WISENAME LTD v. THE SECRETARY FOR JUSTICE

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1996, No. 193
(Civil)

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J U D G M E N T

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Liu, J.A.:

1. The plaintiff is the owner of Lot 753 in Demarcation District No. 179, Che Kung Miu Road, Shatin, New Territories. By a New Grant dated 18 September 1957, the Government granted to the predecessor-in-title of the plaintiff (Mr Yen) Lot 753 subject to, inter alia, Additional Special Conditions. Mr Yen had been owner of the area in the New Grant and other lots in the same Demarcation District. Of the lots formerly owned by Mr Yen, Lots Nos. 483, 484, 485, 486 and 622 were surrendered to the Government for the New Grant of Lot 753. Lots 483 and 484 were situated to the west of Lot 753. Together these two Lots 483 and 484 formed a contiguous elongated piece of land leading from Lot 753 to a path described as the Main Path. That elongated piece of land touched Lot 753 in the east and the Main Path in the west. But for the right to pass over this elongated piece of land (Lots 483 and 484) for access to and egress from Shatin via the Main Path, Lot 753 would be land-locked.

2. Lot 753 is in the shape of an almost square. The elongated piece of land joins the left (western) upper side of the square, running westerly all the way to the Main Path.

3. The "land-locked" concern gave rise to Additional Special Condition 12 in the New Grant which reads as follows :

"12. A right of way along Crown Land shown coloured yellow on a plan deposited in the District Office, Tai Po, shall be given. The Grantee shall construct a road or path on the piece of ground over and along which such right of way shall be given at such time or times and such manner as the District Commissioner may direct and shall uphold, maintain and repair such road or path and everything forming portion of or appertaining to it to the satisfaction of the District Commissioner, and the Grantee shall be responsible for the whole as if he were absolute owner thereof. Any alteration of the government road to which the right of way is given absorbing a portion of such piece of ground or affecting the gradient thereof shall not give rise to any claim by the Grantee who shall carry out all consequent alterations to such road or path constructed by him."

4. At a cursory glance, Additional Special Condition 12 may broadly be said to have created in favour of Lot 753 a right of way over a strip on Lots 483 and 484 coloured yellow (yellow strip) on a relevant plan for the New Grant. According to Mr Daniel Kwan, the plaintiff's architect, in 1981/1982 the Main Path was excavated in the course of Government road network construction, and occupants of Lot 753 now have access to and egress from Shatin only on foot, having to overcome some intervening concrete steps. The yellow strip over Lots 483 and 484 still exists today.

5. It is the Government's case that the plaintiff as the current owner of Lot 753 under the New Grant presently continues to enjoy the same right of way over this yellow strip to and from the built-up area of Shatin, though on foot. The plaintiff's complaint is that as owner of Lot 753, it no longer enjoys a right of way of sufficient breadth for vehicular traffic to the Shatin road network. As I have said, it is common ground that the plaintiff may go on foot to and from Shatin by ascending or descending a number of steps. That is, in substance, the bone of contention.

6. The appellant abandoned an estoppel argument. The appellant's attempt to introduce a fresh Ground of Appeal which was not canvassed in the court below was unsuccessful. It was sought to be argued on the proposed new ground that Additional Special Condition 12 contained implied words of limitation to the effect that for public good Government possessed an overriding power to alter or otherwise encroach upon the right of way granted by that Additional Special Condition. Mr Chong, counsel for the plaintiff, contended, inter alia and as a matter of prejudice, that the plaintiff would be precluded from properly ventilating before this court the question as to whether Government's alleged derogation from the New Grant in the form it took was truly for public benefit. We refused Mr Ho's application made on behalf of the appellant.

7. It is quite unnecessary to deal seriatim with the Grounds of Appeal, but I should mention that in addition, Government also called in aid the Limitation Ordinance. It was argued by Mr Ho that the alleged derogation from the New Grant occurred, on the evidence of the plaintiff's architect, in 1981 or 1982 and that the plaintiff's claim against Government on the right of way under Additional Special Condition 12 was not made until more than 12 years later and was statute-barred. The limitation defence was an alternative to Government's primary contention that the plaintiff enjoyed today the very same right of way for access to and egress from the rest of Hong Kong over the same yellow strip.

8. This appeal revolves around the true construction of Additional Special Condition 12. Mr Ho's contention has, at least, the merit of brevity. Counsel submitted that the right of way over the yellow strip was granted by the first sentence in Additional Special Condition 12. The remainder of that Additional Special Condition created three obligations on the part of the Grantee, Mr Yen, in the enjoyment of his right of way thereby granted. First, the Grantee must build a road or path on the yellow strip in such manner as directed by the District Commissioner. Secondly, the Grantee must maintain and repair such road or path and bear the full responsibility as if he were its absolute owner. Thirdly, the Grantee must, from time to time, adjust his road or path to accommodate any change made to "the government road" to which the Grantee's right of way was given. To what or what Government road the right of way was to be given must necessarily be affected by the direction issued for the construction of the road or path.

9. Mr Ho further argued that although no direction had been given by the District Commissioner for the construction of a road or path by the Grantee, the plaintiff, nevertheless, continued to enjoy its right of way over the yellow strip for access to and egress from Shatin, albeit on foot. The plaintiff had never been called upon to undertake consequential alterations to any road or path.

10. The plaintiff's complaint is : its predecessor-in-title, Mr Yen, had enjoyed a right of way to the extent of some eight feet in width, which was open to vehicular traffic to and from the built-up area of Shatin. No vehicular traffic is now possible although the plaintiff may still go to and from Shatin on foot over the yellow strip and by negotiating some concrete steps.

11. At the time of the New Grant, a new road running close to Lot 753 was in the pipeline. It was to be a road to run by the side of a nullah, the so-called Nullah Road. On the plaintiff's contention, the right of way granted by the New Grant would then allow vehicular traffic from Lot 753 through the yellow strip over Lots 483 and 484, all the way to the planned Nullah Road. But by 1988, traffic superstructure in this area had been modified and roads re-designed. The Nullah Road was replaced by a network of roads with Che Kung Miu Road running on the north-south side of Lot 753 and Shatin Tau Road on its eastern side. The Main Path was completely obliterated by the new network, in fact earlier in 1981/1982 when ground level was elevated in preparation of the proposed construction.

12. The true interpretation of Additional Special Condition 12 should be attempted, so it was agreed, in the factual matrix of the surrounding circumstances, which was reflected in the correspondence : on 31 August 1995, Mr Yen wrote to the Tai Po District Officer voicing his concern over the likelihood of Lot 753 being land-locked except for the passage through the surrendered Lots 483 and 484. In his reply of 20 September 1995, the Tai Po District Officer gave an assurance that Lots 483 and 484 could "be used as a right of way" after surrender and that a right of way would be incorporated in the New Grant for Lot 753. By a letter dated 4 February 1956, the Tai Po District Officer offered Mr Yen terms for the New Grant. These terms included Additional Special Condition 2 which allowed the erection on Lots 753 two residences of not more than two storeys in height "with garage". The terms of the New Grant were duly accepted by Mr Yen. By a letter dated 17 December 1957, Mr Yen wrote to the Tai Po District Officer that in conformity with Additional Special Condition 12 of the New Grant, he would proceed to construct a road or path on the right of way over Lots No. 483 and 484 "shown colour yellow on the plan deposited in the District Office, Tai Po". In his reply of 31 December 1957, the Tai Po District Officer stated :

"In view of the fact that we are considering the granting of a new right of way to your lot, you should not commence the construction of the path along the old right of way although you are at liberty to use this".

By a further letter of 29 August 1959 to Mr Yen, the Tai Po District Officer proposed a new right of way not over the yellow strip, but from Lot 753 "to the Main Path in the northernly direction, as sown in green on the attached site plan". Mr Yen replied on 8 September 1959 and negotiated for "a two-lined motor-car traffic, say 21 feet wide" as "the proposed new right of way". Mr Yen further referred to an "existing right of way provided by Lots 483 and 484 (he was then) enjoying", which was of a similar width of 21 feet. The letter concluded : "It is expected that in a near future by a site widening, the existing bridge, motor-car transportation can be directed to my site". Mr Yen must have later made a further suggestion for a right of way 25-foot wide, allowing two-way vehicular traffic. In his letter dated 6 November 1959 to Mr Yen, the Tai Po District Officer responded :

"I am prepared to arrange for a right of way of 15' width, but your suggestion that a 25' wide right of way, giving two-way access for vehicles seems unnecessary".

That was followed by a later letter of 9 May 1961, in which the Tai Po District Officer was prepared to approve a 16-foot right of way.

13. In all the correspondence after the end of December 1957, the letter reference was : "Lot No. 753 in DD 179 Che Kung Miu" or "Right of way to Lot 753 in DD 179, Che Kung Miu". The common focus in correspondence on a neighbouring Government road could take the matter no further.

14. By a letter of 22 March 1962 erroneously dated 22 March 1961 to the Tai Po District Officer, Mr Yen gave notice that construction of the right of way as "originally confirmed" in the New Grant had "been carried out" in compliance with Additional Special Condition 12. Whatever construction Mr Yen had undertaken, no direction for his or any construction was given by the District Commissioner. Much later, on 3 December 1980, by a letter of even date to the Tai Po District Officer, Mr Yen sought a prompt response to his "present application for the right of way". In an internal memo between the Shatin New Town Development Office and the District Officer of Shatin, the authority apparently assumed Mr Yen's application for a right of way as a maneuver to prevent a renewed encroachment on a nearby piece of Crown land. Hence Mr Yen's application was not seriously entertained.

15. In the meantime, the Che (Tse) Kung Road had been completed. By a letter of 30 November 1987, Mr Yen then aged 94, disclosed to the Shatin District Land Officer that he had been leaving his car from Lot 753 on a piece of vacant waste land in front of Che Kung Miu (Temple) close to an access to Che Kung carpark and the Chui Tin Street in Shatin. Mr Yen was requesting a "vehicular access to" Lot 753. Lastly, on 24 October 1988 the Shatin District Lands Officer informed Mr Yen "that Government would consider re-granting (him) a vehicular right-of-way from Che Kung Miu Road to" Lot 753. It was warned that "the proposed re-grant of vehicular right of way (might) require modification of Additional Special Condition No. 12".

16. The plaintiff wrote, through its solicitors, on 12 November 1991 to the Director of Highways under the pretext that the plaintiff was obliged "to construct a road or path on the piece of ground over and along which (the plaintiff had) a right of way" according to Additional Special Condition 12. This claim of the plaintiff's led to the proceedings before Sears, J.

17. It would appear from the correspondence that under Additional Special Condition 12 Mr Yen had a right of way to pass over the yellow strip on Lots 483 and 484, that Mr Yen had put to use over the yellow strip his right of way, that a different 21-foot road or path for vehicular traffic was negotiated with Government who were prepared in May 1961 to accede to his request by recommending a different 16-foot right of way, that by 22 March 1962, having declined to accept the terms for the 16-foot right of way, Mr Yen notified Government that he had constructed (apparently without any direction from the District Commissioner) a "right of way" in (purported) compliance with Additional Special Condition 12, that the Tai Po District Officer had encouraged Mr Yen "to use" the "old" right of way, that much later in 1980 Mr Yen sought from Government another right of way in a different direction for vehicular traffic but his request was suspected by Government to have been motivated by his desire to discourage trespassing on Government land, that Government had never rejected Mr Yen's claim to a vehicular user nor his application on a like claim for a new route and that the plaintiff's claim was entertained in the same accommodating spirit.

18. After Lot 753 had been assigned to the plaintiff, in 1991 Government was informed of the plaintiff's intention to construct a vehicular access road to Che Kung Miu Road purportedly in exercise of its right under Additional Special Condition 12. On 23 May 1995, the plaintiff through its solicitors required Government "to give, within the next 14 days, such direction to (the plaintiff through its solicitors') office, of the means through which (the plaintiff's) right of way (might) be exercised." On 5 July 1995, an Originating Summons was issued with a prayer for various declarations and relief by reference to the right of way under Additional Special Condition 12. Sears, J. made two declarations in favour of the plaintiff, from which Government appealed.

19. At the hearing of the Originating Summons, Mr Lo Leun testified before Sears, J. that a dirt path leading to Lot 753 was accessible to vehicular traffic in the 1960's. Evidence was also received from Chan Ching Yeung, the Estate Surveyor, that the Main Path to the east was 1 to 1.5 metres wide. Mr Lo gave its dimension in the westerly direction as some 8-foot. In any case, Mr Lo was able to gain access to Lot 753 by car driven over a bridge.

20. I set out below the material findings of Sears, J. :

(1) On the overall evidence led by the Government, the bridge and the Main Path were difficult for vehicles to negotiate;

(2) On the evidence of Mr Chan Ching Yeung, the Estate Surveyor, and that of Mr Lo, both of which were accepted by the judge, the Main Path was 1 to 1.5 metres wide on one end and 8-foot on the other end;

(3) On Mr Lo's evidence, the Main Path was a dirt path on which outside vehicles could be driven to and from Lot 753 in the 1960's.

21. Sears, J. held that a vehicular right of way was granted by Additional Special Condition 12 in the New Grant, joining Lot 753 to any Government or public road. The judge made a declaration accordingly.

22. The judge concluded that Additional Special Condition 12 was breached as from "the time when Government did not provide a right of way when asked". (Emphasis added). Government could only have failed so to provide a right of way after the expiration of the deadline of 14 days or a reasonable time thereafter set by the letter despatched by the plaintiff's solicitors on 23 May 1995. The plaintiff forwarded its request of 23 May 1995 to the Government long after the severance of the "vehicular access between (Lot 753) and a Government or public road". Therefore, the judge's view could only be that Government's derogation from the New Grant was at a time when Government failed to provide vehicular access to Lot 753 after the expiration of that deadline or a reasonable time afterwards by giving "direction ......of the means through which .......the right of way (might) be exercised". The second declaration made by the judge would seem to have misplaced the emphasis solely on the alleged severance of vehicular access. In its present format the second declaration reads :

"By severing the means of vehicular access between the Plaintiff's land and premises and a government or public road, the Defendant has been in breach of and derogated from the said New Grant."

23. Mr Chong, counsel for the plaintiff, sought leave to serve a Respondent's Notice with the view to rectifying the terms of the second declaration, which would appear to have inadvertently isolated for adoption only one limb of prayer (a) in the Originating Summons. The declaration couched in those terms did not accurately reflect the judge's holding. The proposed Respondent's Notice sought to amend the second declaration to the effect that by severing the means of vehicular access between the plaintiff's land and premises and a Government or public road "and by failing and/or refusing to provide means of vehicular access thereto [and egress therefrom]", Government had been in breach of and derogated from the New Grant. That would re-align the second declaration with the terms in which the judge had intended to make his declaration.

24. Mr Ho for the appellant requested for particulars. The Respondent's Notice was evidently an attempt on behalf of the plaintiff to put in place a declaration in terms of the judge's holding. We were unable to see what particulars the plaintiff could possibly furnish of the terms of a declaration which the judge would have made but for the obvious inadvertence. There was otherwise no resistance from Mr Ho to the plaintiff's application for leave to file a Respondent's Notice. I would formally grant leave, dispense with service and proceed to deal with this appeal accordingly.

25. Sears, J. also firmly stated that he was not construing Additional Special Condition 12 by reference to the recent correspondence with Government on the negotiated re-grant of a proposed new vehicular right of way. We must accept that firm statement. However, Mr Ho would seem to be correct that there was insufficient evidence to support what, the judge said, was within the contemplation of the parties to the New Grant to provide the Grantee with a future access onto the planned Nullah Road or Che (Tse) Kung Miu Road or any Government or public road.

26. I pass then to consider what is central to this appeal, the true construction of Additional Special Condition 12. The parties were at one that Additional Special Condition 12 was to be construed in the factual matrix of the circumstances surrounding the signing of the New Grant. It was also accepted that in the absence of any words of limitation, the scope and extent of a right of way would generally depend on the purpose for which it was intended to be used. See Cannon v. Villars, (1878) 8ChD 415 at pp.420 & 421, per Jessel, MR:

"...... the grant of a right of way per se and nothing else may be a right of footway, or it may be a general right of way, that is a right of way not only for people on foot but for people on horseback, for carts, carriages and other vehicles. Which it is, is a question of construction of the grant, and that construction will of course depend on the circumstances surrounding, so to speak, the execution of the instrument."

"Prima facie the grant of a right of way is the grant of a right of way having regarded to .........the purposes for which it is intended to be used; and [it] may be legitimately called in aid in determining whether it is a general right of way, or a right of way restricted the foot-passengers, or restricted the foot-passengers and horsemen or cattle, which is generally called a drift way, or general right of way for carts, horses, carriages, and everything else." (Emphasis supplied).

27. In St Edmundsbury Board of Finance v. Clark, [1973] 3 All E R 902 at pp.922h & 923e Megarry J., as he then was, explained the Master of the Rolls' process of interpretation in these terms :

"The process envisaged is one of construing the language in the light of the circumstances, rather than of construing the language in vacuo and then turning to the circumstances only for a limited purpose."

"..... there can be little doubt that a grant of a right of way simpliciter, making no reference to being confined to foot passengers or being extended to vehicles, will prima facie be construed as being a general right which includes vehicles."

28. It is equally clear that the right of way granted by the Additional Special Condition was to ensure that Lot 753 would not be land-locked. That must mean that the plaintiff would have to be given an access path or road to the neighbouring Shatin area. No restrictive words were incorporated into Additional Special Condition 12, nor could they be found elsewhere in the New Grant. On the contrary, Additional Special Condition 2 required the owner of Lot 753 to erect two residences on the lot, each with a garage. Mr Yen had caused to be built two such garages. There were no circumstances or disclosed intention to suggest that the right of way granted was restrictive. Government's counter-offer made at one time for a 16-foot right of way did not preclude vehicular user. At all times Lot 753 was accessible to vehicular traffic, albeit not without difficulty. Government did not refute the claim to vehicular access in the plaintiff's recent application for a new traffic route, and Government's attitude had throughout been consistent with what was said to be the general understanding between the Grantor and Grantee of the New Grant and the needs of Lot 753.

29. The right of way granted by Additional Special Condition 12 was clearly a general right of way. I am prepared to accept that apart from the first sentence in Additional Special Condition 12, the rest of that Additional Special Condition delineates the primary obligations of the plaintiff as owner of Lot 753, but that is not to say that the nature of the last obligation to adjust the conditions of a path or road, if so constructed on Government's direction, to accommodate road re-alignment requires Lot 753 to be directly linked up with the Government road network for vehicular access. In my view, Additional Special Condition 12 created a general right of way for serving Lot 753, including that for an effective vehicular access, direct or otherwise, to Government road network.

30. Before Mr. Yen notified Government on 23 March 1962 of his purported compliance with Additional Special Condition 12 in the absence any direction of the District Commissioner, by 9 May 1961 Government had been prepared to recommend approval of a different 16-foot wide right of way to replace the existing right of way over Lots 483 and 484, which was claimed by Mr. Yen on 8 September 1958 to have been constructed or in use. The enjoyment of the right of way granted by Additional Special Condition 12 had never been hampered before the obliteration of the Main Path in 1981/1982 when the Government, according to the plaintiff's architect Mr. Daniel Kwan, elevated the surrounding area by about 1 to 1.5 metres for the construction of a highway. The Main Path was thus obliterated. That the right of way granted by the New Grant was unrestrictive was never made an issue by Government, nor was that claim ever refuted. In the language of Additional Special Condition 12, the surrounding circumstances and official response, nothing was said about the right of way granted by the New Grant being less than a general one.

31. The first declaration made by the judge is clearly too wide. The first declaration made by Sears, J. reads :

"The Defendant is obliged, under Clause 12 of the Special Condition of the New Grant No.8672 of 18th September 1957 (hereinafter called 'the said New Grant'), to provide means of vehicular access between the Plaintiff's land and premises known as Lot No.179, Che Kung Miu Road, Shatin, New Territories (hereinafter called 'the Plaintiff's land and premises') and the Che Kung Miu Road or any government or public road."

32. It is worthy of note that Additional Special Condition 12 made no mention of the Main Path nor the once-contemplated Nullah Road and that Mr Yen seemed to have been content with any vehicular traffic route. The first declaration which the judge must have been invited by the plaintiff to make, declared a vehicular right of way to the Che Kung Miu Road without specifying any particular routing. It was not established that the vehicular right of way under Additional Special Condition 12 must join Che Kung Miu Road or that it must necessarily be a direct or proximate link to a Government or public road or Government road network. The access envisaged was only one for resolving Mr Yen's "landlocked" concern. Much would depend on Government direction which was to be largely dictated by policy and expedience. I would set aside the first declaration.

33. The second declaration as amended would still seem to be less than precise. I would grant a declaration that the Hong Kong Special Administrative Region of the People's Republic of China has derogated from the grant of a right of way to the plaintiff by Additional Special Condition 12 of the New Grant, in that it has failed to provide thereunder Lot 753 with any or any effective vehicular access to and egress from a Government or public road. I would also set aside the second declaration and substitute the same with the declaration I propose to make.

34. The plaintiff is content with a mere liberty to apply for damages in terms of the Originating Summons. Accordingly, I would set aside the liberty to apply and grant accordingly liberty to apply to the High Court, preferably the same judge with respect to damages as prayed for in the Originating Summons.

35. Finally, it was argued by Mr Ho for the appellant that the plaintiff's claim was statute-barred. Mr Ho relied on the plaintiff's assertion that the Main Path was virtually obliterated in 1981 or 1982 and that its Originating Summons was issued more than 12 years thereafter.

36. Mr Chong for the plaintiff submitted that Government only failed to provide the right of way granted by Additional Special Condition 12 after the expiration of the deadline of 14 days or a reasonable period from 23 May 1995. The judge held that after the Main Path had been obliterated, the limitation period started to run "from the time when Government did not provide the right of way when asked". (Emphasis supplied). There is no appeal from this determination. In my view, the plaintiff's claim based on its right of way granted by Additional Special Condition 12 was not barred at the time when these proceedings were instituted.

37. Mr Ho further sought to take advantage of paragraphs 7, 8 and 9 of Mr Chong's skeleton arguments on limitation. Insofar as these paragraphs may be read as raising facts and contentions inimical to the plaintiff's success, they are mere counsel's submissions, and Mr Chong had categorically set out positively his alternative dates of Government's alleged derogation from its grant.

38. Spoor v. the Green, (1874) LR 9 Exch 99 ; Brown v. flower [1911] 1Ch 219 and Lam Kwok-leung v. AG [1979] HKLR 145 were relied upon by Mr Ho to lend support to the proposition that failure to honour a grant of a right of way was not a continuing breach. Mr Chong, counsel for the plaintiff, offered this court no assistance on any of these cases cited. It is quite unnecessary for this court to pronounce generally upon the nature of a grant of a right of way. Suffice it to say that the purpose for which the right of way was granted by Additional Special Condition 12 in this case clearly envisaged a provision of such a right to the owner for the time being of Lot 753 for the duration of the New Grant. To begin with, it accords with good sense to expect the right of way to run the whole duration of the New Grant. Further, the registered owner for the time being of Lot 753 was enjoined by Additional Special Condition 12 to maintain and repair the path or road constructed for the better enjoyment of the right of way under consideration. That a breach of a covenant to repair is not a continuing breach is virtually untenable. It is inconceivable that whilst a registered owner for the time being of Lot 753 may be held responsible for his failure to honour his continuing obligation to repair, the right for the sustenance of which the obligation to repair was created could be abruptly terminated. The failure of Government in providing a right of way and the failure of the owner to repair must be both continuing breaches. It is my firm view that the Government's failure to provide vehicular transport access under Additional Special Condition 12 in the New Grant constitutes a continuing breach for the purposes of limitation. I need not deal with the inconclusive authorities submitted by counsel for the appellant, which were not, in any case, fully debated.

39. I would dismiss the appeal but would only make the declaration and grant liberty to apply I have proposed. I would also make an order nisi that costs here be paid by the appellant to the plaintiff.

Chan, CJHC:

40. I agree, for the reasons given by Liu, J.A., that the Government is in breach of and has derogated from the grant of right of way under Additional Special Condition 12 of the New Grant and that this appeal must fail. However, it is clear that the declarations made by Sears, J. did not reflect his holding. I agree that they should be varied in the way as proposed by Liu, J.A..

41. The main issue in this appeal is : what is the nature and extent of the right of way granted under New Grant No.8672 by the Crown (now the HKSAR) to the plaintiff's predecessor-in-title in September 1957 ? Counsel for the Government submitted that this was clear from the first sentence in Condition 12, that is, it was a right of way along Crown Land shown coloured yellow on a plan which was the strip of land over Lots 483 and 484. The remaining part of Condition 12, he argued, simply imposed certain obligations on the Grantee. Since, this right of way had always been there, the Government, he said, was not in breach of the grant.

42. With respect, I do not agree. The nature and extent of the right of way turns on a construction of the whole grant including but not restricted to Condition 12. All the circumstances surrounding the grant are relevant matters to its construction. The correct principles are quite succinctly summarised in Halsbury's Laws of England, 4th Ed., Vol.14, para. 149 on p. 71:

"If a right of way is claimed under an express grant which is actually existing, the nature and extent of the right depends upon the proper construction of the language of the instrument creating it. It is for the court to put the true construction upon the words used in the grant, guided, in the absence of any clear indication of the intention of the parties, by the maxim that a grant must be construed most strongly against the grantor.

The construction of the grant depends on the circumstances surrounding the execution of the instrument. Thus, a grant of a right of way per se and nothing else may be a right of footway or a general right of way or a right to any other kind of way, according to the circumstances of the case. Among these circumstances the nature and description of the land or buildings comprising the dominant tenement, and the nature of the place over which the right is granted as it existed at the date of the grant, are always very material considerations."

43. Further, Jessel MR also said in Cannon v. Villars (1878) 8 Ch D 415, at 420:

"As I understand, the grant of a right of way per se and nothing else may be a right of footway, or it may be a general right of way, that is a right of way not only for people on foot but for people on horseback, for carts, carriages, and other vehicles. Which it is, is a question of construction of the grant, and that construction will of course depend on the circumstances surrounding, so to speak, the execution of the instrument. Now one of those circumstances, and a very material circumstance, is the nature of the locus in quo over which the right of way is granted."

44. It is important to note the following circumstances surrounding the New Grant. First, Lot 753 was granted in exchange of a surrender of certain other Lots including Lots 483 and 484. Secondly, Lots 483 and 484 were and still are the only place connecting Lot 753 to the "outside world" and without a passage through these lots, Lot 753 would be land-locked. Thirdly, the first thing in the outside world was, at the time of the grant, the government road which was the Main Path, leading to the Che Kung Temple and other structures in the south-west and to the Shing Mun River and the land beyond in the north and north-east. Fourthly, at that time, there was in the vicinity in the west the construction of a road by the side of a nullah, the Nullah Road. Fifthly, the Grantee was permitted under the New Grant (Condition 2) to build "two residences of not more than two storeys (later modified to three storeys) with garage". Sixthly, there is evidence which was accepted by the trial judge to the effect that there were occasions when vehicles carrying building materials would travel along the Main Path, albeit with some difficulty because of the varying widths at different sections of the Main Path.

45. In my view, it was clearly anticipated at the time of the grant that there would be vehicles coming in and out of Lot 753, for otherwise there would be no point requiring the grantee to build houses with garages. It was also anticipated that at some stage in future, the construction of the Nullah Road would continue and might pass by or near Lot 753. The subsequent correspondence between the Government and the Grantee was entirely consistent with such anticipation. It is under these circumstances that the New Grant contained Condition 12 granting a right of way to the Grantee.

46. The first sentence of Condition 12 cannot be read in isolation. The effect of this condition, when considered in the circumstances surrounding the New Grant, is this. A right of way is granted to the Grantee (together with the grant of Lot 753). It is a right which is exercisable over a yellow strip of Crown land which is the land over Lots 483 and 484. The Grantee is under an obligation to construct a road or path on this strip of land which must meet the approval of the District Commissioner. The Grantee is also obliged to maintain and repair such a road or path. This right of way is to lead from Lot 753 to a government road, which is the Main Path. The Government is entitled to alter the Main Path and in doing so, to absorb a portion of Lots 483 and 484 or to affect the gradient of these two Lots. The Government shall not be liable to the grantee for such alteration, but the Grantee is however obliged to carry out consequential alterations to the road or path which he has constructed.

47. It is significant to note that there is no restriction in Condition 12 or anywhere in the New Grant on the use of the right of way, such as it is to be used only as a footpath and not for vehicular access. The burden is on the Crown (now the HKSAR) to show that it is restricted in use in any particular way. In my view, the Government has failed to discharge this burden. On the contrary, there is every indication that the right of way may be exercised and was intended to be exercised for uses including that for vehicular access. In the absence of any express or implied restriction, the right of way in question is a general right of way. By obliterating the government road and denying vehicular access at the western end of the right of way, the Government is clearly in breach of its grant.

48. However, it is equally clear that nowhere in Condition 12 or indeed the whole of the grant is there a reference to access between Lot 753 and Che Kung Miu Road or any government road, the declarations of the trial judge are therefore not strictly correct. They would also unduly restrict any remedial measures which the Government may see fit to take.

49. Counsel for the Government submitted that the plaintiff's claim was statute-barred. His argument was based on the premise that the doctrine of non-derogation from grant gives rise to implied obligations on the grantor which are analogous to those arising from restrictive covenants. It was submitted that vehicular access, even on the plaintiff's own case, was severed in 1981 or 1982. He relied heavily on the cases of Spoor v. Green (1874) LR 9 Exch 99 and Turner v. Moon [1901] 2 ChD 825 which he said, supported his argument that the breach by the Government was a once for all breach and not a continuous breach and hence the plaintiff's claim was statute barred when the present action was commenced.

50. In Spoor v. Green, of the three judges in the Court of Exchequer, Bramwell, B. took the view that the breach of covenant for title was a once for all breach and completed at the time when the assignment was executed and hence would have been statute-barred. Kelly, CB. taking a different view, held that it was a continuous breach. He drew a distinction between a covenant for title and a covenant for quiet enjoyment. The third judge, Cleasby, B. did not express any view on this. The remarks of Bramwell, B. was accepted by Joyce, J. in Turner v. Moon who held that the breach of the covenant for title in that case was a single, entire, and complete upon the execution of the conveyance.

51. In my view, whether a breach of covenant is a continuing breach or a breach once for all must depend on the nature and purpose of the covenant as well as the nature and manner of the breach. One simply cannot generalise in every case or for every type of covenant. Spoor v. Green and Turner v. Moon can be explained by the special nature of the covenants and their breaches in these cases. In Spoor v. Green, it was an assignment of a lease of coal mines but at the time of the conveyance to the plaintiff, the coals had already been substantially worked out. The grantor did not have title in the coals and was in breach of the covenant of title. It was quite clearly a once for all breach complete at the time of assignment. In Turner v. Moon, the land was bought subject to certain specified rights of way over a road forming part of the property. It was however discovered that there was existing a further right of way over the road. The breach of covenant of title was again complete at the time of assignment.

52. In the present case, it is quite clear that the right of way in question is granted for the enjoyment of the Grantee and his assignees for the remaining term of the lease. Much as the Government is obliged to honour the right of way throughout the term of the lease, the Grantee and his assignees are also obliged to maintain and repair the right of way. Every time the Grantee or his assignee exercises this right and is blocked or refused, there is a breach. There can be no doubt that the breach is a continuing breach. The provisions of the Limitation Ordinance do not apply. The Government's argument on limitation also fails.

Findlay, J. :

53. I agree. I add a few words only because we are differing from Sears J. on the form of the declaration to be made and, perhaps, on when a cause of action arose.

54. I believe the declaration should be in the form proposed by Liu JA. because a declaration of the court on the construction of a grant should deal with, and only deal with, what is in issue between the parties on that construction. In this case, the only issue on the construction of the grant, as Mr Ho accepts, is whether or not the grant gave a right of way for vehicular traffic.

55. On the matter of when the cause of action arose, I agree with Liu JA. that a breach of the grant occurred not only in 1981 or 1982, as the Government contended, or in 1988, as the judge held. There was a continuing breach. In my view, the position is that, from the time when the government began to use its land abutting onto the right of way in such a way as to render the right of way unfit for the purpose for which the grant was made, until the present day, the government has been in breach of the grant and has derogated from it.

56. A breach of a grant is an interference with the exercise of a right granted by it. If that right is exercisable on one occasion only, then the breach occurs when the exercise of that right is prevented. When, as in this case, the right is exercisable from time to time over a period of time, as the grantee chooses, then there is a breach every time the grantee is prevented from exercising his right. In a lease, for example, a covenant to repair is a right subsisting during the period of the lease, and the breach subsists during the period of the lease during which the repairs are not carried out. On the other hand, the covenant to pay rent on a day certain is breached when the rent is not paid on that day, and that covenant is not breached again thereafter.

57. There can be no doubt that the plaintiff has been seeking to exercise its right of way for vehicular traffic in recent times. By this very action in this court, it is seeking to exercise that right. By defending the action, and denying the plaintiff's right to use the right of way for vehicular traffic, the defendant is breaching the covenant and derogating from it. On this basis, there can be no question of the action being time barred.

Chan, CJHC :

58. We formally grant leave to serve the Respondent's Notice and dispense with service thereof on the appellant.

We dismiss the appeal and set aside the declarations and orders made by Sears, J. save for the order for costs. We substitute therefor a declaration that the HKSAR has derogated from the grant of a right of way to the plaintiff by Additional Special Condition 12 of the New Grant, in that it has failed to provide thereunder Lot 753 with any or any effective vehicular access to and egress from a government or public road. We grant the plaintiff the same liberty to apply preferably before the same judge in respect of damages. We also make an order nisi that the plaintiff shall have the costs of this appeal.