BILLION STAR DEVELOPMENT LTD v. WONG TAK CHUEN AND OTHERS

HCMP 1042/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1042 OF 2011

(ON AN INTENDED APPEAL FROM HCA NO 708 of 2011)

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REASONS FOR JUDGMENT

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Hon Cheung CJHC :

1.  On 30 June 2011, the Court dismissed the plaintiff’s application for leave to appeal from the decision of Deputy High Court Judge Au‑Yeung made on 29 April 2011 with costs. We now give our reasons. The application was heard in Chinese but in view of the issues and arguments involved, we find it more appropriate to give our reasons in English. Given the interest these proceedings have generated and the fact that some of the defendants are not conversant with the English language, we have also provided a Chinese translation of our reasons for their ease of reference.

2.  The plaintiff is the owner and intending developer of a piece of land (The Remaining Portion of New Kowloon Marine Lot No. 25 and Section B of New Kowloon Marine Lot No. 25 – collectively “the Land”).  It is located adjacent to Stages III and VIII of Mei Foo Sun Chuen, a private residential estate in Kowloon.  Mei Foo Sun Chuen consists of residential blocks connected by a series of private roads within the estate, and the plaintiff has a right of way over these private roads.  The Land abuts Broadway, one of the private roads, and Broadway south‑west bound provides the only vehicular access to the Land.

3.  The plaintiff acquired the Land in 2009 and intends to develop it into a 20‑storey residential building.  The proposed development meets with strong opposition from some residents of Mei Foo.  They have organized themselves into a group known as “Working Group Against the Development of Screen Buildings in Mei Foo Sun Chuen”.  The defendants are either active members of the group or their supporters.  Some of them are public figures.  In March this year when the plaintiff’s caisson and foundation contractor (Wing Shing) tried to commence construction works on the Land, it encountered repeated confrontations by protesters and their supporters who used various means to prevent it from accessing the Land via the private roads and from commencing works on the Land. These protests and blocking activities continued into April, as a result of which the plaintiff was not and is still not able to commence the scheduled construction works on the Land.

4.  The writ of summons was issued on 20 April 2011 and on the same day, the plaintiff took out an inter partes summons for interlocutory relief against the 1^st to 7^th defendants.  Essentially, the plaintiff applied for an injunction to prevent the defendants from trespassing on the Land and from interfering with the plaintiff’s exercise of its right of way over the private roads for accessing the Land to carry out the intended construction works.

5.  The inter partes summons came before Deputy Judge Au‑Yeung for hearing on 29 April 2011.  The defendants asked for time to file evidence in opposition to the application for interlocutory injunction.  That request was granted by the Deputy Judge who, by way of case management, adjourned the substantive hearing to a date to be fixed with three days reserved.  The plaintiff did not ask for an expedited hearing and it was not ordered.  (The substantive hearing has since been fixed for 19 to 21 December 2011.)  The Deputy Judge also gave directions for the filing of evidence.    However, she refused an application by the plaintiff for the grant of an interim injunction, essentially in terms of the interlocutory injunction prayed for in the inter partes summons, pending the substantive hearing.  The Deputy Judge took into account the defences or purported defences outlined to her by or on behalf of the defendants at the hearing, the apparent lack of urgency, the need to give the defendants a proper opportunity to put in evidence in opposition to the application for injunction, the question of whether the plaintiff’s financial loss could be quantified, and generally the question of balance of convenience, and concluded that no interim injunction should be granted pending the substantive hearing.

6.  From that refusal of an interim injunction, the plaintiff unsuccessfully sought leave to appeal from the Deputy Judge.  The plaintiff therefore came before this Court for leave to appeal.

7.  For reasons that will become apparent, I will be brief with my reasons for refusing leave.

8.  There was no intended appeal against the Deputy Judge’s decision to adjourn the hearing of the substantive application to a date to be fixed and her directions for the filing of further evidence.  Those were matters of case management which the court would, in any event, be most reluctant to interfere with.  Nor could there be any complaint about the hearing dates of the substantive application as no direction for an expedited hearing was ever sought.

9.  There is no dispute that so far as the Deputy Judge’s refusal of an interim injunction pending the substantive hearing is concerned, it was an exercise of discretion on her part which on well established general principles, the court would not lightly interfere with.

10.  The main thrust of the arguments of Mr Benjamin Yu SC, appearing for the plaintiff together with Ms Eva Sit and Mr Elliot Fung, was that the plaintiff has an indisputable title to the Land and right of way over the private roads for the purposes of accessing the Land.  The defendants’ actions amounted to flagrant infringements of the plaintiff’s proprietary right and interest over the Land and the private roads (in terms of its right of way).  On well established common law principles, an injunction should issue, almost as a matter of course, to prevent similar infringements in future, save for exceptional circumstances which did not exist in the present case.  The Deputy Judge was therefore wrong to treat the plaintiff’s application for an interim injunction, albeit pending the substantive hearing, as an ordinary application for interlocutory injunction.

11.  It is plain that the validity of this argument turns on whether the plaintiff’s right and entitlement over the Land and the private roads (in terms of the right of way) are really indisputable.

12.  I would start with the right of way and the proposed redevelopment of the Land.  The Land was originally owned by the same developer who developed Phase VIII of Mei Foo Sun Chuen.  At the beginning, the whole of New Kowloon Marine Lot No. 25 was owned by one and the same developer, Mei Foo Investments Limited – subsequently known as Broadway Nassau Investments Limited.  Under the original building plans covering the entire Lot which was approved in 1974, the Land was to be used for LPG storage purposes and relevant facilities were to be built on the Land, whereas the rest of the Lot was to be developed into blocks of residential building comprising Phase VIII of Mei Foo Sun Chuen and the private roads in question.

13.  In 1983, the developer sold the Land, which had already been carved out from the rest of the Lot as a separate Lot, to Mobil Oil Hong Kong Limited.  Paragraph 1 of the recitals in the assignment dated 15 April 1983 referred to the developer/vendor as the registered owner of the Land “together with the LIQUEFIED PETROLEUM GAS PLANT erected thereon”.  Paragraph 2 of the recitals stated that the Land and the building thereon [i.e. the LPG plant] formed part of Mei Foo Sun Chuen.

14.  The operative part of the assignment then set out the sale by the developer to Mobil Oil (with the involvement of a confirmor) of the Land :

“together with the LIQUEFIED PETROLEUM GAS PLANT erected thereon TOGETHER also with all fixtures, machinery, equipment, furnishing and other articulated personal property … attached to, situated in or upon, or used in connection with the use, operation and occupation of the premises thereby assigned, and all the appurtenances thereon”.

15.  The operative part of the assignment went on to grant the subject right of way over the private roads owned by the developer :

“AND TOGETHER with full right and liberty for the Purchaser, its servants and licensees in common with the Vendor, the Confirmor and their respective servants and licensees with or without vehicles at all times and for all purposes connected with the proper use of the premises hereby assigned to pass and repass to and from the premises over and along all the private roads of the estate of Mei Foo Sun Chuen” (emphasis added).

16.  The operative part of the assignment further added :

“TOGETHER WITH the right for the Purchaser to maintain, repair, renew and otherwise replace the existing liquefied petroleum gas pipe‑line distribution system to all the flats and commercial areas in [Stages I, II, III, IV and VIII of Mei Foo Sun Chuen] and the right to use such system for the purpose of supplying the occupants of all such buildings with liquefied petroleum gas …”

17.  Towards the end of the assignment, one finds a covenant by the vendor and the confirmer that they

“will not permit or allow any other company or person to supply by way of pipe‑line distribution gas of any kind to all or any (or any part) of the buildings forming Stages I, II, III, IV and VIII of Mei Foo Sun Chuen TO THE INTENT that the Purchaser shall have during the residue of the said term of 99 years the exclusive right to supply gas by way of a pipe line distribution system for the said buildings.”

18.  In 2002, Mobil Oil assigned the Land to Exxonmobil Hong Kong Limited.  By then, the LPG facilities formerly erected on the Land had been relocated elsewhere.  In 2009, Exxonmobil assigned the Land to the plaintiff.

19.  The matter will no doubt be debated closely, hopefully on much fuller materials, at the substantive hearing and probably at the trial of this action as well.  All I would say at this stage is that I find it arguable, and I would not put it higher than that, that the right of way acquired by the plaintiff through its predecessor‑in‑title under the 1983 assignment is not an unrestricted one.  In other words, it is arguable that when the right of way was couched in terms of “for all purposes connected with the proper use of the premises hereby assigned” – that is the Land and the LPG plant erected thereon, the parties to the assignment had in their contemplation the continued use of the Land and the LPG plant to be assigned for the storage and supply of LPG only.  That was what was meant by the “proper” use of the premises.  The right of way granted under the assignment was never intended to cover the general use of the private roads for any other purposes in connection with the Land, such as the construction of a multi‑storey building on it.

20.  I have not forgotten that by two letters, the developer has recently confirmed with the plaintiff that it has no objection to the plaintiff’s vehicles using the private roads to access the Land for the purposes of carrying out the intended construction works.  However, these letters cannot by themselves give the plaintiff any proprietary right over the private roads to found the interim injunction sought for.  Section 4(1) of the Conveyancing and Property Ordinance (Cap. 219) requires a legal estate in land to be created only by deed.  Nor can the letters, which at best represent the developer’s current, subjective understanding of the scope of the right of way granted under the 1983 assignment, affect the proper construction of the right of way so granted, which is a matter of law for the court.

21.  There is, as I see it, a further and related argument standing in the way of the plaintiff, at this interim stage.  The plaintiff asserts that unquestionably, it owns the so called “residual plot ratio” associated with the Land.  It is therefore free to make use of the residual plot ratio and erect the multi‑storey building on the Land.  I notice that legal aid has been granted in relation to a proposed challenge against the Building Authority’s approval of the relevant building plans and building works.  The approval was apparently based on the premise that the residual plot ratio indeed belongs to the plaintiff.

22.  Given that this is likely to be a matter of contention in separate legal proceedings, again I will be extremely brief with my view.

23.  In my view, it is again arguable, given the development history of New Kowloon Marine Lot No. 25 and the background to the erection and assignment of the former LPG facilities on the Land, that the so called residual plot ratio was not intended by the parties to the 1983 assignment to be assigned together with the Land and the LPG plant to the plaintiff’s predecessor‑in‑title.  After all, the Land was, at least up to that time and for more than a decade thereafter, used for the storage and supply of LPG to the residential flats comprising Mei Foo Sun Chuen, and Mobil was granted a monopoly to do so for the rest of the term of the government lease.  On the limited materials before the Court, there was no suggestion that redevelopment of the Land and LPG plant was within the contemplation of any parties at the time.  Rather, the evidence indicates that part of the available plot ratio associated with the Land had already been utilized to sustain the development of the residential blocks, the scale of which exceeded what the (residential) land on which they were erected would otherwise have permitted in terms of its own available plot ratio.  There was apparently no compelling reason to assume that the so called residual plot ratio associated with the Land was intended to be ever utilized.  Or, if that was ever contemplated, that it was intended to be utilized for the benefit of any possible future redevelopment of the Land and LPG plant, as opposed to, for instance, any future redevelopment of Mei Foo Sun Chuen.  All this could arguably affect the proper construction of the 1983 assignment. In this regard, I should add that the Court notes but is, of course, not bound by the views expressed by the relevant government departments on this matter.  Again, I would put this argument as no more than arguable.

24.  Indeed, nothing said in this judgment is intended to preempt any future decision on these points.

25.  For these reasons, I do not accept Mr Yu’s arguments in relation to the right of way and the plaintiff’s proposed redevelopment of the Land.

26.  Mr Yu argues that even assuming that the plaintiff’s right of way over the private roads granted under the 1983 assignment is to be construed narrowly, and the developer’s two recent letters permitting its contractor to use the private roads for construction purposes only give the plaintiff a mere licence, still the plaintiff can maintain an action based on private nuisance in support of the interim injunction asked for. Mr Yu contends that the plaintiff is the undisputed owner of the Land and the threatened action under complaint would interfere with the plaintiff’s enjoyment of the Land as landowner.  He does not, under this argument, need to show any proprietary right over the private roads (in terms of the right of way).

27.  I can see the force of this argument.  However, it begs the question of whether the plaintiff is incontestably entitled to make use of the so called residual plot ratio to erect the multi‑storey building on the Land, a matter on which I have already indicated my view.

28.  Turning quickly to the question of trespass on the Land, there can be no dispute that the plaintiff is the owner of the Land. However, it is not the plaintiff’s case that trespassers have been remaining on the Land, refusing to leave.  Its case is that whenever the plaintiff’s contractor attempts to access the Land for the purposes of the construction works, people would gather and block the access roads and some would in the course of doing so even trespass onto the Land.

29.  The plaintiff’s inability to obtain an interim injunction relating to the access roads (for the reasons given above) means, in reality, that it is not in a position to commence construction works on the Land pending the substantive hearing.  There is therefore no real risk of people wishing to trespass onto the Land for the purposes of stopping the proposed construction works.

30.  For this reason, I also reject Mr Yu’s argument in relation to trespass on the Land.

31.  Once Mr Yu’s main arguments fall away, the Deputy Judge’s refusal of an interim injunction pending the substantive hearing is difficult to challenge.  It was, as I observed, an exercise of discretion on her part.  She took into account relevant matters and she was quite entitled, on the materials before her, to come to her views on those matters.  The resulting refusal was not, in my view, something that the Court of Appeal would be entitled to interfere with.

32.  Mr Yu argued that the Deputy Judge was wrong in saying that damages would be an adequate remedy.  But I think to be fair to the Deputy Judge, she was merely saying, in her ex tempore judgment (in Chinese), that one of the matters she took into account was that the plaintiff’s financial loss could be quantified.  Mr Yu criticized the Deputy Judge for focusing on the fact that the defendants had not yet had a proper opportunity to file evidence in opposition to the plaintiff’s application (paragraph 11 of the judgment).  I do not accept the criticism.  The Deputy Judge plainly had in mind the plaintiff’s assertion that it had an overwhelming case (paragraph 4) and the question of whether the defendants had arguable defences (paragraph 7), both of which were highly relevant matters that she took into account, when she remarked that the defendants had not had an opportunity to file evidence.

33.  In my view, the intended appeal therefore had no reasonable prospect of success.  Nor was there any other reason why the plaintiff should be given leave to appeal.

34.  For these reasons, the application for leave was refused with costs.  We also granted a certificate for two counsel.

Hon Chu JA :

35.  I agree with the reasons given by the Chief Judge that the application for leave should be refused with costs.