CHE SIO FONG v. FUNG WAI KAM

DCCJ 987/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 987 OF 2012

--------------------

--------------------

JUDGMENT

--------------------

Background

1.  By an assignment dated 12 August 2011, the plaintiff became and still at the trial of this action remains the registered owner of the ground floor (the “G/F”) and the garden thereto (the “Garden”) (together the “G/F Properties”) of the messuages erections and buildings (the “Building”) on Lot No 1653 (the “Lot”) in Demarcation District No 9 (now known as 83B Yuen Long, Tai Po, New Territories).  A wall was built along the boundary of the Lot (the “Boundary Wall”).

2.  The Building is a three-storey building built on the Lot comprising the G/F, the first floor with a balcony (the “1/F”), the second floor with a balcony (the “2/F”) and a roof (the “Roof”).  The 1/F and the G/F together form a duplex unit in the Building with an internal staircase.  There is a staircase connecting the G/F, the 1/F and the 2/F of the Building (the “Stair”). 

3.  The defendant was and is the registered owner of the 2/F, the Roof and the Stair (together the “2/F Properties”) since about 14 June 2000.

4.  The Lot was and is subject to and with the benefit of a deed of mutual covenant dated 14 June 2000 (the “DMC”).  There was a plan with the title “Garden and Right of Way” annexed to the DMC (the “Garden Plan”).  On the Garden Plan there was an area coloured yellow and marked “Right of Way” (the “Yellow Part”). A copy of the Garden Plan is annexed to this judgment as Annex 1.

5.  The plaintiff agreed that the defendant as owner of the 2/F Properties and her tenants and/or licensees were entitled to a right of way over the Yellow Part for the purpose of, inter alia, ingress to and egress from the 2/F Properties (the “Right of Way”).  The plaintiff’s case was that the Right of Way was confined to the Yellow Part but the defendant built two metal gates (the “Metal Gates”) at the locations marked “R” and “L” on the plan annexed to the statement of claim (the “P’s Plan”).  I annex the P’s Plan to this judgment as Annex 2.  The Metal Gates were built between the external wall of the Building and the Boundary Wall.  In so doing, a strip of land of the Lot including the Yellow Part was enclosed (the “Strip”).  The Strip was hatched on the P’s Plan.  There was a cabinet near the Metal Gate marked “L” housing the water meters for the Building (the “Water Meters Cabinet”) and a concrete rack near the Metal Gate marked “R” housing LPG drums used by the occupants of the Building (the “LPG Rack”).  The defendant built another gate (the “Front Gate”) marked “F” on the P’s Plan along the Boundary Wall between the Metal Gates.  I annex to this judgment as Annex 3 a plan annexed to the defence showing the locations of the Water Meters Cabinet and the LPG Rack (the “D’s Plan”).  The D’s Plan also showed a foul water manhole and a flower bed which will be discussed in the later part of this judgment.

6.  The plaintiff pleaded in the statement of claim that:-

“9. …… the Defendant has, by herself, her servants, agents, tenants and/or licensees, failed to keep to the Right of Way and has, without the consent, approval and/or licence of the Plaintiff, wrongfully:-

(a) ingressed to and egressed from the 2/F Properties through the Strip other than by the Right of Way;

(b) placed multiple items on the Strip; or otherwise

(c) used, occupied and/or enjoyed the Strip

on a regular basis as if the Defendant is the owner of the Strip.

10. The acts pleaded in paragraph 9 hereinabove have amounted to trespass to the G/F Properties and the said trespass is continuing.”

7.  The plaintiff seeks the following relief against the defendant:-

(1) an order that the defendant do remove or cause to be removed the Metal Gates and the Front Gate and the items that she placed or caused or allowed to be placed on the Strip;

(2) an injunction to restrain the defendant whether by herself or her servants, agents, tenants or licensees from using, occupying or enjoying the Strip except in the form of the Right of Way on the Yellow Part;

(3) a declaration that, the defendant, as the owner of the 2/F Properties, or her tenants or licensees, has no right whatsoever to use, occupy or enjoy the Strip except in the form of the Right of Way on the Yellow Part;

(4) a declaration that, the defendant failing (1) above, the plaintiff is entitled to remove the Metal Gates, the Front Gate and any items on the Strip and to be reimbursed by the defendant for the expenses so incurred; and

(5) damages for trespass.

8.  Mr Tang, counsel for the plaintiff, confirmed that the plaintiff only asked for nominal damages for trespass.

9.  The defendant’s case was that the Strip was the common area referred to in the DMC.  Alternatively, the defendant claimed that she had a quasi-easement over the Strip.

The plaintiff’s case and evidence

10.  The plaintiff had signed a witness statement.  The plaintiff also served two witness statements signed by Mr Yeung Wing Kit (“Yeung”), the plaintiff’s husband and registered owner of the 1/F. 

11.  Yeung had testified at the trial.

12.  Yeung and the plaintiff purchased the G/F Properties and the 1/F in August 2011.  At that time the Boundary Wall was already there.  There was a gate at the northeastern part of the Boundary Wall which was used by the plaintiff’s family to access to their properties.

13.  Yeung stated that all the land of the Lot surrounding the Building belonged to the Garden.  The defendant and her family members and visitors had to pass through the Garden to get access to the Stair to go the 2/F.  The DMC had designated the Yellow Part of the Garden for this purpose.  The Yellow Part linked the Stair to the boundary of the Lot.

14.  Yeung and the plaintiff attended inspection of the G/F Properties and the 1/F on 11 August 2011, ie the day before completion of their purchases. They found that the Metal Gates which should have been built along the boundary of the Yellow Part had been built beyond the Yellow Part onto the Garden to form the Strip.  The defendant had placed her chattels on the Strip.  Yeung and the plaintiff were being deprived of the use of their properties ie the Strip. Yeung agreed at the trial that as at the date of the trial, most of the chattels placed by the defendant on the Strip had been removed.

15.  The Boundary Wall had been built along the part of the Yellow Part adjoining the boundary of the Lot blocking the exit from the Yellow Part to the footpath outside the Lot.  Instead, the Front Gate was built about two meters away along the boundary of the Lot.  The defendant and her family used the Front Gate as their exit.  Yeung stated that he met the defendant at the aforesaid inspection and raised this matter with the defendant.  The defendant said that the original exit was blocked by the Boundary Wall and she had all along been using the Front Gate as exit.  Yeung proposed to build a new gate at his costs along the boundary of the Yellow Part to reinstate the passage constituted by the Yellow Part as stipulated in the DMC but the defendant refused.

16.  Yeung and the plaintiff met the defendant and her husband on the completion date of their purchases.  They again raised the issue of restoring the Right of Way to the Yellow Part but the defendant’s husband refused.  Yeung proposed to move the Metal Gate marked “L” on the Plan to the edge of the Yellow Part which was refused by the defendant’s husband on the ground that this would deprive him of the use of the common water meters.  Yeung stated that he and the plaintiff had never opposed the defendant to have reasonable access to read or maintain the common water meters.

17.  Yeung stated that other than the Water Meters Cabinet, there were no other common facilities in the Strip.  In respect of the LPG Rack, Yeung said that LPG drums were movable.  Yeung stated that there were other common facilities, such as the septic tank and the public electricity meters, located in other part of the Garden outside the Strip.

18.  Yeung stated that he and the plaintiff had written letters in September and October 2011 to the defendant and her husband inviting them to discuss the above matters but no response was received.

19.  Yeung stated that when he and the plaintiff inspected the G/F Properties and the 1/F before their purchases, no one had opened the Metal Gates for their inspection or showed them the locations of the LPG Rack, the Water Meters Cabinet and the Front Gate.  Yeung was told by a male at the inspection on the day before completion that the Metal Gates were there when they moved in and he did not know why the Metal Gates were not built along the boundary of the Yellow Part.  Yeung stated that their vendors had not given the keys of the Metal Gates to him or the plaintiff.  He said that the Metal Gates were not locked.

20.  The plaintiff in her witness statement confirmed the content of Yeung’s first witness statement.  The parties agreed at the trial that the witness statement of the plaintiff be adopted as her evidence without calling her to give oral evidence at the trial.

The defendant’s case and evidence   

21.  The defendant had served witness statements of eight witnesses.  They were: the defendant, 陳劍成 (the defendant’s husband) (“Chan”), 馮光成 (the defendant’s brother) (“Fung”), Poon Wai Lan (Fung’s wife) (“Poon”), Ip Koon Fat (“Ip”), 江建華 (“Kong”), Lam Suk Ling (“Lam”) and 林鴻源 (Lam’s father) (“LHY”).  Other than Lam and LHY, the defendant and other defence witnesses had testified at the trial.

22.  Ip was the attorney of the original owner of the Lot, Ip Yun Choi (the “Owner”). Ip acting for the Owner agreed with the defendant and Poon in November 1998 to build a three-storey house (ie the Building) on the Lots and to sell the Lot with the Building to the defendant and Poon.  The defendant agreed to purchase the 2^nd floor and the roof of the Building whereas Poon and Fung agreed to purchase the ground floor, the 1^st floor and the garden. At that time the Lot was a piece of vacant land.  It was agreed that the defendant and Poon would pay for the construction costs of the Building and such construction costs would form part of the purchase price.  The building contract was signed by the defendant and Poon with the builder.

23.  The parties (ie Ip, the defendant and Poon) agreed to build a cabinet for the water meters of the Building (the “Water Meters Cabinet”) and a rack for LPG drums (the “LPG Rack”) at the external wall of the Building for use of the ground floor unit and the 2^nd floor unit.  They also agreed that the land between the Water Meters Cabinet and the LPG Rack would be a common passage (公用通道) (the “Passage”) for use of the 2^nd floor unit to access to the public road.

24.  Ip engaged a registered surveyor, Mr Tang Sze Kin (the “Surveyor”), to prepare a plan for the garden and the right of way (路權) (ie the Garden Plan) to be annexed to the DMC.  During the construction of the Building Ip, Fung, Poon, Chan, the defendant and all the workers used the Passage to get access to the public road.

25.  Construction of the Building was completed in early 2000.  When Ip showed the defendant and Fung the Garden Plan, Ip said that the Yellow Part on the Garden Plan showing the Right of Way was not conforming to the Passage. The parties (ie Ip, Fung, Poon and the defendant) agreed that the area of the Passage should be between the Water Meters Cabinet and the LPG Rack.  Ip, Fung and Poon agreed (同意) and promised (承諾) that the area of the Passage should be marked by the Water Meters Cabinet and the LPG Rack and the Passage should be used by the 2^nd floor unit for ingress and egress to and from the Building.

26.  The defendant completed her purchase of the 2/F Properties on about 14 June 2000.  She executed the DMC with the Owner (acting through Yip).  Before they executed the DMC, Ip explained to her again that the Yellow Part on the Garden Plan did not correctly show the Right of Way but it was not necessary to amend the Garden Plan as it was not prepared after survey (鑑於公契圖則並無經過測量) and was only for identification purpose only and both Ip, Fung and Poon had agreed and confirmed that the area of the Right of Way would be in accordance with the Passage.

27.  After the completion of the defendant’s purchase of the 2/F Properties, Poon also completed the purchase of the G/F Properties and the 1/F on about 28 July 2000.

28.  After the defendant and Poon purchased their respective properties, they agreed to build a boundary wall (ie the Boundary Wall).  They also agreed to build the Metal Gates and the Front Gate with the area between the Metal Gates (ie the Strip) as “entrance hall and common area” (入口大堂和公用地方) referred to in the DMC which was also the area of the Passage for use of the 2^nd floor unit to access to the footpath leading to the public road.  Ip also confirmed to the defendant and Poon the exact location and area of the Boundary Wall.  Fung then on behalf of the defendant and Poon engaged builder and contractor to build the Boundary Wall and install the gates (ie the Metal Gates and the Front Gate). The works for the Boundary Wall and the said gates were completed in November 2000.

29.  The defendant and her family had been using the Passage (ie the Strip) for access to the public road since November 2000.

30.  The evidence of the defendant, Chan, Fung, Poon and Ip confirmed the above historical events before Poon disposed of her ownership of the G/F Properties in June 2005.

31.  Poon sold the G/F Properties in June 2005.  The ownership of the G/F Properties changed again in November 2008 before the plaintiff acquired it in August 2011.  The defendant stated that all predecessors of the plaintiff were aware of and agreed that the Strip was the ground floor lobby (地下大堂) and public area (公用地方) and passage for the 2^nd floor unit.

32.  The defendant said the she was told by Lam, one of the vendors who sold the G/F Properties and the 1/F to the plaintiff and Yeung, that during the inspection by the plaintiff and Yeung, their vendors had opened the Metal Gates to show the plaintiff and Yeung the Passage, the locations of the LPG Rack, the Water Meters Cabinet and the Front Gate.  The plaintiff and Yeung had also been told the location and nature of the Passage.  Keys for the Metal Gates and the Front Gate were also handed over to the plaintiff and Yeung upon completion.

33.  The defendant and Chan also gave evidence on the encounters between them and Yeung in August 2011.  Of course, they had different accounts for the events including whether the plaintiff had sent letters to the defendant in September and/or October 2011.

34.  Poon stated that when she sold the G/F Properties and the 1/F in June 2005, her husband (ie Fung) had explained to the purchasers the area, nature and usage of the Passage.  The purchasers understood and agreed.  Fung also handed over the keys for the Metal Gates and the Front Gate to the purchasers. Fung confirmed the aforesaid evidence of Poon.

35.  Kong’s evidence confirmed that he had witnessed the argument between Yeung and Chan on about 13 August 2011.

36.  The parties agreed at the trial that the witness statements of Lam and LHY be adopted as their evidence without calling them to give oral evidence at the trial.

37.  Lam stated in her witness statements that when she and her co-owners purchased the G/F Properties and the 1/F in September 2008, their vendors had explained to them that there was a passage in the Garden for the 2^nd floor unit to access to the public road through the Front Gate.  The vendors had also explained to them that the Garden did not include the Strip.  Lam stated that they understood and agreed.  The vendors had handed over a set of keys for the Metal Gates and the Front Gate to them upon completion.

38.  Lam in her witness statement stated that her father (ie LHY) had opened the Metal Gates to show and explain the Passage to the plaintiff and Yeung when they inspected the properties.  Her father also showed the plaintiff and Yeung the locations of the LPG Rack, the Water Meters Cabinet and the electricity meters.

39.  LHY’s witness statement was to confirm Lam’s evidence on inspection of the properties by the plaintiff and Yeung.

Discussion and ruling

40.  The defendant had proposed a site visit to the Lot and the Building during the trial.  The trial took place in 2013.  Matters relevant to adjudication of the issues in dispute occurred mainly in 2000, ie more than 13 years ago.  I did not see that a site visit in 2013 would assist me in determining the legal right of the parties defined back in 2000.  I declined the defendant’s proposal.

41.  The defendant derived her title to the 2/F Properties from an assignment dated 14 June 2000 when the Owner (acting through Ip) assigned the 2/F Properties to the defendant (the “D’s Assignment”).  The plaintiff derived her title to the G/F Properties from Poon who was the first purchaser of the G/F Properties from the Owner.  Poon derived her title to the G/F Properties and the 1/F from an assignment dated 28 July 2000 (the “Poon’s Assignment”) when the Owner (also acting through Ip) assigned the G/F Properties and the 1/F to Poon.  By an assignment dated 12 August 2011 (the “P’s Assignment”), the plaintiff became the owner of the G/F Properties.  The P’s Assignment expressly provided that the G/F Properties assigned to the plaintiff were subject to such rights and rights of way as were more particularly described, mentioned and/or referred to in the Poon’s Assignment and all other subsisting rights of way, rights, privileges, easements and appurtenances (if any) belonging or appertaining to the G/F Properties.

42.  Before I discuss the issues in disputes between the parties, I shall analyse what had been assigned to the defendant and Poon by virtue of the D’s Assignment and the Poon’s Assignment.

43.  The D’s Assignment was executed before the Poon’s Assignment.  In the D’s Assignment, the Owner allotted exclusive possession of the 2/F Properties to the defendant.  The Owner reserved the sole and exclusive right and privilege to hold, use, occupy and enjoy the other parts of the Lot and the Building save and except the 2/F Properties assigned to the defendant.  The 2/F Properties were assigned to the defendant with all easements, rights, privileges and liabilities (if any) subsisting in the 2/F Properties as at 14 June 2000 including but not limited to those created by, mentioned and/or referred to in the Government lease and the DMC.

44.  Under the D’s Assignment, the Owner retained the exclusive possession of the Strip (including the Yellow Part) but subject to the defendant’s easements and rights subsisting as at 14 June 2000 including those created by, mentioned and/or referred to in the DMC.  What easements and rights had been created by, mentioned and/or referred to in the DMC were in dispute between the parties herein.  They are the subject matters of this judgment which will be discussed below.

45.  In the Poon’s Assignment, the Owner allotted exclusive possession of the G/F Properties and the 1/F to Poon.  The Owner reserved unto himself and other co-owners of the Lot and the Building the sole and exclusive right and privilege to hold, use, occupy and enjoy the other parts of the Lot and the Building save and except the G/F Properties and the 1/F assigned to Poon.  The G/F Properties and the 1/F were assigned to Poon with all easements, rights, privileges and liabilities (if any) subsisting in the G/F Properties and the 1/F as at 28 July 2000 including but not limited to those created by, mentioned and/or referred to in the Government lease and the DMC.

46.  The G/F Properties included the Garden.  In the Poon’s Assignment, the only word description of the Garden was: which said Garden was shown on the Garden Plan annexed to the Poon’s Assignment and thereon coloured green.  The defendant contended that the Strip was a common area to which the plaintiff had no exclusive possession.  The stance of the defendant was that the Garden (exclusive possession of which had been allotted to Poon, the plaintiff’s predecessor) did not include the Strip.  This was what the defendant and the defence witnesses stated in their evidence.  Whether the Strip was a common area and whether the Strip (or at least the part of Strip other than the Yellow Part) formed part of the Garden are to a large extent two sides of the same coin which I shall discuss at the later part of this judgment.

47.  As both the title of the defendant and Poon to their respective properties was subject to all easements, rights, privileges and liabilities created by, mentioned and/or referred to in the DMC, I shall now turn to the DMC.  It was common ground that the clause of the DMC central to the dispute between the parties was clause 2(a).  Clause 2(a) of the DMC provides that:-

“The owner and his tenants and licensees shall in common with his co-owners of the whole of the said premises [ie the Lot] and their tenants and licensees have access to and be entitled to use the entrance-hall staircases and landings and the common passages of and in the said building [ie the Building] and the area other than the roofed over area of the said building of and in the said premises (such common area is shown and coloured Yellow on the Plan [ie the Garden Plan] annexed hereto for identification purpose) 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 and for the proper maintenance and repair of the said building and the common parts thereof free from obstruction.”

48.  Under clause 2(a) of the DMC, an owner of the Lot and the Building and his co-owners should have access to and be entitled to use in common certain areas for certain purposes.

49.  The areas stipulated in clause 2(a) were:-

(1) the entrance-hall staircases and landings and the common passages of and in the Building; and

(2) the area other than the roofed over area of the Building.

50.  The purposes stipulated in clause 2(a) were:-

(1) for all purposes connected with the proper use and enjoyment of the owner’s floor;

(2) for the purpose of ingress to and egress from the owner’s floor;

(3) for the proper maintenance and repair of the Building; and

(4) for the proper maintenance and repair of the common parts of the Building.

51.  The parties had no dispute that the defendant and her family and visitors were entitled to use the Yellow Part as passage.  The land in dispute is the part of the Strip beyond the Yellow Part (the “Disputed Land”).  The Disputed Land and the Yellow Part together formed the Strip which was the Passage.  The Strip and the Passage in this judgment refer to the same piece of land.

52.  There was no dispute that the Water Meters Cabinet and the LPG Rack were located in the Disputed Land.  There was also no dispute on the locations of the Metal Gates, the Front Gate and the Boundary Wall.  There was no dispute that there was a manhole in the Disputed Land.  The defendant said that it was a foul water manhole.  Yeung remarked on a photograph provided by him (at p 91 of Bundle I) that it was a waste water manhole (洗水沙井) used only by the owner of the ground floor.  Manhole is a point of access to the sewerage of the Building.  It does not matter whether you call it foul water manhole or waste water manhole.  It serves the same purpose.  I do not accept Yeung’s evidence that the manhole located in the Disputed Land served only the ground floor unit.  Another photograph provided by Yeung (also at p 91 of Bundle I) clearly showed that the waste water from the balcony of the 2^nd floor unit would also drain into that manhole.  I find that this manhole served the whole Building.

53.  The plaintiff’s case was that the Disputed Land belonged to her and the defendant had trespassed upon the same.  The defendant’s case was that she was contractually entitled to use the Strip either as a common area or by virtue of a contractual quasi-easement.  Alternatively, she had obtained a quasi-easement on the Strip in the Wheeldon v Burrows sense.

54.  All land in Hong Kong is held on a government lease.  The developer (in this case the Owner) leases the land from the government and notionally divides the leased land (in this case the Lot) into a specified number of equal undivided shares (in this case the Lot was divided into three equal undivided shares) and allots exclusive rights of occupation over particular units or parts of the building or land to stated parcels of those undivided shares. Individual owners acquire their interest by taking an assignment of undivided shares, making them tenants in common with other owners who do likewise.  Individual owners execute a deed of mutual covenant regulating by contract their rights inter se regarding the exclusive use and occupation of the units and/or land allotted to their respective parcels of undivided shares, their use of the common parts of the building and/or the land, as well as their mutual obligations on such matters as management charges.  The operation of such covenants is underpinned by statutory provisions which ensure that the burden of positive covenants can run with the land and that such covenants may operate notwithstanding the absence of dominant and servient tenements.  (See Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd & Anor [2008] 6 HKC 42 at 51-52)

55.  As owners of units co-own the building and do not own separate tenements, easements may not be created as one cannot have a real easement over one’s own property.  In a multi-storey building in Hong Kong an owner’s right of way over the area under exclusive possession of another co-owner is a quasi-easement. It may either be a contractual quasi-easement or a quasi-easement in the Wheeldon v Burrows sense.

56.  I shall now consider the various lines of defence put forward by the defendant.

Contractual entitlement

57.  Trespass to land was a wrong against possession of the relevant land. The first contention of the defendant was that the plaintiff did not have exclusive possession of the Strip including the Disputed Land which was a common part co-owned by the plaintiff and the defendant.  Alternatively, the defendant contended that she had a contractual quasi-easement over the Disputed Land under the DMC.

Whether the Disputed Land was a common part?  

58.  The first issue for the court was whether the Disputed Land was a common part co-owned by the plaintiff and the defendant.  If so, the plaintiff had no legal entitlement to exclusive possession of the Disputed Land and her claim would fail.

59.  Mr Chong, counsel for the defendant, submitted in para 35 of his closing submissions that: “the “entrance hall”, “landings” and “the common passages of … the said building” stipulated under clause 2(a) of the DMC individually or collectively mean the Disputed Area.”  The defendant contended that the Disputed Area was a common pert.

60.  Mr Chong submitted in para 21 of his closing submissions that:-

“As a matter of literal construction, clause 2(a) of the DMC clearly stipulated that “such common area” shown and coloured yellow on the plan annexed thereto refers only to “the area other than the roofed over area of the said building of and in the said premises”. As such, Clause 2(a) of the DMC also stipulated, among others, that the “entrance-hall”, “landings”, and “common passage of … the said building” are common parts as well. These three common parts are not shown by the portion coloured yellow on the plan annexed to the DMC [ie the Garden Plan].” (Original emphasis and underline)

61.  Mr Tang, counsel for the plaintiff, put forward the following answer in his closing submissions:-

“20. By para 21 of her Opening [sic], D argues that the yellow-colored part in the DMC plan refers only to unroofed area. D goes on to argue that the “entrance-hall”, “landings” and “common passages” etc are also common parts but are undefined by the DMC.

21. Logically D must be suggesting that “entrance-hall”, “landings” and “common passages” etc are roofed or else she cannot possibly explain why they do not fall within the yellow-colored part.  Indeed, D cannot possibly argue that the “entrance-hall”, “landings” and “common passages” are unroofed as they were referred to as “of and in the said building” immediately thereafter in the same clause 2.1(a) [sic] (“the building” has been defined as the three-storeyed building in the recital of the DMC at the bottom of [C212]).

            ……

24. If the “entrance-hall”, “landings” and common passage” are roofed area and hence fall outside the yellow-colored part of the DMC plan which deals only with unroofed area, how, then, could they be referable to the Strip, which is undisputedly a piece of unroofed land outside the Building?” (Original emphasis and underline)

62.  Mr Chong argued that the phrase “of and in the said building” only qualified the “common passages” but not “the entrance-hall staircases and landings”.  The full text of clause 2(a) of the DMC had been set out in para 47 above.  I do not propose to repeat the same here.  If Mr Chong was right in that the entrance-hall, staircases and landings stipulated in clause 2(a) of the DMC were not referred to the entrance-hall, staircases and landings of and in the Building, I do not know what entrance-hall, staircases and landings the DMC was referring to.  No evidence had been adduced to show that there was any staircase built on the Lot but not in the Building.  Mr Chong’s above contention lacked evidential basis.

63.  I agree with Mr Tang and reject Mr Chong’s aforesaid submission.

64.  The defendant further contended that exclusive possession of the Strip had not been allotted to Poon, the plaintiff’s predecessor.  In this way, the Strip remained a common area.

65.  Mr Chong submitted that by virtue of clause 1 of and first schedule to the DMC, the Owner covenanted to have the sole and exclusive right and privilege to the use occupation and enjoyment of, inter alia, the Garden. However, the DMC did not specify or designate the Garden by reference to the Garden Plan.  The Garden Plan was first used by the Poon’s Assignment to show (but not to delineate) the Garden.  Mr Chong sought to argue that the Garden did not include the Strip.

66.  Mr Chong submitted in para 34 of his closing submissions that:-

“To use the words of Lord Hoffmann for the correct approach, the construction of a document with a plan annexed for identification purpose is not a game with words and drawings. Regard must have to the factual and legal background against which it was concluded and the practical objects which it was intended to achieve.” (Original underline)

67.  The words of Lord Hoffmann referred to by Mr Chong were the following passage of his Lordship’s judgment in Jumbo King Ltd v Faithful Properties Ltd & Ors [1999] 3 HKLRD 757 at 773F-774B:-

“The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve. Quite often this exercise will lead to the conclusion that although there is no reasonable doubt about what the parties meant, they have not expressed themselves very well. Their language may sometimes be careless and they may have said things which, if taken literally, mean something different from what they obviously intended. In ordinary life people often express themselves infelicitously without leaving any doubt about what they meant. Of course in serious utterances such as legal documents, in which people may be supposed to have chosen their words with care, one does not readily accept that they have used the wrong words. If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other. The court is not privy to the negotiation of the agreement – evidence of such negotiations is inadmissible – and has no way of knowing whether a clause which appears to have an onerous effect was a quid pro quo for some other concession. Or one of the parties may simply have made a bad bargain. The only escape from the language is an action for rectification, in which the previous negotiations can be examined. But the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean. Therefore, if in spite of linguistic problems the meaning is clear, it is that meaning which must prevail.”

68.  Mr Chong submitted that the factual background against which the D’s Assignment and the DMC were concluded and the practical objects which they were intended to achieve were set out in the evidence of the defendant and the defence witnesses which was basically unchallenged.

69.  The evidence of the defendant referred to by Mr Chong was set out in para 5 of the defendant’s witness statement as follows:-

“於興建該村屋 [the Building] 前，葉觀發 [Ip]、馮光成 [Fung]、 潘惠蘭 [Poon] 和本人均一致同意在地下單位正門南面的外牆設置一個供該村屋地下及三樓單位公用的水錶箱 [the Water Meters Cabinet] ，及於正門東面的外牆設置一個供地下及三樓單位公用的石屎石油氣樽槽架 [the LPG Rack]，並以公用水錶箱和公用石油氣槽架作為東、南面分界〔〝東南面分界〞〕，中間的地方為公用通道，以供三樓單位使用及通往連接該村屋的公共道路〔〝該通道〞〕[the Passage]。馮光成和潘惠蘭另要求承建商於地下花園設置一道獨立大閘和一道獨立小閘供覆式單位連接該村屋和公共道路。”

70.  Similar evidence was contained in the witness statements of Chan, Ip, Fung and Poon.

71.  Mr Chong submitted that the evidence of the defendant and the defence witnesses clearly showed the common intention and agreement of all the parties that the Strip should be designated as common part and the practical object of the DMC was to implement this common intention and agreement of the parties. In pursuance of their said common intention and agreement, Ip engaged the Surveyor to prepare the Garden Plan which was subsequently annexed to the DMC and the Poon’s Assignment.

72.  Mr Chong pointed out that the evidence of the defendant and the defence witnesses was that during the whole course of construction of the Building, the Strip had already been used by all parties (including construction workers) as a common passageway.

73.  Mr Chong said that after the Building was completed, the Surveyor gave a copy of the Garden Plan to Ip but Ip found that the Yellow Part did not tally with the physical location and area of that commonly intended and agreed by the parties and the entrance according to the Yellow Part would be leading to a death end, ie private land of lot 734A in DD 9, rather than to a public road.  The defendant, Chan and Fung were also shown a copy of the Garden Plan.  All parties acknowledged those discrepancies spotted by Ip.  As all parties reconfirmed their said common intention and agreement and in view of the fact that the Garden Plan was intended for identification purpose only, they decided not to make any correction to the Garden Plan leaving it as it was.  This part of the defendant’s evidence was contained in para 9 of her witness statement which stated that:-

“該村屋 [the Building] 建成後不久，葉觀發 [Ip] 與我和馮光成 [Fung] 會面，向我們展示了公契圖則 [the Garden Plan]。他說公契圖則上以黄色顯示的〝路權〞[the Right of Way] 部份似乎與該通道 [the Passage] 的位置和範圍不符，我和馮光成看過後也同意他的說法。因此，我們四人包括潘惠蘭 [Poon] 均確認該通道的範圍應為東南面分界，葉觀發、馮光成和潘惠蘭並同意及承諾以東南面分界為該通道範圍及供三樓單位使用進出該村屋。”

74.  Similar evidence was contained in the witness statements of Chan, Fung and Poon.

75.  Ip in para 8 of his witness statement stated that:-

“該村屋 [the Building] 建成後不久，TANG SZE KIN [the Surveyor] 測量師將已擬備妥當的公契圖則 [the Garden Plan] 交付給我。我留意到在公契圖則上以黄色顯示的〝路權〞[the Right of Way] 部份，似乎與該通道 [the Passage] 的位置和範圍不符，我將圖則交予馮光成 [Fung] 和馮慧琴 [the defendant] 查看，他們也同意黄色部份似乎未有準確顯示該通道的實際位置和範圍。因此，馮光成、潘惠蘭 [Poon]、馮慧琴和我均一致確認該通道的範圍為東南面分界，馮光成、潘惠蘭和我亦同意及承諾三樓單位有權使用該通道進出該村屋和連接公共道路。基於上述理解、協議和承諾，我決定不用更改公契圖則。”

76.  Mr Chong further said that when the Boundary Wall was built in about August 2000, in further pursuance of their said common intention and agreement, the Metal Gates and the Front Gate were installed.  When the building of the Boundary Wall and the installation of the gates were completed in November 2000, Ip also acknowledged that the Front Gates and the Metal Gates were accurate demarcations of the Strip.  Since then the defendant and her family had been using, occupying and enjoying the Strip without any interruption and interference until the plaintiff and Yeung became co-owners of the Lot in 2011.

77.  Mr Chong submitted that in view of the aforesaid factual and legal background of this case, in particular the said common intention and agreement, the Owner (acting through Ip) had expressly granted to the defendant a contractual quasi-easement over the Strip by designated the Strip a common part.

78.  The defendant pleaded that the Garden Plan was neither accurate nor precise and was erroneous.  Mr Chong submitted that the court should take into consideration the aforesaid factual and legal background in interpreting the DCM including the Garden Plan.

79.  Mr Tang submitted that section 4(1) of the Conveyancing and Property Ordinance (Cap 219) (the “CPO”) provided that a legal estate in land might be created only by deed and according to section 2 of the CPO easement was one of the legal estates that might be created only by deed.

80.  Mr Tang submitted that the oral agreement alleged in the evidence of the defendant and the defence witnesses was inadmissible under the parol evidence rule for interpreting the DMC.

81.  As the learned editors stated in Phipson on Evidence (18^th Ed, 2013) at para 42-12:-

“When a transaction has been reduced to, or recorded in writing either by requirement of law, or agreement of the parties, extrinsic evidence is, in general, inadmissible to contradict, vary, add to or subtract from the terms of the documents.”

82.  In reply to Mr Chong’s contention that the court should give effect to the alleged “common intention and agreement” of the parties (ie Ip, the defendant, Poon and Fung) in interpreting the DMC, Mr Tang submitted that it was the “intention” of what the parties intended the terms of the contract to mean that mattered but not the “intention” of what deep inside their mind they wanted the subject matter of the contract to become of.  He referred to the Jumbo King case (supra) when Litton PJ stated at p770 H-I:-

“An agreement to sell and convey an interest in land is, like any other contract, a matter for the parties themselves. Generally speaking, the court will give effect to the parties’ intentions as evidenced by their agreement. If the agreement is clear, the parties would generally not resort to litigation.”

83.  Mr Tang also referred to The Interpretation of Contracts (5^th Ed) by Sir Kim Lewison in support of his aforesaid contention.  In para 2.05 of the book the learned author stated that:-

“2.05 For the purpose of the interpretation of contracts, the intention of the parties is the meaning of the contract. There is no intention independent of that meaning.

Part of the confusion into which the process of interpretation has fallen stems from the differing meanings given to the word “intention” both by advocates and, on occasion, judges. In Great Western Railway v Bristol Corp Lord Shaw said:-

“… one hears much use made of the word ‘intention’, but courts of law when on the work of interpretation are not engaged upon the task or study of what parties intended to do, but of what the language which they employed showed that they did; in other words, they are not constructing a contract on the lines of what may be thought to have been what the parties intended, but they are construing the words and expressions used by the parties themselves.  What do these mean?  That when ascertained is the meaning to be given effect to, the meaning of the contract by which the parties are bound.  The suggestion of an intention of parties different from the meaning conveyed by the words employed is no part of interpretation, but is mere confusion.”

Later in his speech he said:-

“… experience has shown that the attempt seems to be inevitable in the pleader’s mind … to confuse evidence of the writer’s intention as such, with the intention conveyed by the words which he employed.  The latter alone is legitimate.”

Nowadays the “intention of the parties” is equated with the meaning of the contract. As the High Court of Australia said in Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd:-

“References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement.  The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean.”

……

So also in IRC v Raphael, Lord Wright said:-

“It must be remembered at the outset that the court, while it seeks to give effect to the intention of the parties, must give effect to that intention as expressed, that is, it must ascertain the meaning of the words actually used.  There is often an ambiguity in the use of the word ‘intention’ in cases of this character.  The word is constantly used as meaning motive, purpose, desire, as a state of mind, and not as meaning intention as expressed.”

……

Moreover, it must not be forgotten that many contracts have effect upon persons other than the original contracting parties.  …  Hence the court is right to insist that the intention must be made clear by the words of the contract read in the light of the admissible background.”

84.  According to the evidence of the defendant and the defence witnesses, Ip and the defendant knew very well that the Right of Way showed on the Garden Plan was different from the Strip which they said was their intended right of way.  Their evidence was that for some reasons they allowed the inaccurate plan to be annexed to the DMC.  Under such factual background, I do not see how the Garden Plan can be interpreted to have the Right of Way to include the Disputed Land when the contracting parties in their evidence admitted that their understanding was that it did not.

85.  The evidence of the defendant and the defence witnesses was that they had agreed that the defendant would have right of way over the Strip but this was not reflected in the Garden Plan.  They agreed to leave the Garden Plan as it was and relied on their mutual “agreement and promise” (同意及承諾).  What was the legal effect of such mutual agreement and promise would be considered later in this judgment, but for sure a reasonable person would not have understood the Right of Way expressed by the Garden Plan to include the Disputed Land.  The original contracting parties did not have such understanding.  Their understanding was that the Right of Way expressed by the Garden Plan did not include the Disputed Land.  I do not interpret the Garden Plan differently.

86.  Mr Chong urged me not to rely on the Garden Plan in determining the area of the Right of Way referred to in clause 2(a) of the DMC as clause 2(a) only referred to the Right of Way being showed on the Garden Plan for identification purpose and not for the purpose of delineating the Right of Way.

87.  Mr Tang referred me to Green Park Properties Ltd v Dorku Ltd [2000] 4 HKC 538 when Le Pichon JA stated at 546H-I that:-

“It is clear from the passage from Emmet on Title (19^th Ed) para 17.012 cited in the judgment [the judgment of the lower court in that case] that where a plan is ‘for identification purposes only’ it may still be looked to for elucidation but not contradiction of, the verbal description.”

88.  The verbal description of the Right of Way in the DMC was set out in clause 2(a) of the DMC.  It referred to the Garden Plan.  I agree with Mr Tang that the court might look to the Garden Plan for elucidation.  The Garden Plan only showed the Yellow Part as the Right of Way.  It did not show that the Disputed Land was also part of the Right of Way.

89.  Mr Chong contended that the Strip including the Disputed Land was designated as common part by the Owner.  My above analysis do not find in his favour.  I also find support for my above analysis when I looked into the boundary of the Garden assigned to Poon.  The Garden Plan was annexed to both the DMC and the Poon’s Assignment.  When the Garden Plan was referred to in the Poon’s Assignment, although the words “more particularly delineated on the plan” were not used, it was not qualified by the words “for the purpose of identification only”.  The verbal description of the Garden in the Poon’s Assignment was: which said Garden was shown on the Garden Plan annexed hereto and thereon coloured green.

90.  The Garden Plan was a plan drawn to scale by a registered professional surveyor who was also a chartered land surveyor, for the purpose of annexing to title documents of the Lot and the Building.  I agree with Mr Tang that the court was entitled to look to the Garden Plan for elucidation as to the boundary of the Garden.

91.  When Mr Chong tried to persuade me not to rely on the Garden Plan to determine whether the Strip formed part of the Garden, he could not have seriously disputed that the Disputed Land fell within the area coloured green on the Garden Plan.  The area coloured green on the Garden Plan had been designated as the Garden in the Poon’s Assignment.

92.  I find that the Disputed Land formed part of the Garden.  In respective of the Yellow Part, Mr Tang submitted in his closing submissions that:-

“61. But the plan [the Garden Plan] is titled “GARDEN AND RIGHT OF WAY IN LOT NO 1653 IN D D 9” and the circled “Y” is denoted as “RIGHT OF WAY”.

62. If the plan is meant to assign only the green-colored part as the Garden and leave other unroofed area as common part, all the drafter needed to do is to leave the yellow-colored part blank instead of coloring it in yellow.  This is what the drafter did in the previous plan at [C246].

63. And if the drafter intended that part to be a common part but colored it just for easy contrast, he would have labeled it “common part”.  But he, twice, labeled it “RIGHT OF WAY”.

64. Anyone with experience in multi-storey building management understands that common part is meant to be used by all owners.  Elevator lobby, for example, is a typical of such common part.  Each and every owner has the right to use such lobby.  No right of way needs to be granted.

65. Why, then, did the drafter specify not just once but twice the right of way?

66. A right of way, as we all know, generally refers to a right over another’s land.  It is P’s submission that the repeated emphasis on “right of way” indicates that the yellow-colored part was meant to be assigned to a particular owner’s exclusive use.  Exactly because the drafter envisions the yellow-colored part was to become someone’s land, he or she must specify the right of way so that other owners may to [sic] use such yellow-colored part for ingress and egress.

67. In this sense, the yellow-coloring does not mean to displace the green-coloring. The yellow coloring is meant to superimpose on the green-coloring such as to indicate that, though assigned, that yellow-colored part is subject to a right of way for other owners.” (Original emphasis)

93.  In the D’s Assignment, the Owner “Excepting and Reserving unto the Vendor [the Owner] and the other owner or owners for the time being of the other undivided parts or shares of and in the Lot and the Building the sole and exclusive right and privilege to hold use occupy and enjoy the other parts of the Lot [which included the Yellow Part] and the Building save and except the Property hereby assigned [ie the 2/F Properties].”  In such case, exclusive possession of the Yellow Part (subject to the Right of Way granted by the DMC) was reserved by the Owner for owners of the other undivided shares which had subsequently been transferred to Poon pursuant to the Poon’s Assignment.

94.  As explained by Litton PJ (as he then was) in the Jumbo King case (supra) at p 767C-D that:-

“… Prima facie, the co-owners of land have the right of possession in common to every part of the land. In relation to a multi-storied building there cannot be a proprietary right to the exclusive possession of part of the building except as an incident of common ownership in the land and building.” (Original italic)

95.  After the Owner transferred the two undivided shares in the Lot and the Building to Poon, the Owner retained no common ownership in the Lot and the Building for the right to exclusive possession of any part of the building to hang on. 

96.  Section 17 of the CPO provides that:-

“17. Unless the contrary intention is expressed in the assignment, an assignment shall operate to assign all the estate, right and interest in the land assigned which the assignor has in that land and which he has the power to assign.”

97.  As stated above, the Owner had reserved the exclusive possession of the Yellow Part (subject to the Right of Way) for the owners of the two undivided shares then held by the Owner.  The Owner certainly had the power to assign such estate, right and interest to Poon.  The Poon’s Assignment did not express any contrary intention that the Owner did not intend to assign the exclusive possession of the Yellow Part (subject to the Right of Way) to Poon.  I agree with Mr Tang that exclusive possession of the Yellow Part (subject to the Right of Way) was assigned to Poon, the predecessor of the plaintiff.  Such estate, right and interest had vested in the plaintiff through the chain of title.

98.  Mr Chong submitted in his closing submissions that:-

“32. The plaintiff has approached the issue (far too simply) by taking the portion coloured yellow in the Garden Plan as the true and accurate area of the Right of Way disregarding or irrespective of the physical features on the ground (more particularly the Main Gate, the Two Gates, the small tress [sic] and the flower bed) and hence without any attempt to reconcile the Garden Plan with the physical features on the ground; and more importantly without regard to other clauses of the DMC, including clause 2(a) thereof.” (Original underline)

99.  The DMC was executed on 14 June 2000 and the Poon’s Assignment was executed on 28 July 2000.  The Metal Gates and the Front Gate were not installed until November 2000.  According to the evidence of the defendant, the decision to build the Boundary Wall, the Metal Gates and the Front Gate was made after the Poon’s Assignment.  In para 14 of her witness statement, the defendant stated that:-

“在我和潘惠蘭 [Poon] 分別購入三樓單位和覆式單位後，我們同意共同出資在村屋 [the Building] 四周建造一幅圍牆 [the Boundary Wall]，及在覆式單位的花園建造以下閘門:-

(1) 一道大閘和一道小閘，供覆式單位進出該村屋和連接公共道路的小徑；

(2) 一道前閘 [the Front Gate] 和兩道側閘 [the Metal Gates]，以清楚劃出東南面分界，中間的地方為公契 [the DMC] 內提及的〝入口大堂和公用地方〞，即該通道 [the Passage] 的範圍，供三樓單位進出該村屋和連接公共道路的小徑。

葉觀發 [Ip] 亦向我和潘惠蘭確認了圍牆的準確位置和範圍。”

100.  As the idea of installing the Metal Gates and the Front Gate did not emerge until after execution of the DMC and the Poon’s Assignment to which the Garden Plan was annexed and it was the idea of the defendant and Poon to install these gates, I do not see how these gates would assist interpretation of the Garden Plan which was arranged by Ip prior to the installation of the gates.

101.  I shall also discuss here the small tree and the flower bed referred to in Mr Chong’s submissions so that I do not need to repeat myself when these issues are raised again in the later part of this judgment.

102.  The defendant’s case was that there were a small tree and a flower bed at the exit of the Yellow Part adjoining the boundary of the Lot blocking the exit from the Yellow Part to outside the Lot.  In para 17(2) of her witness statement, the defendant stated that:-

“黄色部份 [the Yellow Part] 進入734A號地段的入口已被一座花床及一棵樹完全阻擋，該花床是於興建該村屋 [the Building] 時一併建造，該棵樹則於興建該村屋前已存在該處；”

103.  The same evidence was stated in the witness statement of Chan and Ip. Yeung in his witness statement stated that Chan had admitted in front of Kong that the small tree was planted by him.  This was denied by both Chan and Kong.  Kong had no interest in this dispute.  I see no reason for Kong to tell lie on this matter.  I accept Kong’s evidence and reject Yeung’s evidence on this issue.  According to the evidence of the defendant as well as Poon and Fung, the builder who built the Building was engaged by the defendant and Poon through Fung.  According to the witness statements of the defendant and Chan, the flower bed was built together with the Building.  In such case, the flower bed was built by the defendant and Poon.  Chan in his evidence at the trial tried to retract and not to confirm that the flower bed was built by the defendant and Poon.  When Chan was cross-examined, he said that it was not a flower bed but a piece of small grassland with grass and tree belonged to others.  I do not accept Chan’s changing evidence.  I find that the flower bed was built by the defendant and Poon.

104.  No explanation was provided as to why a flower bed was built at that location. The defendant said at the trial that she could not recall who proposed to build the flower bed.  I need not speculate on the reasons for building the flower bed there.  It might be built to mark the exit of the Yellow Part.  It might be built for other reasons.  Suffice it to say that bearing in mind that the Boundary Wall was not there when the Building was built, a flower bed at that location in June 2000 would not obstruct the ingress to and egress from the Stair.

105.  Although I had not conducted a site visit, photographs of the small tree had been annexed to the witness statement of Yeung (pp 86-87 of Bundle I).  Mr Tang pointed out that the defendant had told the court at the trial that the “tree” was “very small” back then and was so “big” only recently.  From the photographs produced which Yeung said were taken by him in early 2012 (although the date on the photographs was 11 November 2010), I could see that the tree was not a big one (Mr Chong also described that as “the small tree”).  I could imagine that it was much smaller more than 10 years ago.  I accept Yeung’s evidence on the date when these photographs were taken as he and the plaintiff did not become owners of their properties until August 2011.  I do not see that such a small tree back in 2000 would constitute any obstruction to the Right of Way bearing in mind that the Boundary Wall was not there when the DMC and the Poon’s Assignment were executed.

106.  I find that the plaintiff had exclusive possession of the Strip including the Yellow Part only subject to the Right of Way stipulated in the DMC.  In the premise, I find that the Strip including the Disputed Land was not a common area.

Contractual quasi-easement by express term

107.  The primary contention of the defendant on contractual quasi-easement was that the Owner (acting through Ip) expressly granted to the defendant a contractual quasi-easement over the Strip by designated the Strip as a common part.  I have found that the Strip was not a common area.  I find that exclusive possession of the Strip had been allotted to Poon, the predecessor of the plaintiff.

108.  Even if the Strip was not a common area, the Owner who had retained the exclusive possession of Strip, which included the Disputed Land, under the D’s Assignment might still grant a right of way to the defendant over the Disputed Land by expressed term or implied term of a contract.

109.  The evidence of the defendant and the defence witnesses alleged that the Owner (acting through Ip) had expressly granted to the defendant a right of way over the Disputed Land (there being no dispute that the defendant was entitled to right of way over the Yellow Part).  According to the defendant and the defence witnesses, the alleged agreement was an oral agreement agreed between the parties (ie Ip, the defendant, Poon and Fung) before the construction of the Building.  Such oral agreement was confirmed by the parties prior to execution of the DMC.

110.  Mr Chong submitted both in opening and closing that in relying on the aforesaid oral agreement, he was not attempting to adduce evidence on the parties’ subjective intention.  He submitted that the aforesaid evidence was admissible as factual background for the purpose of construing the relevant documents (ie the D’s Assignment and the DMC) and giving effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean.  He relied on the speech of Sir Ivor Richardson NPJ in Ying Ho Co Ltd & Ors v Secretary for Justice [2005] 1 HKLRD 135 to support his contention.  In his said speech Sir Ivor Richardson NPJ stated that the classic statement on the applicable principles of interpretation of contractual documents was that of Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896.   In the Investors Compensation Scheme case, when Lord Hoffmann was summarising the principles for interpretation of contractual documents, his Lordship stated at p 913A-B that:-

“The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification.”

111.  This is not an action for rectification by the defendant.  The previous negotiations between the defendant and Ip and their subjective intention were not admissible for interpretation of the DMC.  However, I shall nevertheless consider whether there was an expressed grant of quasi-easement as claimed by the defendant.  If so, whether it would bind the plaintiff.

112.  According to the aforesaid evidence of the defendant and the defence witnesses, the Strip demarcated at the two ends by the Water Meters Cabinet and the LPG Rack was the agreed right of way area granted by the Owner to the defendant.  Such evidence was not challenged by the plaintiff.  In fact, the plaintiff was in no position to challenge such evidence as she had not yet entered the scene in 2000 when the alleged agreement was agreed.  However, even with such evidence not being challenged, I am still not prepared to accept the same.  Ip’s evidence was that he had engaged Tang Sze Kin, a registered professional surveyor and a chartered land surveyor to prepare the Garden Plan to show the agreed right of way as aforesaid in the alleged oral agreement. The evidence was that the Garden Plan prepared by the Surveyor turned out to be an inaccurate one.  The error was not a minor error.  Mr Chong pointed out in his closing submissions that the area of the Yellow Part was about 14.5ft² whereas the area of the Strip was about 94.9ft².  Accordingly, the area showed by the Surveyor on the Garden Plan was less than 16% of the area which Ip had instructed him to mark.  I noted that the Garden Plan was not an out of scale sketch.  It was a scaled plan prepared by a chartered surveyor for annexing to title documents.  It was hard to imagine a professional chartered surveyor would make such serious error especially when the area was supposed to be demarcated by clear landmarks, ie the Water Meters Cabinet and the LPG Rack.  There were a lot to be explained by the Surveyor.  One would expect the defendant to call the Surveyor to attend the trial to explain to the court how he would have made such a serious mistake.  However, the defendant did not call the Surveyor to give evidence.

113.  The Court of Appeal in Li Sau Keung v Maxcredit Engineering Ltd & Anor [2004] 1 HKC 434 referring to the judgment of Newton and Norris JJ in O’Donnell v Reichard [1975] VR 916 held that where a person without explanation failed to call as a witness a person who he might reasonably be expected to call, it was open to the court to infer that that person’s evidence would not have helped that party’s case.  If the court drew that inference, then it might properly take it into account against the party in question in deciding whether to accept any particular evidence, which had in fact been given, either for or against that party, and which related to a matter with respect to which the person not called as a witness could have spoken.

114.  I further noted that Ip’s evidence was that he spotted the error of the Surveyor after he received the Garden Plan and before the execution of the DMC.  Ip could simply ask the Surveyor to amend the Garden Plan before he gave it to the defendant.  As it was error made by the Surveyor, I should expect that it would not cost Ip anything to amend the Garden Plan.  Instead of asking the Surveyor to amend the Garden Plan right away, Ip chose to give the inaccurate plan to Fung and the defendant for their consideration.  This was incredible.

115.  It was even more incredible for the defendant, Fung and Poon to agree to leave the Garden Plan unamended (knowing that it contained a substantial error) to be annexed to the title documents of their properties which cost each of them about $2 million back in 2000 and to contend with a mutual agreement and promise.  The Garden Plan was dated 22 December 1999.  The DMC was executed on 14 June 2000.  There was more than five months in between.  The parties had ample times to request the Surveyor to ratify his error on the Garden Plan. This was not done.  The explanation given was hardly convincing.

116.  Furthermore, if the parties were aware of the Garden Plan being inaccurate, there was no reason why Ip and Poon would still annex the inaccurate plan to the Poon’s Assignment which was executed more than one month after the DMC without first amending the plan or stating clearly in the verbal description of the Garden in the assignment to exclude the Strip.

117.  I do not accept the evidence of the defendant and the defence witnesses on the alleged agreement of granting right of way over the whole of the Strip and the alleged agreement of not amending the Garden Plan.

118.  As I do not accept the aforesaid evidence of the defendant and the defence witnesses, the defendant’s contention of express grant of contractual quasi-easement fails.

Non-derogation from grant

119.  Mr Chong submitted that the principle of non-derogation from grant also applied in this case.  Mr Chong contended that the Owner and his successors-in-title including the plaintiff could not grant or agree to grant the 2/F Properties to the defendant and at the same time deny to his grantee what was at the time of the grant obviously necessary for its reasonable enjoyment.  In Canon Kabushiki Kaisha v Green Cartridge Co (Hong Kong) Ltd [1997] AC 728 Lord Hoffmann stated at 736H-737A that:-

“The principle of non-derogation is however based upon the presumed intention of the parties. The rights derived from the principle must, as Bowen LJ said in Birmingham, Dudley and District Banking Co v Ross (1888) 38 Ch D 295, 313, have a consensual origin. It is the conveyancing equivalent of an implied term derived, in a broad sense, from the construction of the transaction into which the partiers have entered.”

120.  I have ruled against the express agreement alleged by the defendant.  I shall now consider whether there was an implied term to grant a right of way over the Disputed Land to the defendant.  There is a close connection, indeed a very substantial degree of overlap, between the obligation not to derogate from grant and a normal implied term in a contract. (Per Neuberger J in Platt v London Underground Ltd [2001] 2 EGLR 121 at 122D)

Contractual quasi-easement by implied term

121.  In order that a term may be implied, there has to be a compelling reason for deeming that term to form part of the contract.  It is not enough for the court to conclude that such a term would have made the contract more reasonable; terms will be implied not in order to make for the parties a contract which the court considers fair, but only to make effective the contract which the parties have made for themselves.  (Per Lord Lowry in Hughes and anor v Greenwich London Borough Council [1994] 1 AC 170 at 177)

122.  In Rank Profits Industries Ltd v Secretary for Justice [2009] 1 HKLRD 194, the Court of Appeal endorsed the view expressed by Nicholls LJ (as he then was) in Johnston & Sons Ltd v Holland [1988] 1 EGLR 364 at 267M that the exercise of determining the extent of the implied obligation not to derogate from grant involved identifying what obligations, if any, on the part of the grantor could fairly be regarded as necessarily implicit, having regard to the particular purpose of the transaction when considered in the light of circumstances subsisting at the time the transaction was entered into.  Tang V-P (as he then was) went on to say that:-

“24. The principle of non-derogation from grant also embodies a rule of common honesty, but Mr Neoh [counsel for the plaintiff grantee] accepted and I agree that whilst the concept of common honesty might help to identify what obligations, if any, on the part of the grantor can fairly be regarded as necessarily implicit, in ascertaining what is necessarily implicit, one must be guided by the test which regulates the implication of contractual terms, namely necessity.”

123.  The question here was whether in the light of circumstances subsisting at the time of the transaction, it could fairly be regarded as necessarily implicit that a right of way over the Disputed Land had been granted by the Owner (acting through Ip).

124.  Mr Tang submitted that the court would decline to imply any quasi-easement if the parties had already dealt with the relevant matter in the contract.  He referred to para 7.07 of The Interpretation of Contract (supra) which stated that:-

“An express term in a contract excludes the possibility of implying any term dealing with the same subject-matter as the express term.”

125.  Mr Tang further submitted that to imply against the express words of the contract was to rewrite the contract.  He referred me to the Ying Ho Co Ltd case (supra) when the Court of Final Appeal stated at p230B that:-

“… a term which is in conflict with the express terms of the text may never be implied and, if that requirement is met, the term to be implied is confined to what is strictly necessary, not what might seem reasonable. The focus is on the minimum intrusion on what the contract states, which is required to give effect to the presumed intent of the parties, and does not allow rewriting of the contract.”

126.  Mr Tang submitted that given the express term on the DMC Right of Way, no easement regarding passage to and fro the Stair and the outside of the Lot could be implied.

127.  A right of way over the Disputed Land was not in conflict of a right of way over the Yellow Part.  The two were not contradicting and not inconsistent.  However, I agree that the court would be slow to find an implied term relating to the same subject matter which had been dealt with by an express term.  Mr Chong had rightly pointed out that the principle of non-derogation was based upon the presumed intention of the parties.  Bowen LJ stated in Myers v Catterson [1889] 43 Ch D 470 at 481 that in relation to the derogation from grant principle, one should give effect to what he called “the obvious intention of the parties, so as to give to the transaction between them that minimum of efficacy and value, which, upon any view of the case, it must have been their common intention that it should have.”

128.  The aforesaid words of Bowen LJ apply equally to an implied term in a contract.  To imply a term into a contract, the court has to be satisfied that the term represents the unexpressed obvious intention of the contracting parties as the court will not and shall not rewrite the contract for the parties.  If it was the intention of the Owner and the defendant to grant a right of way to the defendant over the Disputed Land when there was in the DMC an express term to deal with the Right of Way by reference to the Yellow Part, there had to have good reasons to explain why the express term did not cover such intention of the parties.  The explanation put forward by the defendant and the defence witnesses had been rejected by me and there was no other satisfactory explanation offered.  I am not persuaded that there was such an implied term.

129.  Furthermore, back in June 2000, the Lot was not surrounded by the Boundary Wall and there was a right of way granted over the Yellow Part which provided exit for the defendant from the Lot.  Borrowing the words of Lord Lowry, I do not find “a compelling reason for deeming that term (right of way over the Disputed Land) to form part of the contract”.  (See Hughes v Greenwich London Borough Council (supra) at p 177)

130.  Mr Chong submitted that the intention of the parties to designate the Strip as a common part was to give business efficacy to the transaction between the parties otherwise: (1) the 2/F Properties would have been land-locked; (2) the owners, occupiers and users of the 2/F Properties would have had no means of ingressing thereto and egressing therefrom; and (3) they would not have had any space to house the LPG drums, water meters and the foul water manhole.

131.  Mr Chong submitted that without the right of way on the Strip, the 2/F Properties would be “land-locked”.  According to the D’s Plan, the Lot itself was land-locked.  It was surrounded by Lots 729 RP, 733 RP, 733 SA, 734 SA, 731 SA, 729 SB and 732 SA.  With a right of way over the Strip would not make the 2/F Properties less “land-locked” than with the right of way over the Yellow Part only.  From the D’s Plan, it could be seen that the owners of Lot 734 SA, 733 SA and 733 RP had not built to the boundary of their respective lots leaving a footpath running through these lots presumably to the public road. The Yellow Part had its exit to the footpath at Lot 734 SA whereas the Front Gate provided an exit to the footpath at Lot 733 SA.  This “land-locked” point did not assist the defendant.

132.  The LPG Rack, the Water Meters Cabinet and the foul water manhole (assuming that the manhole in the Disputed Land was a foul water manhole) were common parts of the Lot.  Clause 26 of the DMC provided that the owners of the Lot should have access to and be entitled to use various facilities for the general service of the Building.  Clauses 3(b) and 26 of the DMC further provided that the owners should be liable to pay his due proportion of repair cost for the common facilities.  As the LPG Rack, the Water Meters Cabinet and the foul water manhole were common facilities serving the Building, the defendant was allowed access to those common facilities by the DMC.  However, this did not mean that access in the form of a right of way over the Disputed Land had to be granted before the defendant might use these common facilities provided that the defendant was not being denied of reasonable access to these common facilities when required.  This was illustrated by the use of the electricity meters for the Building (including that for the 2/F Properties) which were not located within the Strip but at other part of the Garden.  I do not accept the aforesaid contention of Mr Chong.

133.  As I do not find that a right of way over the Disputed Land was implied into the grant to the defendant, Mr Chong’s contention on non-derogation from implied grant fails.

Wheeldon v Burrows sense of quasi-easement

134.  The defendant contended that even if the Owner’s grant to the defendant was not found to have expressly included the quasi-easement right over the Disputed Land, the defendant relied alternatively on Wheeldon v Burrows as the legal basis upon which such quasi-easement over the Disputed Land was recognized and implied into the grant.  Wheeldon v Burrows is another illustration of the principle that a grantor may not derogate from his grant. 

135.  In the Kung Ming Tak Tong case, the Court of Final Appeal explained quasi-easement used in the Wheeldon v Burrows sense as follows:-

“45. Wheeldon v Burrows establishes the legal basis upon which such quasi-easements are recognised and implied into a grant which does not expressly deal with them. It also establishes a stricter rule which requires the grantor expressly to reserve any rights he may seek to exercise in future over the land granted, subject to narrow exceptions. The relevant rules were laid down in this well-known passage from the judgment of Thesiger LJ:-

‘... 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.’

46. An illustration of the implication of an easement under this rule is provided by Maugham J in Borman v Griffith:-

‘... where, as in the present case, two properties belonging to a single owner and about to be granted are separated by a common road, or where a plainly visible road exists over the one for the apparent use of the other, and that road is necessary for the reasonable enjoyment of the property, a right to use the road will pass with the quasi-dominant tenement, unless by the terms of the contract that right is excluded...’

47. As laid down by Thesiger LJ in the passage cited, the court will make the implication where it is clear that a ‘continuous and apparent quasi-easement’ exists which, after severance of the land and creation of the two tenements would be ‘necessary to the reasonable enjoyment of the property granted’….” 

136.  In this case, we are only concerned with the first proposition.  The operation of that proposition in this case was that on the grant to the defendant by the Owner of the Lot and the Building of the 2/F Properties being part of the Lot and the Building as the Owner was then used and enjoyed, there would pass to the defendant all those continuous and apparent easements (ie quasi-easements), or in other words, all those easements which were necessary to the reasonable enjoyment of the 2/F Properties, and which had been and were at the time of the grant used by the Owner for the benefit of the 2/F Properties.

137.  The Court of Final Appeal had pointed out in the Kung Ming Tak Tong case that the court would make the implication where it was clear that a “continuous and apparent quasi-easement” existed which, after severance of the land and creation of the two tenements would be “necessary to the reasonable enjoyment of the property granted”.  The relevant time was the date of grant.  In this case, it was 14 June 2000.

138.  In support of this contention, the defendant and the defence witnesses stated in their evidence that during the construction of the Building, Fung, Poon, Chan, the defendant, Ip and the construction workers were using the Passage (ie the Strip) to access to public road.

139.  Mr Chong submitted in para 54 of his closing submissions that:-

“The Strip is necessary for the enjoyment of Premises III [the 2/F Properties] because without which Premises III would have been land-locked. The narrow Strip measures about 8.816m² (or 94.9ft²) and is only about 8% of the Garden in terms of area. It is submitted the enjoyment of this small piece of land is reasonable for, apart from serving as a passageway, also housing the water meters cabinet, the concrete LPG drums rack and the foul water manhole. Practically, it is submitted, the dimensions of the Strip are also reasonable for serving its purposes, taking into account also the fact that all gates are opening inwards into the Strip.” (Original underline)

140.  Mr Tang submitted in his opening submissions that:-

“52. In other words, D has to show that, at the time when IYC [Ip] transferred the 2/F to her on Jun 14, 2000 and NOT any other date, IYC had been using the entire Strip as right of way continuously and apparently and such use was reasonably necessary for D to use the 2/F.

53. But there is no dispute that D and PWL [Poon] were the first residents moving into the Building. IYC or any others has never lived there before sales to D and PWL and anyhow there had been only a couple of months between the completion of the Building and the assignment of 2/F to D. How IYC could be said to have used the Strip “continuously and apparently” is hard to imagine.

54. More importantly, it’s D’s own case that fencing walls and the gates were built ONLY in Nov 2000, FIVE months after the assignment of 2/F to her. Before the fencing walls and gates were set up, IYC, being owner of both 2/F and G/F, could gain access to and fro the outside of the Lot and the Staircase’s exit on G/F in any way he wants unbound by any physical barriers.

55. How, in such circumstances, IYC (or anyone else) could use the Strip as right of way before June 14, 2000 is totally unfathomable.” (Original underline)

141.  I agree with the observation of Mr Tang.  I do not see any reason why the Strip would be designated as the passage to access to the 2/F Properties prior to 14 June 2000 when the Boundary Wall was not there and the Lot could be accessed from all directions.  Such evidence was incredible.

142.  I have dealt with the “land-locked” issue above and shall not repeat myself here.  (See para 131 above)  Suffice it to say that designating the Disputed Land as common part or granting a right of way over the Disputed Land would not make the 2/F Properties less “land-locked” than without.  The Yellow Part had provided an exit from the Lot for the owners, occupiers and users of the 2/F Properties. 

143.  As could be seen from the D’s Plan, a flower bed was located at the exit of the Yellow Part on Lot 734 SA.  I had dealt with the issues of the flower bed and the small tree at the earlier part of the judgment and do not propose to repeat myself.  (See paras 101 to 105 above)  Suffice it to say that the flower bed was not there before the Building was built (it was built by the defendant and Poon) and the small tree in 2000 would not have the effect of blocking the exit from the Yellow Part.

144.  I find that the defendant has failed to prove on balance of probabilities that there was continuous and apparent easements on the Disputed Land used and enjoyed by the Owner as at 14 June 2000.  The defendant’s claim of quasi-easement in the Wheeldon v Burrows sense also fails.

Estoppel

145.  Mr Chong submitted in para 47 of his closing submissions that:-

“… The Defendant acted upon the said common intention and agreement [see paras 68 to 75 above] and incurred (to her detriment) costs in building the boundary walls and installing the gates. All predecessors-in-title of the Plaintiff acted accordingly, treated the Strip as a common part and took their title subject to the quasi-easement right over the Strip. The portion coloured yellow in the Garden Plan was never treated as an accurate or precise representation of the Strip by all previous co-owners (until the Plaintiff came into picture in August 2011). In all the circumstances, the Plaintiff as a successor-in-title of the first owner is estopped from claiming that such express grant of quasi-easement was restricted to the portion coloured yellow in the Garden Plan. …” (Original underline)

146.  Mr Tang submitted that estoppel had to be expressly pleaded.  He further pointed out that the allegation that the defendant did spend money on the Metal Gates or the Boundary Wall was also unpleaded but only mentioned in the defendant’s witness statement.  He submitted that in any event the Metal Gates would have been erected.  It was just a matter of whether alongside the Yellow Part or alongside the Strip and the Boundary Wall had nothing to do with the area of the Right of Way.

147.  The learned editors of Hong Kong Civil Procedure 2013 Vol 1 stated at para 18/8/11 that:-

“Estoppel must be specifically pleaded, unless there is no opportunity to do so (Coppinger v Norton [1902] 2 Ir R 241).”

148.  In Wing Hang Bank Ltd v Crystal Jet International Ltd & Ors [2005] 2 HKLRD 795 Ma CJHC (as he then was) reiterated the following basic principles about pleadings at 799:-

“(1) The purpose of pleadings is fairly and precisely to inform the other side of the stance of the pleading party so that proper preparation is made possible, and time and effort are not expended unnecessarily on other issues. The passage at p297 para 18/12/1 of Hong Kong Civil Procedure 2004, Vol 1 sets out the rationale for proper pleadings.

(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be “slipped-in” when evidence is being given in the hope that the other side is not sufficiently alert to object. Much testimony given in the course of a trial may in truth relate to a number of possible aspects or may simply be background information. Obviously, counsel must be astute to object when necessary but the primary responsibility of ensuring that any issue is properly before the Court is on the party seeking to advance that issue. He must do so clearly and not ambiguously, and the usual way of doing so is through the pleadings. Care must be taken to plead issues clearly, and not draft pleadings either vaguely or ambiguously perhaps in the hope that the other side might not readily or easily understand a party’s real case. While vaguely or ambiguously drawn pleadings may enable a party to escape a strike-out application (since striking out is only for plain and obvious cases), this is not to say that where a court has to decide whether or not an issue is to be permitted to be run, it will smile kindly on such types of pleading.

(3) On appeal, it will be extremely rare for the Court of Appeal to allow unpleaded issues of fact to be run for the first time.  Save in exceptional circumstances (such as where documents can safely be assumed to speak for themselves), the Court will often not be in a position to take the view confidently that the other side has not been prejudiced.”

149.  His Lordship further pointed out at p 800 that:-

“8. What is set out above as representing acceptable practice will be all the more emphasized when the civil justice reforms in Hong Kong take shape. The object is not to invite prolixity in pleadings but to achieve what has always been the position: to fairly inform the other side and the Court of a party’s case, identifying the issues and the true extent of the dispute between the parties.”

150.  It was not the defendant’s case that she had no opportunity to plead estoppel in her defence.  No explanation had been provided for her failure to plead this defence of estoppel.  This action was commenced in March 2012 after the civil justice reforms had been implemented for about three years.  This practice of raising unpleaded defence at the trial shall be discouraged.

151.  The defence of estoppel was not pleaded.  Mr Chong simply “slipped-in” the word “estopped” in his submissions without even telling the court what kind of estoppel the defendant was relying on.  In Snell’s Equity (32^nd Ed, 2010), the learned editors pointed out in para 12-001 at p361 that:-

“Perhaps the principal source of confusion in the modern law of estoppel is that this twenty-first century legal doctrine retains a nomenclature which is based upon an obscure word adapted from pre-fourteenth century Old French (estoupail) for “bung” or “cork”.  Matters are not helped by the fact that operation of “estoppel” differs according to whether the principle arises at common law or in equity and, within equity, according to whether or whether it concerns “property”, or whether it is promissory.  To understand the nature of the modern law of estoppel, it is said to be important to recognise that “there are estoppels and there are estoppels”.  In each instance of estoppel any map through the thicket must eventually require the courts to confront directly the purpose and nature of the particular estoppel under consideration,”

152.  Without pleading the defence of estoppel with particulars, the plaintiff was deprived of a fair chance to respond.  Justice does not permit the defendant to run this defence in the circumstances of this case.

153.  Even if I allow the defendant to run this line of defence, I will in any event reject this contention of Mr Chong as the evidence adduced before me was insufficient to substantiate a plea of estoppel.  Without more, the fact that the defendant might have contributed to the costs of building the Boundary Wall and installing the gates did not necessarily mean that the defendant had acted to her detriment or that it was inequitable or unjust to allow the defendant’s expectation (ie to continue to use the Disputed Land in the way she had been using since November 2000) to be defeated by permitting the plaintiff to enforce her legal right as owner of the G/F Properties.  In considering what detriment had been suffered by the defendant, regard had to be had to the countervailing benefits that she had received. (See Watts & Ready v Storey [1983] CAT 319, July 14, 1983 reported in New Law Journal Vol 134 [1984] at p 631)

154.  I agree with Mr Tang’s submission and see no merits in the defendant’s estoppel defence.

Part performance

155.  In the footnote to para 71 of his closing submissions, Mr Chong stated that if needed be, the defendant would seek to rely on the law relating to “part performance” by virtue of sections 3(2) and 7(d) of the CPO in the event that the common “understanding, agreement and promises” of the parties claimed by the defendant was found not contained in the written document.  He submitted that according to the evidence, the said common “understanding, agreement and promises” were indeed acted upon by the parties, which constituted part performance.

156.  Mr Tang submitted that not only the defence of “part performance” was not pleaded, the alleged oral agreement was also not pleaded.  The alleged oral agreement between the defendant and Ip was only mentioned in the witness statements of the defendant and the defence witnesses.  He further commented that the defendant had neither pleaded nor disclosed in her witness statement the consideration in return for the additional right of way over the Disputed Land.  Mr Tang relied on para 18/12/7 of Hong Kong Civil Procedure 2013 Vol 1 to submit that consideration was a must-plead fact and without that there could be no contract.  Mr Tang further submitted that without any contract, there was nothing to enforce under the equitable doctrine of part performance.

157.  Para 18/12/7 of Hong Kong Civil Procedure 2013 Vol 1 provides that:-

“(6) Consideration – If this is for any agreement not under seal, it is a material fact and must be pleaded, except in the case of negotiable instruments, where it is presumed.”

158.  A party who fails to plead a ground of defence may not be allowed to raise the unpleaded defence at the trial unless there is good explanation for such failure, otherwise the role of pleadings in litigation will be frustrated and if the parties are not bound by their pleadings, trial can easily become unmanageable.  As pointed out above, to put forward unpleaded case at the trial is not a practice which the court shall encourage.  This defence of “part performance” was not pleaded.  Mr Chong again “slipped-in” this defence in his submissions.  In no way the court will smile kindly to this way of putting forward the case of a party.

159.  I agree with Mr Tang that the defendant had failed to plead the consideration in support of the alleged oral agreement and had failed to adduce evidence to prove such consideration.  In the premise, there was no legally valid oral agreement for the doctrine of part performance to rest on. 

160.  As discussed above, I do not accept that there was an agreement as alleged between the Owner (acting through Ip) and the defendant when the D’s Assignment and the DMC were executed in June 2000.  I accepted that there had to be some agreed arrangements between the defendant and Poon for the defendant to use the Disputed Land.  Otherwise, the Metal Gates and the Front Gate would not have been installed at their current positions when the Boundary Wall was built in about November 2000.  However, it was not the defendant’s pleaded case that her right to use the Disputed Land came from an agreement with Poon.

161.  Even if the defendant sought to rely on an oral agreement with Poon, such contention would still fail.  The aforesaid arrangements between the defendant and Poon were not recorded in a written instrument and no consideration for such oral agreement had been pleaded or proved.  Mr Tang’s aforesaid criticism to the alleged oral agreement between the defendant and Ip equally applied.  I reject Mr Chong’s contention relying on part performance.

162.  I am of the view that the arrangements agreed between the defendant and Poon only amounted to a bare licence which was revocable upon reasonable notice and was revoked automatically by transfer of the G/F Properties by Poon in 2005.  The fact that the other predecessors-in-title of the plaintiff allowed the defendant to continue to use the Disputed Land only showed that the bare licence had been extended by the plaintiff’s predecessors.  It would not create any proprietary rights in land in favour of the defendant and would not operate to prevent the plaintiff from exercising her legal right not to further renew the licence upon its revocation on transfer of the G/F Properties to the plaintiff.

163.  The defence relying on “part performance” also fails.

Other issues

164.  Mr Chong in para 71 of his closing submissions submitted that even if (which the defendant did not agree) the quasi-easement was regarded as an (unregistrable) equitable interest, the plaintiff was not a bona fide purchaser without notice of the quasi-easement such that she could take free of the quasi-easement.  Mr Tang contended that an equitable interest could be created only by writing under section 5 of the CPO unless they were constructive/implied/resulting trust or fell within certain limited exceptions.  I agree with Mr Tang.  As I find that the defendant has failed to establish the alleged quasi-easement, I need not deal with further these contentions advanced by the parties.

165.  In para 15 of the amended defence, the defendant pleaded that the Strip had been used by the defendant prior to the plaintiff purchasing the G/F Properties.  The plaintiff had knowledge of such usage and purchased the G/F Properties on an “as is” basis.  Mr Tang submitted that in a sale and purchase agreement of property, the “as is” provision meant that the purchaser accepted the physical condition, such as weariness, water leakage or otherwise lack of maintenance, of the property as the purchaser saw it.  The purchaser could not thereafter go after the vendor for such physical defects or demand the vendor to make good the defect before completion.  It had nothing to do with whether the purchaser was subject to any third party’s interest in the property.  He further submitted that the “as is” provision was a contractual provision between the plaintiff and the plaintiff’s immediate predecessor-in-title only and the defendant could not take advantage out of that contract.  I agree with Mr Tang. 

166.  The parties had in their witness statements took issues on whether the plaintiff had sent letters to the defendant, whether the plaintiff and Yeung had been evading stamp duties and whether they had built illegal structures to their properties.  Other than blackening the other side, these matters were irrelevant to the issues in dispute.  Fortunately, the parties had engaged sensible counsels and not much time of the trial had been spent on these irrelevant matters.

167.  Mr Chong rightly pointed out in his closing submissions that in principle, all co-owners (at a particular moment of time) being unanimously could validly agree to something different from what previously agreed under the DMC (ie varying the DMC).  Mr Tang provided the answer in his closing submissions when he stated that:-

“39. What D, IKF [Ip] and/o [sic] PWL [Poon] should have done under the land laws and land registration system, was to amend the DMC before signing or making another deed assigning the Strip to D. But none of them did so. They have their own to blame.”

168.  I agree. 

Relief

169.  Mr Chong submitted that the relief sought by the plaintiff concerned the Strip, items placed on the Strip, the Metal Gates and the Front Gate.  Mr Chong contended that the Metal Gates, the Front Gate, the LPG Rack, the Water Meters Cabinet and the foul water manhole were common parts.  He submitted in para 65 of his closing submissions that:-

“… In the premises, the Plaintiff being a mere 1/3 co-owner (as opposed to all co-owners of the Lot, management committee or incorporated owners) is not entitled to claim relief relating to common parts in such a capacity. As a matter of legal principle, the Plaintiff does not have exclusive possession over common parts entitling her to sue for trespass against the Defendant qua tenant-in-common to the Plaintiff enjoying unity of possession.” (Original underline)

170.  I agree that the Metal Gates, the Front Gate, the LPG Rack, the Water Meters Cabinet and the manhole were caught by Schedule 1 of the Building Management Ordinance Cap 344 and were common parts of the Lots as defined.  However, the plaintiff did not claim against the defendant for trespassing upon these common parts.  The plaintiff only claimed against the defendant for trespassing upon the Disputed Land.

171.  The Metal Gates and the Front Gate were installed by the defendant and Poon.  They were jointly owned by the defendant and Poon.  It was Poon’s evidence that she had delivered the keys to the Metal Gates and the Front Gate to her successor-in-title.  It was clear that it was Poon’s intention and agreement with her purchasers that her share of ownership in the Metal Gates and the Front Gate would be passed to her purchasers.  It was Lam’s evidence that she had passed the keys to the Metal Gates and the Front Gate to the plaintiff and Yeung.  Whether Lam had physically handed over the keys to the plaintiff did not change the fact that Lam and her co-owners had transferred their interest in the Metal Gates and the Front Gate to the plaintiff and Yeung. Lam’s predecessor-in-title had passed their share of ownership in the Metal Gates and the Front Gate to Lam and her co-owners and they had passed such interest onto the plaintiff and Yeung.  In such case, the plaintiff and Yeung were joint owners of the Metal Gates and the Front Gate with the defendant.

172.  As I have found that the Metal Gates and the Front Gate were installed on the Disputed Land to which the plaintiff had exclusive possession, the plaintiff is entitled to the relief of removing the Metal Gates and the Front Gate away from the Disputed Land.  However, the plaintiff had no contractual right to require the defendant to install the Metal Gates and the Front Gate along the boundary of the Yellow Part.  The Metal Gates and the Front Gate were installed in their current positions with the consent of Poon, the plaintiff’s predecessor-in-title.  The defendant had no contractual obligation to move them to the boundary of the Yellow Part.  The plaintiff is not entitled to an order ordering the defendant to remove the Metal Gates or the Front Gate from their current positions.  However, as the defendant as joint-owners of the Metal Gates and the Front Gate did not agree to have them moved away from the Disputed Land, the court will make a declaration that the plaintiff is entitled to remove the Metal Gates and the Front Gate away from the Disputed Land.  As these gates were installed by the plaintiff’s predecessor-in-title together with the defendant and it is only the plaintiff who wishes to remove the gates, the expenses for the removal shall be borne by the plaintiff.  Of course the plaintiff is allowed to remove these gates only after an exit from the Yellow Part is opened at the Boundary Wall to enable the defendant and her family to have access to the footpath outside the Lot.  As the opening of an exit at the Boundary Wall is not a subject matter for these proceedings, I shall leave it for the parties to sort out the arrangements between themselves sensibly.  I shall stay execution of the relevant part of my order until the said exit is built.

173.  The defendant should not have placed any of her personal properties on the Strip including the Yellow Part as the defendant was only entitled to a right of Way over the Yellow Part.  The plaintiff is entitled to require the defendant to remove all her personal properties placed on the Strip, failing which the plaintiff is entitled to remove the same at the costs and expenses of the defendant.

174.  I granted the injunction and the declaration sought by the plaintiff in paras (2) and (3) of her prayer in respect of the Strip except in the form of right of way over the Yellow Part.

175.  As the defendant had trespassed upon the Disputed Land, exclusive possession of which had been allotted to the plaintiff, the plaintiff is entitled to claim damages against the defendant.  Mr Tang confirmed that the plaintiff was only seeking nominal damages for trespass.  I order that the defendant do pay nominal damages of $100 to the plaintiff for trespassing upon the plaintiff’s properties.

Conclusion

176.  I allow the plaintiff’s claim and make the following orders:-

(1) the defendant do remove or cause to be removed within 14 days from the date of this order all personal properties of the defendant placed or left on the Strip; and

(2) the defendant whether by herself or her servants, agents, tenants or licensees be restrained by an injunction from using, occupying or enjoying the Strip except in the form of right of way on the Yellow Part and reasonable access to the common facilities referred to in the DMC and the common parts of the Building and the Lot.  Execution of this injunction shall be stayed until an exit from the Yellow Part is opened at the Boundary Wall or until further order.

177.  I also make the following declarations:-

(1) I declare that the defendant, as the owner of the 2/F properties, or her tenants or licensees, have no right to use, occupy or enjoy the Strip save and except in the form of a right of way on the Yellow Part and reasonable access to the common facilities referred to in the DMC and the common parts of the Building and the Lot; and

(2) I also declare that after an exit from the Yellow Part is opened at the Boundary Wall, the plaintiff is entitled to remove at the plaintiff’s own costs and expenses the Metal Gates and the Front Gate away from the Disputed Land.

178.  I order the defendant to pay nominal damages of $100 to the plaintiff.

179.  I grant liberty for the parties to apply to the court on the wording of the order and the judgment and on residuary matters relating to the removal of the Metal Gates and the Front Gate and relating to the opening of an exit at the Boundary Wall from the Yellow Part.

Costs

180.  Costs follow event.  I make an order nisi for the defendant to pay the plaintiff’s costs for this action (including costs previous reserved) to be taxed, if not agreed with certificate for counsel.

181.  The aforesaid costs order nisi shall become absolute 14 days after the date of this judgment unless any party shall apply to vary the same within this 14 day period.