court of Final Appeal held that the plaintiff had an implied contractual quasi-easement to use the link from the entrance lobby to the pedestrian walkway outside the building leading to the MTR station and to access the second and third floors of the commercial podium.

Quasi-easement in the present case

28.  The Plaintiff’s claim is based on quasi-easement which must be a reference to contractual quasi-easement. This is a matter of construction of the contract. The starting point is the DMC of Village House A.  An important legal principle governing the construction of a document is that one has to ascertain from the document the true intent of the parties to the document, such intent being the one conveyed to a reasonable reader having knowledge of all the factual circumstances in which the document was made: see Investors Compensation Scheme Ltd v West Bromwich Building Society[15] and Jumbo King Ltd v Faithful Properties Ltd & Ors[16].  The factual circumstances in which the DMC was entered into are set out below.

29.  Madam Wong was the sole owner of Village House A until 3 July 1978 when she sold Village House A to the 1978 Owners as tenants in common.  Nine days later, the 1978 Owners entered into the DMC which gave each of them the exclusive right to possess a designated floor.  At that time Village House A had already fully covered the entire land at section A, the internal staircase of the village house had been removed, and the external bridge and staircase provided the only means of access to and from the first and second floors.  There was no common land or area whatsoever inside and outside Village House A.  This was the situation on site when the DMC was entered into.

30.  The 1978 Owners purchased the whole 3-storey village house together from Madam Wong instead of each of them purchasing one floor.  As can be seen from Form A of the then District Office, this transaction was completed in the presence of lawyers as witnesses. They must have known that Village House A fully covered the entire land at section A.  This being the case, upon seeing the village house, they must have realised that the external bridge and staircase might be illegal and made enquiries with Madam Wong and their solicitors. They must have been told and had knowledge that the external bridge and staircase were illegal structures built on government land or land owned by others. Even if they had obtained verbal assurances from Madam Wong that these structures would not be removed, they should have known that removal of these structures was an inevitable reality. They must also have discussed how to have access to and from the first and second floors of Village House A in the event of the removal of these structures.

31.  The DMC was obviously drafted by the solicitors acting for Madam Wong and the 1978 Owners.  Paragraph 3 of the DMC provides as follows:

“In further pursuance of such agreement and in consideration of the premises and of the respective grants herein contained the First Owner and the Second Owner do and each of them doth hereby grant unto the Third Owner the full right and privilege to hold use occupy and enjoy to the exclusion of the First Owner and the Second Owner ALL THAT the SECOND FLOOR and the ROOF thereover of the said building Together with the right in common with the co-owners for the time being of the said premises to use the entrance hall staircases and landings and the common passages of and in the said building for all purposes connected with the proper use and enjoyment of the floor in the said building of which he is entitled to the exclusive use occupation and enjoyment and for the purpose of ingress to and egress from such floor.”

(Emphasis added)

This paragraph gives each of the 1978 Owners the exclusive right to the possession and use of a designated floor of the village house together with the right in common with the other two owners to use the “entrance hall staircases and landings and the common passages of and in the said village house”.  Also, paragraphs 4 and 5 of the DMC provide that the owner of each floor has to bear one third of the fees for the maintenance of the common passages, corridors, staircases, landings and passages and so on.

32.  The 2^nd Defendant contends that, as there was no internal staircase in the village house when the DMC was entered into, the above terms only concerned the external staircase.  I do not agree.  Situated outside section A for the exclusive use of the owner of the second floor, the external staircase was not a common passage or facility.  It was not an item to be covered by the DMC.  Nor was there any reason why the owners of the ground floor and the first floor had to share its maintenance cost. On the other hand, these common facilities did not include the bridge which provided access to and from the first floor.  If the owner of the first floor was obliged to pay for the maintenance of the external staircase, why were the other owners not obliged to pay for the maintenance of the external bridge?  The 2^nd Defendant’s interpretation would lead to such an unreasonable consequence.  This shows that her interpretation cannot possibly reflect the common intention of the 1978 Owners.  Furthermore, the 2^nd Defendant has never alleged that she has, pursuant to the DMC, paid for the maintenance and repair of this external staircase.  This indicates that the external staircase was not the staircase referred to in the DMC.  I do not accept the 2^nd Defendant’s interpretation.

33.  Although there was then no internal staircase or any such common passages or facilities inside Village House A, the 1978 Owners were fully aware of it. The solicitor drafting the DMC should also have had such knowledge. Nevertheless, even if the solicitor really did not have such knowledge and merely used a standard form of DMC, the DMC indicated that the solicitor’s clerk had explained the DMC to the 1978 Owners. The 1978 Owners apparently had not requested any amendment to the terms of the DMC and must have knowingly adopted those terms.  This being the case, an informed observer would, upon reading the DMC, infer that the common intention of the 1978 Owners was: in future, where necessary, they would rebuild the internal staircase and those facilities so that the owners of the first and the second floors could reasonably use their respective flats, with the relevant maintenance fees to be borne by the three owners in equal shares. Had there been no such intention, they would certainly have deleted these terms.

34.  The above findings also find support in the principle in Wheeldon v Burrow. Madam Wong solely owned the village house previously, using an internal staircase to access the first and second floors.  The flat on the ground floor was tantamount to the servient tenement of the first floor or the second floor, and the first floor the servient tenement of the second floor. The use of the internal staircase was a continuous, apparent and necessary right. Madam Wong later removed the internal staircase and built a bridge and an external staircase for access to and from the first and second floors. On the face of it, the internal passage to the upper floors had ceased to exist. However, the right of way had not disappeared as a result. As in Barry v Hasseldine, the grantee of land enjoys an easement over the grantor’s land for access to and from the land granted. Therefore, when access over others’ land to and from the land granted is closed and there is no other lawful access, the grantee is entitled to a right of way over the grantor’s land for access to and from the land granted. The position is similar in the present case. The quasi-easement did not disappear as a result of Madam Wong’s removal of the internal staircase, nor did such right lose its continuous and apparent character.  Had Madam Wong severed and sold the first and second floors and had the three floors of the village house been separate pieces of land, such right would have been a quasi-easement which ripened into a true easement upon severance. The 1978 Owners purchased Village House A as tenants in common from Madam Wong. Each of them was entitled to use any part of the village house. Before the DMC was entered into, they were in the same position as Madam Wong. When the DMC was entered into, they were severing the interests in the village house. Applying the principle in Wheeldon v Burrow to the present case, the court can infer that the common intention of the 1978 Owners upon entering into the DMC was that the owners of the upper floors had, for the purpose of gaining access to and from their flats, a right of way over part of the land of which the owners of the lower floors had exclusive possession.

35.  To sum up, based on the construction of the DMC and the principle in Wheeldon v Burrow, I infer that the common intention of the 1978 Owners was: in the future, where necessary, they would rebuild the internal staircase and relevant facilities so that the owners of the first and the second floors could reasonably use their respective flats. This is a contractual quasi-easement. Although the Plaintiff and the 2^nd Defendant were not contracting parties to the DMC, the said rights and obligations had eventually passed to them respectively from their predecessors-in-title.

Breach of the New Grant

36.  The main ground of defence of the 2^nd Defendant is that, before the second floor was added to Village House A, the then owner commenced the addition works without first complying with Special Conditions Nos. 2 and 3 of the New Grant in 1975 by obtaining the District Commissioner’s permission in writing, and therefore she did not lawfully have the right to build an internal staircase.  The date of the New Grant is 13 November 1958.  Special Conditions Nos. 2 and 3 provide as follows:

“2.    Before beginning to build, the Purchaser shall obtain the District Commissioner’s permission in writing to do so.

3.    No building or site development shall be commenced on the lot unless the District Commissioner shall have approved in writing the plans submitted in accordance with Special Condition No. 2(b) in Government Notification No. 364 of 1934.”

The main ground of defence of the 2^nd Defendant rests upon three letters from the Buildings Department and the Lands Department in response to her then solicitors’ enquiries.  She submits that those letters of reply confirmed that the then owner added a second floor to Village House A without the prior written permission of the District Commissioner.

37.  In order to properly construe those three letters of reply, it is necessary to understand the government procedures for approving this type of village house. Village House A is a village house built in accordance with the Lands Department’s Small House Policy, with a height of more than 7.62 m but not more than 8.23 m and with a roofed-over area not exceeding 65.03 m², and is a so-called “ting house”. This type of village house was built with exemptions from certain provisions of the Buildings Ordinance regarding certain building works carried out on buildings in the New Territories (for example, exemption from submission of three certificates in respect of building works, site formation and drainage works respectively), such exemptions being granted by the Director of Lands in exercise of discretion pursuant to the Buildings Ordinance (Application to the New Territories) Ordinance, Cap 121. Hence, the Director of Lands and the Lands Department, not the Building Authority and the Buildings Department, are the authorities for approving building village houses. Applications for approval have to be made to the Lands Department, not the Buildings Department. Works shall commence only upon obtaining various certificates of exemption issued by the Director of Lands.  Upon the completion of the village house and fulfilment by the grantee of the necessary obligations prescribed in the general and special conditions in the documents for the sale of land, the Director of Lands will issue a Certificate of Compliance.  At the same time, the grantee may apply to the Buildings Department for an Occupation Permit. Reference can be made to the leaflet “Building New Territories Exempted Houses” of the Lands Department [17] for the above procedures.  Nevertheless, I must point out that the above procedures are based on the provisions of the Buildings Ordinance (Application to the New Territories) Ordinance which was enacted in 1987.  The situation prior to 1987 might be even more chaotic and unsystematic; the addition works of Village House A were carried out in 1975.

38.  The first reply letter on which the 2^nd Defendant relies was dated 15 November 2013 from the Buildings Department in reply to her then solicitors’ letter seeking to obtain the approved plans of Village House A.  The Buildings Department’s reply was that they had no record of approved building works on the lot in question:

“... there is no record of approved building works on the subject lot”

As the Buildings Department was not the authority for approving building Village House A, it is understandable that the Buildings Department did not have the relevant approved plans.  Its reply is not sufficient proof that the then owner of Village House A did not obtain the relevant approval prior to the commencement of addition works.

39.  The second letter on which the 2^nd Defendant relies is one dated 21 November 2013 from the Lands Department in reply to her then solicitors’ letter making the same enquiry.  The Lands Department stated in the letter that there was no approved building plan for the lot in the record of its office:

“... there is no approved building plans for the lot in the record of this office.”

Mr Yip contends that the above reply cannot conclusively prove that the then owner of Village House A did not provide approved building plans.  He submits that it might be because the matter happened a long time ago that the Lands Department could not find the record. His argument may be speculative, but it tallies with the situation prior to 1987 which I described in paragraph 37 above.

40.  The third letter on which the 2^nd Defendant relies is one from the Lands Department in reply to her then solicitors’ enquiries on 22 January 2014.  In that letter, her solicitors produced a plan provided by the Plaintiff during discovery and requested the Lands Department to confirm whether the plan had been submitted to the Lands Department for approval. The Lands Department was also requested to provide other approved plan(s) and, if there was no approved plan, to confirm whether approval had been granted for any works at that section in light of the additional conditions of the New Grant in 1975.  The Lands Department replied on 13 March 2014 in the following terms:

“Thank you for your letter ...

I refer to the plan attached with your letter dated 22 January 2014. According to the file record of this office, the subject plan was submitted in respect of an intended alteration works for the building erected on Lot No. 1886 R.P. The plan was not verified by this office as approval was not required for the proposed alteration works inside the building.

In regard to Lot No. 1886 S.A concerning your court case, there is no approved building plan for the Lot in the record of this office.  An Occupation Permit was issued on 27 January 1962 for the premises erected on the Lot.  After the issuance of the Modification Letter dated 30 September 1975, no redevelopment approval had been given by this office.  For any internal alternation/construction works of the existing building, approval is not required as far as the works would not affect the structural safety of the critical elements of the building.”

(Emphasis added)

It can be seen from the second paragraph of the letter that the plan produced by the 2^nd Defendant’s solicitors did not concern section A involved in the present case. In the third paragraph, the Lands Department stated that there was in its record no approved building plan in respect of section A. It also stated that an Occupation Permit for the section was issued on 27 January 1962 and, since the issuance of additional conditions of the New Grant in 1975, it had not given any redevelopment approval for the section.  However, the Lands Department also pointed out that no approval was required as far as the works would not affect the structural safety of the critical elements of the building.

41.  The 2^nd Defendant contends that the third paragraph of the letter from the Lands Department confirmed that the then owner had not submitted any plan to apply to the District Commissioner for written approval in respect of the addition of the second floor. However, one can see from the first two sentences of the paragraph that, even with no approved plan having been filed, the Lands Department would still issue an “Occupation Permit” (I believe this refers to a Certificate of Compliance, not the Occupation Permit issued by the Buildings Department).  It showed that back in 1962 the Lands Department either did not require owners to submit plans in applying for permission to build village houses or did not have a mechanism for filing approved plans. As I pointed out in paragraph 37 above, the Director of Lands has the power to exempt the submission of certificates in respect of the works, and the leaflet “Building New Territories Exempted Houses” published by the Lands Department also points out that the Department will exempt submission of plans for the works. Therefore, the absence of an approved plan in the record of the Lands Department does not amount to proof that the addition works had not been approved.

42.  The last sentence in that paragraph is most crucial. That sentence was in reply to the third enquiry made by the 2^nd Defendant’s solicitors, namely if there was no approved plan, whether the Lands Department had given approval for any works at that section after 1975 in light of the additional conditions of the New Grant in 1975. The Lands Department had made it clear in the first sentence that there was no approved plan for the section in its record. Nevertheless, as I said in the preceding paragraph, it does not amount to proof that the addition works had not been approved. Moreover, the Lands Department also stated in the last sentence that no approval was required as long as the works would not affect the structural safety of the critical elements of the building.  However, neither party has adduced evidence as to whether or not the addition of the second floor would affect the structural safety of the critical elements of Village House A. The 2^nd Defendant’s ground of defence is that the addition works of the village house were carried out without approval. She at least bears the burden of adducing evidence. The 2^nd Defendant’s solicitors merely made general enquiries without specifically asking whether prior approval was required for the addition of the second floor to Village House A or whether such addition complied with or contravened the additional conditions of the New Grant in 1975.  Nor did her solicitors seek further confirmation or clarification from the Lands Department. Furthermore, she has neither called any witnesses of the Lands Department nor filed any witness statements or affidavits. In my view, the reply from the Lands Department is equivocal and not sufficient proof that the addition works had not been approved. The 2^nd Defendant has failed to discharge the burden of proof.  I therefore dismiss this ground of defence.

The DMC did not mention an internal staircase

43.  The 2^nd Defendant’s second ground of defence is that the DMC made no mention of an internal staircase.  In construing the DMC, I have in effect dealt with this ground of defence.  This ground of defence is not made out.

No compensation by the Plaintiff to the 2^nd Defendant

44.  The 2^nd Defendant submits that the Plaintiff has to pay her compensation for asking her to make space for an internal staircase as this reduces the space she enjoyed. The Plaintiff and the 2^nd Defendant are both tenants in common of section A, and the Plaintiff should have the right to use any part of that section. However, the DMC governs the interests of the respective owners and defines the parts of which each of them is given exclusive possession. Nevertheless, on my construction of the DMC, the Plaintiff has a contractual quasi-easement to reinstate or build an internal staircase in the village house so as to exercise her right of way for access to and from her flat on the second floor. The 2^nd Defendant’s exclusive possession of the flat on the ground floor is subject to the Plaintiff’s contractual quasi-easement. On this basis, the Plaintiff can lawfully exercise her right of way in the 2^nd Defendant’s flat and build a staircase for access to and from her flat on the second floor. There is no legal basis on which the 2^nd Defendant can demand compensation from the Plaintiff.

45.  Furthermore, the 2^nd Defendant also admits that in the past there was an internal staircase inside her flat on the ground floor. Hence, there is nothing unfair in reinstating or building the internal staircase, and again there is no legal basis on which she can demand compensation. 

The DMC did not set aside a common area for an internal staircase, and building the staircase would subject the 2^nd Defendant to occupier’s liability

46.  In her latest amended defence, the 2^nd Defendant avers that neither the DMC nor previous deeds of assignment set aside a common area for an internal staircase, and that building the staircase would subject her to occupier’s liability which is unfair to her.

47.  For the same reasons as those set out in paragraphs 44 and 45 above, the Plaintiff has a contractual quasi-easement to reinstate or build an internal staircase in the village house so that she can exercise her right of way for access to and from her flat on the second floor. As a tenant in common of Village House A, the 2^nd Defendant has a duty to provide the necessary space and is subject to the related liability. This is not unfair to her.  Being a tenant in common, she can ensure that the internal staircase is built under the supervision of qualified persons and with appropriate building materials. It is also open to tenants in common to jointly take out appropriate insurance against the relevant risks.

Conclusion

48.  For the above reasons, I order that the 2^nd Defendant shall allow the Plaintiff to make appropriate space in her flat on the ground floor, of which she has exclusive possession, for the purpose of building an internal staircase leading from the ground floor to the second floor and the rooftop, such staircase being required to comply with the specifications under the Small House Policy of the Lands Department; and that the 2^nd Defendant shall bear one third of the building costs.

49.  Moreover, the 2^nd Defendant unreasonably obstructed the rebuilding of the staircase, as a result of which the Plaintiff could not enter and leave her flat on the second floor and had to rent the quarters provided by her husband’s employer. Therefore, I order the 2^nd Defendant to pay damages to the Plaintiff for the following losses:

(1)     Damages for loss of rent in the sum of HK$2,800 per month, for the period from 11 June 2013 until she provides passageway and space for the Plaintiff to carry out the works;

(2)     Interest on the accrued damages stated in sub-paragraph (1) above for the period from 11 June 2013 to the date of this judgment, such interest to be calculated on the said accrued damages as principal and at the rate of 1% above the prime rate of the Hong Kong and Shanghai Banking Corporation Limited for half of the said period; and

(3)     Interest on the outstanding accrued damages stated in sub-paragraph (2) above, such interest to be calculated on the said outstanding accrued damages as principal and at judgment rate until full payment.

50.  Finally, I order that the 2^nd Defendant shall pay the Plaintiff’s costs, such costs to be taxed in accordance with the Legal Aid Regulations.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Edmund Cham, Solicitor.