LEE YUM SANG v. YEUNG FOOK HONG AND ANOTHER

HCA 638/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 638 OF 2009

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BETWEEN

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JUDGMENT ON COSTS

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1.  This judgment is on costs only as all claims and counterclaims have been settled on the first day of the trial.

2.  The plaintiff and the defendants are neighbours.  The 1st and 2nd defendants are husband and wife.  The dispute arose mainly out of a right of way from a public access road over the land of the 2nd defendant to the land of the plaintiff. 

Background

3.  The plaintiff used to be the sole owner of Lot 397 in Demarcation District 94 (“the Lot”), having been given the same as a gift by his father on 10 October 1987. 

4.  On 24 April 1993, the plaintiff entered into a deed of exchange with Messrs Lee Chi Fai, Chan Chi Shing, the 1st defendant and one Rank Chance Development Limited (“Rank Chance”), and they became tenants in common of the Lot.  The shareholders and directors of Rank Chance were the 1st defendant and Chan Chi Shing.

5.  By a deed poll of the same date but made subsequent to the deed of exchange, the tenants in common divided the Lot into sections A, B, C, D and the remaining portion (“RP”) of the Lot. 

6.  By an assignment dated 11 August 1994, the plaintiff assigned all his interests in sections A, B, C and RP to his fellow tenants in common in return for their assignment to him of all their interests in section D. 

7.  Section D is encircled by section C to the north, section B to the east and other privately owned lots to the south and the west.  It is completely landlocked.  It could have access to the public road system either through section B or section C. 

8.  Section B is relatively small comparing with the other sections of the Lot.  If access from section D to the public road should be over section B, the shortest way is from the western end of section B to its eastern end.  A right of way over section B will substantially affect its use and occupation. 

9.  On the other hand, section C is much larger than section B.  Its shape looks like a trapezoid with a narrow edge pointing to the west.  Access from section D to a public access road can be had over the narrow edge of section C.  Such a way for section D will produce less effect on the use and occupation of section C.

10.  After the assignment of section D to the plaintiff on 11 August 1994, the remaining tenants in common further assigned section C to one Lee Chi Wai on 13 December 1994.  Lee Chi Wai was a nephew of the plaintiff who had already passed away in October 2004. There is no dispute that Lee Chi Wai in fact held the interests in section C on trust for the 2nd defendant. 

11.  The plaintiff was granted a building licence by the District Land Office on 30 January 1995 for him to build a three-storey small house on section D.  He then set about to build a small house and completed it sometime in mid-1996.  He also made a way over the western tip of section C for access by car and on foot from section D to a public access road. 

12.  The way is coloured yellow on a lot index plan produced in annex 2 of the amended defence and counterclaim.  Part of the public access road adjoining the way built by the plaintiff on section C is also within section C.  This is coloured purple on a lot index plan produced in annex 1 of the amended defence and counterclaim.  The public access road land runs from section C into RP and then enters government land.  The part of the public access road in RP is coloured red on a lot index plan produced in annex 3 of the amended defence and counterclaim.  This public access road had been used by the villagers of Hang Tau Village for decades before the plaintiff had become the sole owner of the Lot.

13.  With the way over the western tip of section C and the public access road on both sections C and RP, the plaintiff could have access from section D to the public road system. 

14.  However, the plaintiff also laid an underground drainpipe running from section D through the western tip of section C and discharged to an open rain channel that runs also inside but to the northwestern edge of section C.  The defendants claim that they were unaware of this drainpipe until they dug open the ground at the western tip of section C on about 19 February 2009.

15.  The District Land Officer also granted a building licence to each of the owners of sections C and RP on 4 July 1996. The two building licences impose an obligation on the licensees to keep and maintain the existing public access road as it runs through sections C and RP.

16.  The building of small houses on sections C and RP was completed in about the end of 1996 to early 1997, and the houses were then occupied.  Section C was assigned to the 2nd defendant on 30 October 2002 by Lee Chi Wai, and RP was assigned to the 1st defendant on 25 March 2003.

17.  Regarding the plaintiff’s small house on section D, the DLO refused to issue a certificate to certify its compliance with the terms of the building licence.  The reason being that it had trespassed onto section B to its east by about 7 square metres.  The plaintiff then pulled down this small house and rebuilt it within the boundary of section D in 2001.

18.  The defendants alleged that the plaintiff, in rebuilding his small house, had elevated the ground by some 20 inches.  In order to continue using the way at the western tip of section C, the plaintiff then built a ramp leading from the gate of section D over the way and onto the public access road. 

19.  The plaintiff denied this allegation and insisted that he had not elevated the ground in rebuilding the house and that the ramp was there since he had built the first house in 1996.  In any case, the plaintiff and his family continued to use the ramp over the way and the public access road for access on foot and by vehicle to the public road system.

The disruption of the plaintiff’s access

20.  This was, however, brought to an abrupt halt on about 19 February 2009 when the defendants suddenly dug up the ramp and part of the public access road lying within section C.  The big pieces of broken cement and concrete lying on the way and part of the access road adjoining it made it difficult for people to walk along and impossible for vehicles to pass through the way and the public access road.

This action and the plaintiff’s application for injunction

21.  The plaintiff’s solicitors then issued a demand letter to the defendants requiring restoration and threatened to seek an injunction to compel them to do so.  The demand was ignored.  The plaintiff then issued this action and a summons for an injunction on 6 March 2009.  The summons came before Deputy High Court Judge To (as he then was).  The defendants then gave interim undertakings not to interfere with the plaintiff’s reasonable enjoyment of the way and the public access road or to prevent the plaintiff from restoring the way and the public access road.  Upon these undertakings, the plaintiff’s summons was adjourned and eventually not pursued with save that costs of the summons be in the cause.  The action then continued.

22.  The defendant engaged a surveyor in the preparation of his defence.  The surveyor found that part of section C is enclosed by a boundary wall to the side of section D.  Hence, the plaintiff has been trespassing a small part of section C since about the end of 1996 to early 1997 when the wall was built.  But the wall was built by the defendants and it was the fault of their contractor in positioning the wall within section C rather than on the boundary.

The issues

23.  The joinder of issues on the pleadings showed that there were four issues between the parties (which have now been settled):

(1)  whether the plaintiff had a right of way over the western tip of section C on which there is a ramp (as restored by the plaintiff after the hearing before deputy Judge To);

(2)  even if the plaintiff was entitled to the right of way, whether the plaintiff was entitled to keep the ramp over the way;

(3)  whether the plaintiff was entitled to keep the drain which ran underground through section C and discharged into the open rain drain in section C for discharge of waste water from section D;

(4)  whether the plaintiff had trespassed into section C by virtue of the enclosure of part of it into section D by the defendants’ boundary wall.

24.  For the last issue, the plaintiff never resisted the defendants’ claim for recovery of land.  The only issue was that the problem was created by the defendants.  The plaintiff also wanted the defendants not to cause damage to the plaintiff in rectifying the situation, in particular to the plaintiff’s drains and pipes which are underneath the plaintiff’s boundary wall.  Further, the eastern side of the plaintiff’s gate guarding the entrance to section D is affixed on this wall, and the other side of the gate is affixed by reference to the position of the eastern side.  The rebuilding of the defendants’ wall will necessitate the re-fixing of the plaintiff’s gate, and the plaintiff will require the defendants to be responsible for such costs.

The alleged verbal promise/guarantee and the use of the ramp

25.  In order to justify the right of way over the way in section C and the right to keep the drain that ran underneath section C, the plaintiff pleaded in his amended reply and defence to counterclaim (rather than the statement of claim) that when he executed the assignment on 11 August 1994 to obtain section D, his then fellow tenants in common had verbally promised him or given him a verbal guarantee that he would be permitted to lay a drain and electricity wires and have a right of way on foot and by vehicles over the other sections of the Lot.  It was only because of this promise by them that he had agreed to accept the otherwise landlocked section D.  Hence, the 1st defendant was estopped from denying the plaintiff’s right of way over section C and to have the drain running through section C.  Furthermore, the defendants had knowingly permitted the plaintiff to use a right of way over the way, and the plaintiff enjoyed the right by necessary implication or acquiescence.

26.  In order to justify the keeping of the ramp on section C to facilitate the passing of vehicles over the way, the plaintiff also pleaded that he had been using the ramp uninterrupted since 1996 and that he could not use the way without the ramp.

The defendants’ counter-allegation

27.  The defendants denied the alleged verbal promise/guarantee of right of way and right to lay cables and drain.  The 1st defendant alleged in his witness statement that after the plaintiff had built his house in section D in 1996, the plaintiff had to use the way on section C for access. Furthermore, the plaintiff’s house had trespassed over part of section B which adversely affected the value of the house on section B.  Section B was then registered in the name of one Yip Wong Yau who held it on trust for the 1st defendant and Chan Chi Shing.  The plaintiff’s wall separating section D from section C (which was built by the defendants) also trespassed over part of section C.

28.  The 1st defendant further alleged that after discussion between the plaintiff, Chan Chi Shing and the 1st defendant, it was agreed that the plaintiff would pay $800,000 for the use of the way as an access and also as compensation for his trespass over sections B and C.  But the plaintiff never paid this sum.  This allegation was denied by the plaintiff. 

Discussion on the merits

29.  I think the plaintiff can have a right of way either over section B or C.  It is a right of way implied by necessity.  I refer to the statement of principle by Lord Oliver of Aylmerton in Manjang v Drammeh (1990) 61 P & CR 194 at 196 to 197:

“It seems hardly necessary to state the essentials for the implication of such an easement. There has to be found, first, a common owner of a legal estate in two plots of land. It has, secondly, to be established that access between one of those lots and the public highway can be obtained only over the other plot. Thirdly, there has to be found a disposition of one of the plots without any specific grant or reservation of a right of access. Given these conditions, it may be possible as a matter of construction of the relevant grant (see Nickerson v Barraclough [1981] Ch 426) to imply the reservation of an easement of necessity.”

30.  When section D was assigned to the plaintiff on 11 August 1994, there was no express reservation of right of way over the other parts of the Lot.  Section D was enclosed by sections B and C which were then owned by the same tenants in common.  The plaintiff as the transferee of part of the interests in section D should thereby obtain a way of necessity over either section B or C.  To have the way over section C appeared to be more convenient to all concerned and produced smaller adverse effect to the owners of sections B and C.  The way over section C was indeed made and used since sometime in mid-1996, and the 1st defendant continued to have an interest in section B until 29 September 1997 when the house on it was sold to different owners.

31.  I thus expressed my view to the parties at trial that the plaintiff would be entitled to a right of way over the area over the way in section C as coloured yellow on the lot index plan in annex 2 of the amended defence and counterclaim.  Since this way is a right of way by necessity, the plaintiff need not rely on the alleged verbal promised/guarantee to justify his entitlement.  This alleged promise/guarantee is therefore irrelevant insofar as the right of way is concerned.

32.  Mr Lam, counsel for the defendants, referred to Adealon International Corp Proprietary Limited v Merton London Borough Council [2007] 1 WLR 1898 and submitted that the presumption was that any rights the grantor required over land transferred would have been expressly reserved in the grant.  Counsel further pointed out that the plaintiff was a grantor of his interests in section C to his then fellow tenants in common, and the presumption operated against him.

33.  This submission certainly has support from Adealon International Corp.  However, it ignores the fact that the plaintiff was the grantee of a significant interest in section D and thus was entitled to a right of way by necessity.  I disagree with the submissions of counsel for the defendants.

34.  Regarding the ramp built on the way, the plaintiff’s only justification for it is that he had been given uninterrupted use of it by the defendants since 1996 and he could not use the way without the ramp.  He has not pleaded the alleged verbal promise/guarantee to include the ramp.  Hence, there was no basis for any contractual or proprietary estoppel claim for the ramp.  The mere fact that the plaintiff had been allowed to use it since 1996 to early 2009 is not enough to ground him any right to it.  As the defendants have since early 2009 been objecting to the continued existence of the ramp, I think the plaintiff has no choice but to remove it.  I also think that the plaintiff can build his own ramp inside section D as this section has a large open area behind its entrance gate and there is more than enough space for a ramp to be built there.

35.  Regarding the drainpipe, the plaintiff confirmed through counsel that, save the foul in the water closet, all waste and dirty water from his house would pass through the drainpipe and discharge into the open rain drain in section C.  This is in fact contrary to clause 31 of the building licence granted for the building of the small house on section D. Clause 31 reads:

“31. The Licensee shall not discharge directly or indirectly or cause or permit or suffer to be discharged into any public sewer, storm-water drain, channel, stream-course or sea any trade effluent or foul or contaminated water or cooling or hot water without the prior written consent of the Director of Environmental Protection, who may as a condition of granting his consent require the Licensee to provide, operate and maintain at the Licensee’s own expense, within the lot or otherwise and to the satisfaction of the Director of Environmental Protection suitable works for the treatment and disposal of such trade effluent or foul or contaminated or cooling or hot water.”

36.  Hence, even if there were the alleged verbal promise/guarantee to allow the plaintiff to lay the drainpipe across section C, public policy would not have required enforcement of it as it is contrary to clause 31 of the building licence and creates a health hazard.

The open offer

37.  I should also mention that the defendants on 3 May 2011 made an open offer[1] to the plaintiff.  The defendants by the open offer stated that they would be prepared to take down the wall between sections C and D and to build a new one on the correct boundary at their own costs.  They would also grant the plaintiff a right of way at the existing way but without the ramp which the plaintiff has to remove at his own costs.  The plaintiff could build a drain running through section C for discharge of rainwater only into the open rain drain.  There should also be no order as to costs for the action and the counterclaim.  This open offer could only be accepted en bloc. 

The settlement

38.  The plaintiff did not find this offer acceptable, and the action continued to trial.  On the first day of the trial and after I had expressed my views on the merits of the four issues as summarised above, the parties proceeded to negotiate again.  They eventually settled on the terms that the plaintiff should at his own costs take away the ramp on the way no later than 1 August 2011.  The defendants should then at their own costs take down the existing wall between sections C and D and build a new one on the correct boundary between the two sections.  After the new wall has been built, the plaintiff should engage a contractor to be recommended to him by the defendants to affix his metal gate onto the new anchorage at the defendants’ cost.  The defendants shall grant the plaintiff, his successors and assigns a right of way over the way.  The defendants shall also grant the plaintiff, his successors and assigns a right to discharge only rainwater through the drainpipe underneath section C.  The parties also agreed to discontinue the action and the counterclaim.  The settlement, however, does not deal with the issue of costs which is for me to decide.

Discussion on costs for the application for injunction

39.  Counsel for the plaintiff submitted that the plaintiff should be given the costs of the action, in particular the costs of the application for injunction.  Counsel for the defendants resisted and said that the plaintiff had not succeeded in all the issues.

40.  Though the settlement terms bear a close resemblance to the open offer, I do not think the plaintiff’s entitlement to costs should be adversely affected by the open offer.  The facts of the case do not justify no order as to costs and it is unfair to require the plaintiff to bear all his costs, in particular the costs incurred in applying for the injunction.

41.  Regardless of the merits of the claims and the counterclaims, it was certainly wrong for the defendants to have dug up the ramp and the part of the public access road on section C without any prior notice to the plaintiff.  The consequence of that was obvious.  It created immense difficulties for the plaintiff and his family in gaining access to the public road system.  The defendants themselves suffered no inconvenience as their access to the public road was via another way at the other end of section C and through RP.  Even if the defendants were entitled to cut off the plaintiff’s access, they should not have done so in the way they did it. That was taking the law into their own hands.  This should be discouraged. They should have sought a declaration from the court before taking any step to cut off the access.

42.  Furthermore, I think the plaintiff is entitled to a right of way on the way, and it was certainly wrong for the defendants to have cut it off without notice.  I also make it clear that the defendants were not merely trying to take away the ramp.  They were trying to stop the access through the way.  I think the conduct of the defendants in digging up the ramp and the part of the public access road on section C justified and necessitated the plaintiff’s application for an injunction. 

Judgment on costs for the application of injunction

43.  I therefore order that the defendants do pay the plaintiff the costs of the application for injunction to be taxed.

Discussion on the remaining costs

44.  Regarding the remaining costs of the action and the counterclaim, though the plaintiff has failed in the issues of the ramp and the drain as he could no longer discharge dirty water through the drain, he has indeed succeeded in the most important issue, namely, the right of way.  He can now continue to enjoy access from section D to the public road system though he will have to build a ramp within section C.  For the trespass to section C as caused by the wall built by the defendants, I do not think the plaintiff should be blamed. 

Judgment on the remaining costs

45.  I therefore consider it fair that the plaintiff should have half of the remaining costs of the action and the counterclaim.  I therefore order that the defendants do pay the plaintiff half of the remaining costs of the action and counterclaim to be taxed.