CHENG SING KEUNG AND ANOTHER v. CHAN KA HAY AND OTHERS

HCA 2164/2013

[2021] HKCFI 1509

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2164 OF 2013

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J U D G M E N T

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INTRODUCTION

1.  This is the trial of an action among some of the flat owners in a residential estate known as “Eden Garden” located at No 263 Hang Tau, Sheung Shui, New Territories (“the Estate”).  The management company of the estate, the 12^th defendant, is also a party to some of the disputes.

2.  The Estate was put up for sale in around 2005 by the developers, namely Sino Favour Development Limited (“Sino Favour”) and Shiny Develop Limited (together, “the Developers”).

3.  Appended to this judgment is an agreed plan showing the physical layout of the Estate.  The Estate is enclosed by boundary walls, which appear as the thick orange line in the plan.  It has two entrances, a main gate and a side gate (“the Main Gate” and “the Side Gate”). They are marked in blue.  There are ten village-style houses, known as “House 1” to “House 11” (there being no “House 4”).  Each house has three floors. There are 30 flats in total in the Estate. 

4.  The action is primarily about the rights of way over the Main Gate and the Side Gate.  The Main Gate is divided into two parts.  The left part (looking from outside the Estate) is for pedestrian access and the right part is for vehicular access. 

5.  The area coloured yellow and the area coloured yellow and shaded in black are referred to as “the Main Road” and “the Side Road” respectively in the trial.  They are the roads connecting the Main Gate and the Side Gate to the Houses in the Estate.  There are at present 21 car parking spaces on the Main Road. 

6.  In this judgment, I shall refer to the Main Road and the Side Road together as “the open area”.  It is not referred to as “the common area” of the Estate because unlike many other residential estates in Hong Kong, the area is not co-owned by the flat owners as a whole.  The Main Road (save for a small part which is government land and is unmarked in the plan) has been “privately” owned since the development of the Estate, at that time by Sino Favour, and eventually, since September 2013, by the 4^th defendant. The Side Road has all along been in the private ownership of the owners of Houses 3, 5, 6 and 7, with the owners of each House owning the portions in front of that House.

7.  The disputes concern (a) whether the plaintiffs’ have rights of access over the Main Gate and the Side Gate and, if so, whether the access covers both pedestrian and vehicular access, (b) whether their rights were infringed in incidents which allegedly took place in 2008 and 2013, and (c) whether they are liable to pay management fees since July 2008.  (There was originally a counterclaim made by the 3^rd, 4^th, 8^th, 9^th and 12^th defendants that the 1^st plaintiff conspired with other parties to damage some properties in the Estate on 20 April 2009.  On the first day of the trial, the counterclaim was dropped.)

LEGAL OWNERSHIP STRUCTURE

8.  It is convenient to highlight at the outset the legal ownership structure of the Estate.  The Estate sits on various plots of land, including Lots 482, 485 and 487 of Demarcation District No 94 (and the government land mentioned above but that land is not relevant to this action). 

9.  The Main Road is made up of Sections M, O and P and the Remaining Portion of Lot 482, Section B and the Remaining Portion of Lot 485 and Section A of Lot 487.  (The various plots of land will be referred to below in short form which would be self-explanatory.) 

10.  The Main Gate is built over Lots 482O, 482P and 485RP. 

11.  Lot 485RP was owned, sequentially, by (a) Sino Favour from before the development of the Estate to November 2006, (b) then a number of individuals until January 2013, (c) then the 1^st, 2^nd and 3^rd defendants until September 2013, and (d) lastly, the 4^th defendant and up to now.

12.  The Side Gate straddles Lot 482D and Lot 482G.

13.  As shown in the agreed plan, each House is built on a separate section of Lot 482.  Take House 7 as an example.  (The plaintiffs are the owners of the second floor flat and the rooftop of that House.)  The House is located on Section 482E.  In about 2005 when the Estate was put up for sale, the sections were not legally owned by the Developers, but by different individuals. Hence, at that time, the purchaser of each flat was assigned the legal title by the individual owner of the lot on which the House stands.

14.  Take the plaintiffs’ case as an illustration. By an assignment dated 12 January 2006, a Lau Fook Keung as beneficial owner assigned one-third share of Lot 482E together with the exclusive right to occupy the second floor flat and the roof to the plaintiffs.  A deed of mutual covenant was put in place for each House, governing the rights and obligations of the co-owners of the House.  But no DMC was put in place for the Estate as a whole.

15.  The “private” ownership of the open area and the absence of a DMC applicable to the Estate as a whole turned out to be the source of a series of hotly contested disputes over the years.  Some of the owners were engaged in litigation with the Developers over the use and enjoyment of the open area.  These owners commenced an action against the Developers in HCA 2457/2008 in November 2008.  That was followed by an action by Sino Favour against the former in HCA 218/2009 in the following year.  The two actions were eventually settled in July 2012, which, in gist, led to the eventual transfer of the ownership of the Main Road to the 4^th defendant in September 2013.  I shall refer to the litigation between the Developers and those owners concerned as “the Developers action”.

16.  The present action is the upshot of a separate long-drawn dispute between the plaintiffs on the one hand and a number of owners and the management company on the other.

DRAMATIS PERSONAE

17.  The plaintiffs are husband and wife.  As mentioned above, they are the co-owners of the flat on the second floor and the roof of House 7.  The 1^st plaintiff, Mr Cheng Sing Keung, testified at trial.  The plaintiffs were represented at trial by Mr Patrick Chong.

18.  After the commencement of the action, the plaintiffs have settled with some of the defendants.  The trial only concerns the 1^st, 3^rd, 4^th, 8^th, 9^th and 12^th defendants.  The 1^st defendant was represented by Mr Brian Tsui.  The other defendants were represented by Mr Leon Ho.  In this judgment, I shall refer to the 1^st, 3^rd, 4^th, 8^th, 9^th and 12^th defendants as “the defendants”, unless I indicate otherwise.

19.  The dispute over the Main Gate concerns the 1^st, 3^rd and 4^th defendants.

20.  The 1^st defendant was and is still one of the two registered owners of the ground floor flat of House 1.  The 3^rd defendant was but is no longer the registered owner of the second floor flat of House 9.  The 1^st to 3^rd defendants were the registered owners of Lot 485RP.  They transferred the ownership to the 4^th defendant in September 2013.

21.  The 4^th defendant was incorporated in February 2013.  There are 21 shares allotted.  One share is allotted to each owner who is assigned to use one car parking space in the Estate.  The car parking spaces are on the Main Road.  The 1^st defendant is a shareholder.  The plaintiffs are not shareholders of the 4^th defendant.

22.  The dispute over the Side Gate concerns the 8^th and 9^th defendants.

23.  The 5^th to 8^th defendants are the co-owners of House 6 and the 9^th to 11 defendants the co-owners of House 3.  The 5^th to 7^th, 10^th and 11^th defendants have settled with the plaintiffs.  This leaves the 8^th and 9^th defendants as the only co-owners from the two houses challenging the plaintiffs’ claim over the Side Gate. 

24.  The dispute over the 2008 and 2013 incidents concern the 1^st, 3^rd, 8^th, 9^th and 12^th defendants. 

25.  The dispute over the management fees arises from the counterclaim brought by the defendants except the 1^st and 4^th defendants.  In his opening submissions, Mr Ho confirmed that the 3^rd, 8^th and 9^th defendants would no longer pursue the counterclaim.  Accordingly, only the 12^th defendant, who has been the management company of the Estate since July 2006, is now counterclaiming against the plaintiffs for outstanding management fees and expenses since July 2008.

26.  At the trial, the 1^st defendant gave evidence for his case.  Ms Chan Yuet Ho testified on behalf of the other defendants.  Chan resides in one of the flats in House 8.

THE FACTS AND THE PARTIES’ CASES

27.  There is a long history preceding the present disputes.  A number of events which I am going to recount form the backdrop of the disputes and may not be directly presently relevant.  However, it is important to set them out in order to understand the sentiments of the parties. 

28.  The material factual disputes are not extensive.  I shall go through the events in chronological order, setting out the common ground facts in respect of each event and then, where they differ, spelling out the parties’ conflicting factual cases for that event.

Sale of flats by the Developers

29.  The Estate was put up for sale to the public in about 2005.  A sale brochure was produced by the Developers (“the Brochure”). The plaintiffs’ place heavy reliance on this document in support of their claims concerning the rights of way. 

30.  The Brochure consisted of four pages.  A plan appeared on the second page which showed a broad layout of the Estate.  Two gates corresponding to the Main Gate and the Side Gate could be seen on the plan.  The words “消防通道” were marked on the part of the Main Road near the Main Gate.  A few parked cars were drawn on the Main Road.  There was a reference to car parks in the Brochure.  It stated: “園內備有充足車位供住戶及訪客使用”.  At the bottom of the last page of the Brochure, the words “所有資料及圖片只供參考” appeared in small prints.

31.  It is the plaintiffs’ case that they had inspected the Estate in person and they had been given the Brochure before they purchased the flat.  The 1^st defendant’s evidence is that he was given the Brochure at about the same time he signed the provisional sale and purchase agreement.  Chan’s evidence is that she had not seen it at all as her family bought the flat not from the Developers, but in the second hand market.

32.  The flats of the Estate were apparently sold over a period of time.  For instance, the 1^st defendant became the registered owner of his flat in July 2005.  He moved in in about August. Chan’s family purchased the flat in November 2005 and moved in in the following month.  The plaintiffs completed their purchase in January 2006.

33.  According to the assignments, the ten plots of land on which the Houses were built had been owned by different individuals. These individuals then assigned the respective legal titles of the land to the purchasers of the Estate. 

34.  Mr Chong submitted at closing that these individuals were “Dings” who acted as agents or trustees of the Developers and held the plots of land for them.  The plaintiffs say that the Developers should be treated as having owned the entire Estate before they sold the flats to the public in 2005. 

35.  Mr Chong relied on the following:

a.  The Estate was enclosed by boundary walls notwithstanding that the lots were then owned by different individuals.  The Estate was marketed by the Developers as one single development.  The Developers were responsible for the sale of all the flats.

b.  It is therefore a typical case of a property developer entering into a developer agreement with the Dings.

c.  In fact, in her witness statement, Chan stated that the Developers “or their agents owned all of the Estate before 2005” and that, further, after the flats were sold, the open area was still “owned by Sino Favour or agents of the Developers, namely, [Tse Chun Shang, Cheung Che Shing and Tse Chi Wah]”.  Mr Chong submitted that Chan obviously had personal knowledge of these matters given that she was involved in the Developers action and the consequent negotiations.

36.  Both Mr Tsui and Mr Ho objected to Mr Chong running this case.  They complained that the alleged Ding arrangement was not pleaded at all and as a result no evidence was adduced by any party on this. It was raised for the first time in Mr Chong’s opening submissions.  It should not therefore be open to the plaintiffs to advance their claims on this factual premise. 

37.  LT Management Services Limited was the first property manager of the Estate.  It published two sets of rules – the residents’ rules (“住戶守則”) and the car park rules (“車位守則”).  Paragraph 16 of the residents’ rules provided that the car parking spaces in the Estate were reserved for use by the owners, the residents and their visitors and all users must abide by the car park rules.  Paragraph 1 of the car park rules provided that save for vehicles which had car park permits issued by the Estate or unless with the permission of the management office, no vehicles would be allowed to enter the Estate. 

38.  In cross-examination, however, the 1^st defendant confirmed that he only received the residents’ rules after he purchased the flat.  Chan also said that she had never received the residents’ rules or the car park rules.  The 1^st plaintiff said that he had never seen the car park rules.

The 2005 Deed

39.  A Deed of Grant of Right of Way was executed on 1 August 2005 (“the 2005 Deed”).  The parties were the then owners of Lot 482D (House 6), Lot 482E (House 7) and Lot 482G (House 3) together as grantors and Sino Favour as grantee.  In the agreed facts, counsel referred to the three lots as “the servient tenement”.  In the deed, a number of plots of land were identified as “the dominant tenements”.  They included the plots which made up the Main Road (save Lot 487A).

40.  Paragraph 3 of the Recital stated:

“The Grantors have and each of the Grantors has agreed to grant the Grantee such right of way as is hereafter contained.”

41.  The material paragraphs of the deed provided as follows:

“1.  The Grantors and each of the Grantors as beneficial owners or owner of the servient tenements hereby grant or grants unto the Grantee full right and liberty for the Grantee and its successors in title the owners and occupiers for the time being of the dominant tenements or any part thereof and its or their respective servants and licensees (in common with the Grantors and all others having the like right) at all times hereafter by day or night to pass and repass along over and upon the servient tenements which for identification are more particularly set out in the plans attached hereto and thereon coloured Yellow hatched black and marked “HY” with or without vehicles and with or without animals for all purposes connected with the use and enjoyment of the dominant tenements but not for any other purpose whatsoever to hold the said right of way unto to Grantee for the residue of the terms of years of the Government Lease in relation to the servient tenements.

2.  The Grantee is entitled to grant a licence for the use of the servient tenements for the said purpose of pass and re-pass over the servient tenements to the occupiers of SUB-SECTION 1 OF SECTION B OF LOT NO. 482, SUB-SECTION 1 OF SECTION C OF LOT NO. 482, SECTION F OF LOT NO. 482, SECTION K OF LOT NO. 482, SECTION L OF LOT NO. 482 and SECTION J OF LOT NO. 482 [ie Houses 8, 9, 10, 1, 2, 11 respectively] all in DEMARCATION DISTRICT NO. 94, NORTH, NEW TERRITORIES.” (italics added)

42.  The circumstances in which the 2005 Deed was executed are not known.  It was executed in August 2005.  By then, the Developers had already put up the Estate for sale and the 1^st defendant had acquired the legal title of his flat in July.  The Developers were not before the court in this action.  None of the witnesses knew about the deed at the time. 

43.  The plaintiffs rely on the 2005 Deed as one of the bases on which to claim the right of way over the Side Gate.  Mr Chong submitted that as a matter of construction, there was a mutual grant of rights as between the grantors and the grantee under the 2005 Deed.  He relied on the words “in common with the Grantors” (as italicised in the above extract). The owners of Houses 3, 6 and 7 granted to Sino Favour and each other a right of way over their respective open areas.  Mr Chong argued that that must have been the intention of the parties, so that they could all enjoy the Side Road and the Side Gate, whether on foot or by vehicles.

44.  Mr Chong’s reasoning is as follows.  First, the words are very clear.  Secondly, if the intention was otherwise, the italicised words would be otiose.  Thirdly, the three lots of land were in fact owned by the Developers notwithstanding that they were registered in the name of some individuals.  The intention of the Developers and those individuals must have been that the owners of the three lots could freely use each other’s land as right of way.  Fourthly, the residents of Houses 3 and 6 would not have any access to the Main Road and the Main Gate if they did not have the common right to go via the Side Road.  Fifthly, it is plain that the intention was that the Developers attempted to perfect the legal arrangement for the right of way over the three lots of land so that all the residents of the Estate could enjoy the Side Road and the Side Gate.

45.  On the contrary, Mr Ho submitted that as a matter of construction, the grant under the 2005 Deed was a grant to Sino Favour only.  This is made plain by para 1 of the Deed which stated that it was a grant made by “[t]he Grantors and each of the Grantors as beneficial owner or owner of the servient tenements” to “the Grantee”.  The owners of Lots 482D, 482E and 482G were expressly labelled as “the Grantors”.  To adopt the plaintiffs’ construction is to do violence to the language of that paragraph. Furthermore, there is no evidence before the court which would shed light on the objective intention of the parties to the deed as none of them were called to give evidence.  In the absence of such evidence, it is not open to the plaintiffs to speculate.  The objective reading of the 2005 Deed is that the owners of Houses 3, 6 and 7 are not granted any right of way.

46.  As a further point in support of the above construction, Mr Ho argued that if the 2005 Deed was to facilitate all residents of the Estate to have access over the Side Road, each of the Houses should be treated in the same way.  However, under the plaintiffs’ construction, the owners of Houses 3, 6 and 7 would have access right over the Side Road whereas the owners of the other Houses might be entitled to a licence for the use of the Side Road if Sino Favour chose to grant one.

The Mutual Aid Committee and the appointment of the 12^th defendant as manager

47.  In 2006, disputes arose between the owners and the Developers.  The Developers contended that the owners and their visitors may not park inside the Estate.  The owners complained that there was no DMC in place governing the powers and responsibilities in respect of the open area. There was also a complaint that part of the open area was actually government land.

48.  By notice dated 29 March 2006, Sino Favour announced that it would commence building works for Eden Garden Phase 2 at the east of the Estate, and that some of the parking spaces would be cancelled and part of the boundary wall would be demolished and replaced by an iron gate so as to allow access for construction vehicles and workers to go to the new site through the Estate.  In May of the same year, the contractor for the new phase excavated the land at part of the boundary wall.  An iron gate was installed.

49.  Against this background, a notice of meeting dated 21 May 2006 was sent to the owners by, among others, the 1^st plaintiff, the 1^st defendant and Chan.  The purpose of the meeting was stated to be the forming of a mutual aid committee of the owners and the election of its chairman, treasurer and secretary. 

50.  The meeting was held on 4 June 2006.  It was agreed that a Mutual Aid Committee of Eden Garden Owners (“the MAC”) shall be formed.  On the same day, the owners of all 30 flats signed a document entitled “住戶守則” (“the Owners’ Rules”).  They acknowledged that they would be bound by these rules.

51.  The Owners’ Rules included the following provisions:

“ 住戶守則

本屋苑將成立管理委員會，現制定相關住戶守則，以增強本屋苑之有效管理。詳情如下：

1. 處理事務的規條以《建築物管理條例》（第344章）為藍本；

2. 共同負擔屋苑日常運作及管理支出，並依照單位數目進行攤分；

3. 共同承擔屋苑責任及義務；

4. 任何投票議決事項皆以出席業主過半數為依歸每戶一票；

5. 遵守委員會大會的議決；

6. 如進行單位買賣，舊業主有責任向新業主提供此文件及遵守此守則；

7. 議案如得到過半數委員同意，即屬通過。”

52.  The MAC was subsequently registered under the Societies Ordinance, Cap 151, in June 2006.  The 1^st plaintiff was the chairman of the MAC.  The 1^st defendant and Chan were its treasurer and secretary respectively.

53.  It is the plaintiffs’ case that the terms of the Owners’ Rules were finalised after the meeting.  According to a letter from Sit, Fung, Kwong and Shum dated 9 June 2006, clause 7 of the Owners’ Rules were subsequently added.  As such, the plaintiffs contend that the Owners’ Rules had not been properly passed in the meeting.  It cannot therefore be binding on the plaintiffs whether in his capacity as members of the MAC or as owners.

54.  On the contrary, it is the case of the 3^rd, 4^th, 8^th, 9^th and 12^th defendants that the Owners’ Rules were signed before the MAC came into existence. Chan expressly confirmed that to be the case in cross-examination.  The lawyer from Sit, Fung, Kwong and Shum attended the meeting as a witness.  It was only after the owners had agreed to take up the responsibilities that they then proceeded to form the MAC.  Chan also confirmed that clause 7 was subsequently added to the Owners’ Rules.

55.  On 15 July 2006, a meeting of the MAC was held. The MAC voted in favour of appointing the 12^th defendant as the manager of the Estate.

56.  On 16 July 2006, the MAC signed a management agreement with the 12^th defendant and appointed the latter as the manager of the Estate (“the 2006 Management Agreement”).  It was signed by the 1^st plaintiff on behalf of the MAC.

57.  As treasurer, the 1^st defendant says that his duties were to receive management fees from each owner, pay them to the 12^th defendant and produce a monthly account of the income and expenditure of the MAC.  He assumed such duties without any reward.

The 2006 Deed

58.  A Deed of Grant was executed on 25 October 2006 (“the 2006 Deed”).  The parties were Sino Favour as grantor and all the then co-owners of the Houses as grantees.  The deed was executed by Sino Favour only.

59.  The relevant parts provided as follows:

“WHEREAS :-

A. The Grantor is the registered and beneficial owner and in possession of the property as more particularly described in the Third Schedule hereto (“the 1^st Property”).

B. The Grantee is the registered and beneficial owner and in possession of the property more particularly described in the Fourth Schedule hereto (“the 2^nd Property”).

C. At the request of the Grantee, the Grantor has agreed to grant to the Grantee the right to use a portion of the 1^st Property in manner hereinafter contained.

NOW THIS DEED WITNESSETH AS FOLLOWS :-

1. The Grantor hereby grants unto the Grantee a full and uninterrupted right and liberty for the Grantee and his successors in title and assigns the owners and occupiers for the time being of the 2^nd Property or any part or parts thereof and his tenants servants and licensees at all times hereafter by day or night to use and enjoy ALL THAT the PORTION of the 1^st Property (“the said Open Space”) or any part or parts thereof which said Open Space is for identification purpose only shown and hatched black on the plan hereto annexed for the purpose of ingress to and exit from the 2^nd Property TO HOLD the said right and liberty herein granted unto the Grantee for the residue of the term of years created by the Government Lease under which the said Open Space is held from the Government.”

60.  The “1^st Property” included Lot 482P and Lot 485RP and other plots of land outside the Estate.  The “2^nd Property” included the 10 plots of land over which the 10 Houses were built. 

61.  Paragraph C of the recital stated that it was “[a]t the request of the Grantee” that Sino Favour had agreed to grant to the then co-owners of the Estate the right to use a portion of the “1^st Property”.  Notwithstanding that express wording, none of the witnesses knew about the deed at the time.  The Developers were not before the court in this action.  The exact circumstances in which Sino Favour executed the 2006 Deed are not known.  It is also not known why some plots of land outside the Estate were included in the 2006 Deed as well.

62.  The plaintiffs rely on the 2006 Deed as one of the bases on which to claim the right of way over the Main Gate.  (The Main Gate is situate at Lots 485RP, 482O and 482P.  The 2006 Deed however does not cover Lot 482O.)

63.  Mr Chong highlighted the following clauses in the deed:

a.  “a full and uninterrupted right and liberty”;

b.  “day or night”; and

c.  “to use and enjoy … for the purpose of ingress to and exit from the 2^nd Property”.

64.  Mr Chong submitted that it is beyond doubt that the plaintiffs have the right to pass and repass over the Main Gate on foot “for the purpose of ingress to and exit from” their flat.  The right also includes vehicular access.  Where a road was built for vehicles, a grant of a right of way over it should be presumed to cover the use of vehicles: Cannon v Villars (1878) 8 Ch D 415, 420-421; Man Wa Tong v Shih Chao Jung [2020] HKCFI 417, paras 19-20.  The Deed contained no words of limitation to cut down the generality of the right of passage, just like the deed in TLC Trade Land Co Ltd v Samuel N Co Ltd [2005] 2 HKLRD 756, paras 27-28.  If Sino Favour wanted to exclude vehicular access from the grant, it would be very easy for it to expressly limit the right of way to pedestrian access only.  But it did not do so.  The right was “a full and uninterrupted right and liberty”.

65.  On the other hand, Mr Ho highlighted in his submissions that pursuant to the 2006 Deed, Sino Favour granted a right of way to the owners of the Houses over only a small part of the Main Road, namely Lot 482P, Lot 485RP and Lot 487, together with some lands situated outside the Estate. 

66.  For the plaintiffs to enter the Estate via the Main Gate and then to go to their flat in House 7, the plaintiffs would have to go past Lot 482P, Lot 485RP, Lot 482O, Lot 485B, Lot 482RP and, lastly, Lot 482M.  However, under the 2006 Deed, the last four lots of land (“the Uncovered Land”) were not included in the grant.  Hence no right of way was created under the deed over the Uncovered Land. 

67.  Given that the 2006 Deed was executed to allow the owners to go over the Developers’ land for the purpose of ingress to and exit from their houses, it therefore follows that the deed did not have the effect of creating a vehicular right of access over the Main Road or the Main Gate.  To construe otherwise would be absurd because the owners have no vehicular right of way over the Uncovered Land, yet they must pass through the Uncovered Land before accessing Lot 485RP when they leave the Estate from their Houses.

68.  Furthermore, when the 2006 Deed was executed, the Main Road has been used as a car park, leaving insufficient space for any vehicle to pass.  It has never been intended for vehicles to pass and repass generally.  The Estate is a residential estate.  There should not be any frequent or heavy loading of goods or people.  It is submitted that clearly there is no reasonable need for the owners to enjoy a vehicular right of way to get to and exit from the Houses.

The dispute with the Developers and the Developers action

69.  Returning to the disputes between the owners and the Developers, the developers of phase 2 damaged some properties within the Estate in July and August 2006.  The passages inside the Estate were blocked. The opinions of the owners as to how to handle the matter were divided.  Some owners, including the 1^st, 3^rd, 8^th and 9^th defendants, wanted to take legal action against the Developers while others, including the plaintiffs, preferred not to litigate.  The plaintiffs were particularly concerned about the litigation costs in the event that the owners lost in the litigation.

70.  In the midst of such disputes, on 21 July 2007, the 1^st plaintiff gave notice that he would step down as chairman of the MAC and the plaintiffs ceased to be members of the MAC on 22 July 2007. 

71.  The plaintiff informed the 12^th defendant that they no longer required the latter’s service by email dated 28 October 2007.

72.  In November 2008, in view of the continuous interruption due to the construction works in the phase 2 project, some of the owners commenced the High Court action against the Developers.

73.  In July 2012, the parties reached a settlement agreement in the Developers action.  A Tomlin order was made.  In gist, under the settlement agreement, the plots of land making up the Main Road were transferred to the owners involved in the litigation in 2013.  According to Chan, over $3 million was spent to acquire the Main Road and on legal expenses incurred in the Developers action.

74.  The 4^th defendant was incorporated in February 2013.  The Main Road was eventually assigned to the 4^th defendant. 

The relationship turned sour in 2007

75.  The plaintiffs did not pay the management fees in April to June 2006. 

76.  Further, the plaintiffs have not paid the monthly management fees since September 2007.  At that time, the management fee was $600 per month.  It was increased to $800 since April 2016.  Over the years, repair works were done in the Estate.  Each owner made contribution in the sum of $13,000, save the plaintiffs and another owner.

77.  In November 2008, Chan and some other owners commenced proceedings in the Small Claims Tribunal against the plaintiffs claiming outstanding management fees and repair contribution.

78.  After trial, the Tribunal held that the plaintiffs ceased to be a member of the MAC upon giving three months’ notice and they should pay all outstanding management fees prior to the termination. The Tribunal was of the view that the plaintiffs decided to opt out of the MAC and not to pay the management fees not because they wanted to obtain benefit without paying for it.  Instead it was out of their genuine belief that the MAC did not have any legal basis for their claims against the Developers.

79.  Following the ruling, the plaintiffs had paid the outstanding management fees as ordered by the Tribunal.

80.  The 12^th defendant now claims against the plaintiffs for outstanding management fees and expenses.  Its cause of action is based on the 2006 Management Agreement.

81.  The agreement contained the following provisions:

“（一）經理人職責範圍：

1.  經理人之權力、職務及責任原則上與大廈公契及建物管理條例344章所賦予該廈經理人之權力與義務相同，並按照公契所訂條款相應執行其工作。

2.  如有任何業主欠交管理費、大廈維修分攤費、基金、按金或公契上指定應付之一切費用，當經理人發出書面催交信過期付仍未繳付者，經理人得到業主立案法團書面授權才可有全權入稟法庭向欠費業主追討有關欠費。” (underline added)

82.  It is the case of the 12^th defendant that the plaintiffs have all along been parties to the 2006 Management Agreement personally.  This is because at the time of the signing of the agreement, the 1^st plaintiff was the chairman of the MAC and he signed the agreement as an agent of all the then owners, including himself and the 2^nd plaintiff.

83.  Under the express contractual provisions of the agreement, the 12^th defendant was given the right that is in principle exercisable by a manager as defined in the Building Management Ordinance, Cap 344, and that includes the right to collect expenses from individual owners of the Houses.  It is therefore submitted that the 12^th defendant has a direct cause of action against the plaintiffs in the event of non-payment of fees and expenses. 

84.  It is the plaintiffs’ case that the 2006 Management Agreement has been superseded by subsequent management agreements although they are not able to produce copies of any such subsequent agreements.  The plaintiffs point out that the 1^st defendant accepted in cross-examination that there were management agreements signed subsequent to the 2006 one.  According to an email in July 2007, an MAC meeting was scheduled to resolve, among other things, to sign a new management agreement. Furthermore, it would appear that a new management agreement was signed following the adjustments in management fees in April 2011 and April 2016.

85.  On the other hand, Mr Ho argued that under the Owners’ Rules, the plaintiffs have the contractual obligation to share expenses and responsibilities of the Estate.  The obligation does not depend on whether the plaintiffs required the service of the 12^th defendant, or whether the plaintiffs were members of the MAC.  Under the terms of the Owners’ Rules, the plaintiffs cannot unilaterally terminate their contractual relationship with the other owners.

The alleged interference in 2008

86.  From the beginning, the pedestrian part of the Main Gate was locked by keys. 

87.  In March 2008, the key lock was changed to a door lock system which required a passcode to gain access.

88.  The plaintiffs say that they were not given the passcode but they managed to obtain it from friendly neighbours.  The plaintiffs contend that by not giving them the passcode, the 1^st, 3^rd, 8^th, 9^th and 12^th defendants had interfered with their rights of way over the Main Gate. 

89.  They say that the court should take into account the hostility between the parties at the time, in particular the dissatisfaction with the plaintiffs not paying the management fees.  Mr Chong submitted that in cross-examination, the 1^st defendant and Chan were evasive as to who actually made the decision not to give the door code to the plaintiffs.  The 1^st defendant was the treasurer and Chan the secretary of the MAC at the time.  The 1^st defendant was involved in the management.  In the circumstances, it was submitted by the plaintiffs that the court should have no difficulty in finding that the defendants were involved in the making of the decision not to give the door code to the plaintiffs.  If necessary, the court should make adverse inference against the 3^rd, 8^th, 9^th and 12^th defendants for not giving evidence on this issue.

90.  In his witness statement, the 1^st plaintiff said that in March 2008, the 12^th defendant did not inform him of the new door code but his friend gave it to him.  It was only in his oral testimony that the 1^st plaintiff said that he had asked the 12^th defendant for the door code but it refused to give it to him.  When asked why he did not say so in his witness statement, he attributed the omission to his lawyers.  The 1^st plaintiff further said in cross-examination that he did not request the door code from any of the other defendants.

91.  The 1^st defendant says that he took no part at all in the replacement of the keys to the pedestrian gate by a door code.  The plaintiffs never requested the 1^st defendant to provide them with the door code.  There was no agreement between the 1^st defendant and the other defendants not to give or inform the plaintiffs of the door code.  It was not his decision not to provide the door code to the plaintiffs.  In fact, the 1^st defendant was among the residents who were informed of the new door code by the 12^th defendant.  In any event, the 1^st defendant was under no duty to give or inform the plaintiffs of the door code.

92.  The position of the 3^rd, 8^th, 9^th and 12^th defendants on the 2008 incident is as follows.

93.  Mr Ho submitted that for the plaintiffs to make out their case of interference, they must show substantial interference.  He relied on West v Sharp (2000) 79 P&CR 327 at 332:

“There must be a substantial interference with the enjoyment of it. There is no actionable interference with a right of way if it can be substantially and practically exercised as conveniently after as before the occurrence of the alleged obstruction.”

94.  On the 1^st plaintiff’s own evidence, the plaintiffs could still enter and exit the Estate after March 2008.  There was therefore no interference, let alone substantial interference, with the enjoyment of the right of way.

The alleged interference in 2013

95.  In January 2013, the 1^st, 2^nd and 3^rd defendants became the registered owners of Lot 485RP where the Main Gate is located.

96.  On 31 March 2013, the 1^st defendant tendered his resignation as the treasurer of the MAC.

97.  In July 2013, the lock to the pedestrian gate was changed to a smart card system requiring a key card to gain access.

98.  On 21 July 2013, a meeting of the MAC was held. It was attended by, among others, the 1^st, 3^rd, 8^th and 9^th defendants, Chan and the 12^th defendant’s representative.  It was resolved that the key cards to the pedestrian gate would not be issued to those in default in paying the management fees, unless the defaulting owners settled all the outstanding fees.

99.  The resolution read:

“商討及議決追收上述維修工程費用及管理費事宜

屋苑單位: … 7座2/F，長期欠交管理費及是次屋苑維修工程費用，根據我司記錄：

…

7座2/F    由2006年4月1日 至 2013年7月31日共拖欠管理費74個月，合共HKD44,187.10，維修工程費HKD13,000.00 (2008年 砌牆 HKD2,000.00，2012年 公眾電燈 HKD1,000.00，2013年 大維修 HKD 10,000.00)

以上欠費業戶的行為已嚴重影響其他業戶的權益及屋苑之正常管理運作。故此大會上，各業主一致決議屋苑沒有責任再提供任何服務與欠費之業戶，並且不獲派發新門閘匙，直至欠費業戶繳清所有拖欠費用為止。” (underline added)

100.  The plaintiffs say that despite repeated demands, the MAC and the management company refused to issue a key card to them. They had to resort to asking their friendly neighbours to open the gate for them on a daily basis when they returned home for the day. 

101.  The plaintiffs therefore say that the defendants took an active part in interfering with their right of way over the Main Gate.

102.  The 1^st defendant’s stance on the alleged interference is that he was just attending the MAC meeting to pick up the key card.  At that time, he was no longer an active member of the MAC.  He was just an ordinary member.  He did not vote for any resolution not to give the key card to the plaintiffs.  Nor did he indicate any views on the matter at all.  Mr Tsui referred to an email dated 10 January 2014 from the 1^st defendant to the owners stating that he did not express any view in the meeting.

103.  Similar to his stance on the alleged interference in 2008, the 1^st defendant says that he took no part at all in the implementation of the smart card system for the pedestrian gate. The plaintiffs never requested the 1^st defendant to provide them with the key card.  The 1^st defendant did not have any spare key card which he could give to the plaintiffs.  And there was no agreement between the 1^st defendant and the other defendants not to give the key card to the plaintiffs.  In any event, the 1^st defendant was under no duty to give the plaintiffs the key card.

104.  The position of the other defendants is as follows.

105.  Mr Ho submitted that the plaintiffs were able to access House 7 with the help of their friends.  Hence, there was no substantial interference with their rights of way.  Furthermore, the plaintiffs’ alleged inability to enter the Estate via the pedestrian gate was self-induced.  The plaintiffs have all along maintained that they did not need management services.  However, the provision of the key card was clearly part of the management services.  Mr Ho therefore submitted that the claim for damages should be dismissed.  Alternatively, the plaintiffs should be entitled to nominal damages of $1 only.

106.  In October 2013, the plaintiffs, through their solicitors, issued a demand letter to the MAC and the 12^th defendant requesting them to stop interfering with the plaintiffs’ right of access over the Main Gate.

107.  In November 2013, the plaintiffs commenced the present action.

Since the commencement of the action

108.  At the same time when the present action was commenced, at the inter partes hearing of the plaintiffs’ application for an interlocutory injunction, the defendants gave an undertaking that they would provide the plaintiffs with the key card to the pedestrian gate upon payment of a deposit and, further, that they would open the vehicular gate upon the plaintiffs giving reasonable notice to the 12^th defendant.

109.  In July 2017, the 4^th defendant issued a notice notifying the plaintiffs of suspension of various services to their premises including but not limited to letterbox, staircase lighting, cleaning, garbage collection and other supporting services.

THE PLAINTIFFS’ CLAIMS

110.  The plaintiffs contend that they enjoy rights of way over the Main Gate and the Side Gate and in each case the rights cover both pedestrian and vehicular access.  The defendants agree that the plaintiffs have a right of way over the Main Gate but the right is confined to pedestrian access only.  They disagree that the plaintiffs enjoy any right of access by vehicle over the Main Gate.  As regards the Side Gate, the 1^st defendant adopts a neutral position whereas the other defendants deny that the plaintiffs enjoy any right of way over it at all, whether pedestrian or vehicular.

111.  In support of their claims, the plaintiffs rely primarily on proprietary estoppel and implied grant.  As their alternative case, they rely on the 2005 Deed (in respect of the Side Gate) and the 2006 Deed (in respect of the Main Gate). 

112.  If the court rejects all of these bases, the plaintiffs pray in aid the doctrine of necessity as follows.  If the plaintiffs do not have any right of way, with or without vehicle, over the Side Gate, they should have a vehicular right of way over the Main Gate by reason of necessity.  Alternatively, if they do not have any right of way, with or without vehicle, over the Main Gate, the plaintiff should have a vehicular right of way over the Side Gate, again, by reason of necessity.

Proprietary estoppel

113.  The plaintiffs’ primary case is that such rights of way arise by proprietary estoppel. 

114.  By reason of the physical condition of the Estate and the Brochure, the Developers must have intended to allow all the owners, the residents and their visitors to access the open area as common passage, comprising the Main Road, the Side Road, the Main Gate and the Side Gate, whether on foot or with vehicles.  The physical condition of the open area and the Brochure constituted the requisite representations made by the Developers.  It is emphasised by the plaintiffs that the Estate is a residential estate and the Main Road and the Side Road are wide enough for vehicular access.  It would therefore be most unusual that vehicular access would be left at the mercy of the Developers.   And for the defendants to suggest that the owners do not have vehicular access is quite extraordinary.  The plaintiffs make clear that they are not asking for parking rights within the Estate.  An owner might not have a car.  But it does not mean that it was never intended that he cannot have a taxi dropping him off right in front of his house, or have delivery trucks unloading furniture there.

115.  Mr Chong also submitted that given the defendants’ acceptance that the plaintiffs should enjoy pedestrian rights over the Main Gate, it would be unreal for them to suggest that the vehicular rights should be treated differently.

116.  Further, there was no express reservation by the Developers. They did not at any time say that they would retain a residual discretion to grant the vehicular access.  One would expect that the purchasers would be informed of such important reservation before they committed themselves to the purchase.

117.  Mr Chong submitted that the 1^st, 3^rd and 9^th defendants cannot argue otherwise because it was their pleaded case in the Developers action that the open area was intended by the Developers to be common area to be used by the owners and for the reasonable enjoyment of their flats.  Their express plea must have included the enjoyment of the open area both with or without vehicles.  The defendants cannot now conveniently ignore their pleaded case in the Developers action and advance a different case when it suits their purpose in their fight against the plaintiffs here.

118.  But for the representations made by the Developers, the plaintiffs would not have bought their flats without such basic and fundamental rights.  It would be absurd to suggest otherwise.  The Developers were clearly estopped from denying the plaintiffs such fundamental rights. 

119.  The 1^st to 3^rd defendant and, subsequently, the 4^th defendant, being the successors of the Developers, took over the lands with notice of the estoppel and are clearly bound by it.

120.  In reply to that, Mr Ho submitted that the pleas made by the relevant defendants in the Developers action only reflect the position of those owners back in 2009.  The position might or might not be legally sound.  In the end, the owners had to pay a substantial sum to the Developers in consideration of the assignment of the Main Road to them.  It would suggest that the owners’ then contention was in effect unsuccessful.

Implied grant

121.  The plaintiffs also contend that the rights of way over the Main Gate and the Side Gate arise by way of implied grant.

122.  The starting point is that all the lands within the Estate were owned by the Developers or their agents.  When the Developers sold the flats to the plaintiffs, there must be an implied grant on the part of Sino Favour to allow both pedestrian and vehicular access over the Main Gate and the Side Gate.  This is because (a) the Main Road and Side Road were already built and their use was continuous and apparent, (b) vehicular access is necessary for the reasonable enjoyment of the land, and (c) the Main Road and the Side Road were used to serve the Houses within the Estate.  Applying the rule in Wheeldon v Burrows as explained in Loyal Luck Trading Ltd v Tam Chun Wah [2008] 4 HKLRD 681 at para 36, there arises an implied grant of rights of way.

Necessity

123.  The plaintiffs also contend that the rights of way over the Main Gate and the Side Gate arise by necessity.  See para 112 above.

The 2005 Deed

124.  Alternatively, in respect of their claim on the Side Gate, the plaintiffs rely on the 2005 Deed.  See paras 43 to 44 above.

The 2006 Deed

125.  Alternatively, in respect of the claim on the Main Gate, the plaintiffs rely on the 2006 Deed.  See paras 63 to 64 above.

Reliefs in respect of the rights of way

126.  On the above premises, the plaintiffs seek the following declarations:

a.  The plaintiffs and their assigns, successors-in-title and their tenants together with their servants and licensees do have a right of way over the Main Gate located in Lot 485RP and Lot 482P granted under the 2006 Deed, including the right of vehicular access.  This includes the right to stop vehicles in order to turn them round and to load or unload goods or passengers.

b.  The plaintiffs and their assigns, successors-in-title and their tenants together with their servants and licensees do have a right of way over the Side Gate located in Lot 485D and Lot 482G granted under the 2005 Deed, including the right of vehicular access.  This includes the right to stop vehicles in order to turn them round and to load or unload goods or passengers.

c.  The plaintiffs and their assigns, successors-in-title and their tenants together with their servants and licensees do have a right of way over (a) the Main Gate located in Lot 485RP, Lot 482P and Lot 482O, and (b) Lot 482D and Lot 482G, including the right of vehicular access.  This includes the right to stop vehicles in order to turn them round and to load or unload goods or passengers.

127.  The 1^st defendant’s position with regard to the Main Gate is that the plaintiffs’ claim of right of way does not concern him at all as the latter has divested all his interest in the lands on which the Main Gate is located since September 2013. 

128.  In any event, Mr Tsui submitted that the intention of the Developers, as alleged by the plaintiffs in support of their proprietary estoppel argument, is unparticularised and not supported by evidence.  Insofar as the plaintiffs rely on the Brochure to make good the point that there was a representation on the right of way over the Main Gate, Mr Tsui argued that such representations are clearly equivocal and cannot sustain a plea of proprietary estoppel.  He pointed out that the Main Road was described as “消防通道” in the Brochure.  There was no suggestion in the Brochure that it was to be used freely by the owners.  In any event, the so-called representations may equally support an inference that the Developers only intended to confer a licence on the owners to use the Main Road, whether on foot or by vehicle.

129.  Mr Tsui submitted that the implied grant argument must fail because Lot 482E (ie the lot on which House 7 is built) and Lot 485RP (on which the Main Gate is built) were not granted by the same grantor to the plaintiffs and the 1^st defendant at the same time.

130.  The position of the other defendants on the alleged rights of way is as follows. 

131.  In respect of the claim of proprietary estoppel, no particulars are provided in the statement of claim.  The physical condition of the Estate per se cannot possibly amount to a representation.  The Brochure does not necessarily reveal any intention as contended for by the plaintiffs.  At the bottom of the Brochure, it was stated that the information was only for reference only.  There was definitely no representation that the plaintiffs could enjoy any vehicular right of way unconditionally. The Brochure and the physical layout at most show that vehicles can park on and pass around the Main Road.  They are however silent on the legal basis on which the vehicles can do so.  Moreover, Mr Ho submitted that no reliance and no detriment is pleaded in the statement of claim.  Lastly, the plaintiffs can enter the pedestrian gate on foot.  It is perfectly feasible for an owner to live in the Estate without any vehicular right of way.

132.  In respect of the alleged implied grant, Mr Ho submitted that first of all there is no pleaded case for such a cause of action and further that it is simply not necessary for the plaintiffs to have vehicular access all the way up to the entrance of House 7.  Many multi-storey buildings do not allow vehicular access up to the building entrances.  The plaintiffs do not have a car park space assigned to it on the Main Road.

133.  As far as the proprietary estoppel claim over the Side Gate is concerned, Mr Ho submitted that Sino Favour was not the owner of Lot 482D and Lot 482G.  The individuals then owning the lots did not make any representation to the plaintiffs. 

The alleged interference in 2008 and 2013

134.  The plaintiffs contend that the conduct of the relevant defendants in 2008 and 2013, as set out in paras 88 to 90 and 98 to 101 above, amount to nuisance.  Even though there was no damage done to the plaintiffs’ flats and the plaintiffs suffered no financial loss, the conduct amounted to interference with their easement.  They are entitled to damages for the inconvenience caused as a result: Sara and Dovar, Boundaries and Easements (7^th ed) at para 24-050.  The plaintiffs claim the sum of $70,000 for both incidents.

135.  Given the history and hostility between the parties, which is still continuing, the plaintiffs also seek a permanent injunction in this regard.

THE COUNTERCLAIM

136.  As pleaded, the counterclaim was brought by the defendants except the 1^st defendant against the plaintiffs for outstanding management fees and expenses due from April 2006.  In his written opening submissions, Mr Ho confirmed that the counterclaim should be confined to management fees and expenses due from July 2008 onwards as the claim for the period before that is time-barred.  In his oral opening submissions, Mr Ho further confirmed that in light of the ruling of the Small Claims proceedings, the counterclaim for management expenses would be pursued by the 12^th defendant only.

137.  The 12^th defendant now claims the following sums from the plaintiffs:

a.  Monthly sum of $600 from July 2008 to March 2016, totalling $55,800;

b.  Monthly sum of $800 from April 2016 to the date of judgment;

c.  Contribution of $1,000 and $10,000.

138.  On 27 March 2013, over half of the owners who participated in the MAC meeting agreed that each should contribute $10,000 for repair expenses.  Subsequently on 8 April 2013, the 12^th defendant issued a letter stating the scope of the repair work and the upper limit of the budget being $300,000.  The repair expenses were discussed in a meeting of the MAC on 12 August 2013.  The minutes were later published in the Estate. 

139.  The plaintiffs say that they were not obliged to pay the management fees and expenses for a number of reasons.

140.  First, the 2006 Management Agreement has been superseded by subsequent agreements.  Hence, the 12^th defendant cannot now rely on it to claim against the plaintiffs.

141.  Second, in any event, on a proper construction of the 2006 Management Agreement, the plaintiffs contend that it is an agreement between the 12^th defendant and the members of the MAC for the time being.  Since they ceased to be members of the MAC in 2007, they are no longer obliged to pay the management fees. 

142.  Third, the plaintiffs did not use the management services provided by the 12^th defendant since they ceased to be members of the MAC in July 2007.  There is no reason why the plaintiffs should continue to pay the management expenses after that date.

143.  Fourth, in any event, even if the plaintiffs continue to be bound by the 2006 Management Agreement after they ceased to be members of the MAC, there is no evidence that the MAC has authorised the 12^th defendant to sue the plaintiffs.  Such authorisation is required under the express provisions of the agreement.  In the absence of the requisite authorisation, the 12^th defendant is not entitled to make a legal claim against them.

144.  The 12^th defendant says that the obligation to pay management expenses did not depend on membership of the MAC. So long as the plaintiffs are parties to the 2006 Management Agreement, the 12^th defendant may claim against them for outstanding management expenses.  In this regard, the plaintiffs could not unilaterally opt out of the 2006 Management Agreement.  As a matter of contract law, unanimous agreement was required to vary or terminate the multi-party contract.  There being no such agreement, the plaintiffs are bound by it.

THE EVIDENCE

145.  As is evident from the above, a lot of the facts in this case are common ground.  There are not many factual disputes which need to be resolved in order to adjudicate upon the legal rights and obligations of the parties.  The limited scope of the factual disputes is in a way reflected in counsel’s closing submissions.  Not too many paragraphs are devoted to analysing the credibility of the witnesses.

146.  On the whole, having heard them give live evidence at trial, my impression is that the three witnesses were trying to tell the truth, but each from their own personal viewpoint.  Clearly, there has been a lot of hostility between the parties over the years.  Each has held a great deal of grievances towards the others.  It is not difficult to see why that is the case.  The owners initially came together in 2006, sharing the common goal of fighting for the best interests of the owners against the Developers when the construction works began for phase 2 of Eden Garden.  The works clearly were affecting and impairing the owners’ enjoyment of their properties.  The MAC was formed that year, with that goal in mind.  The 1^st plaintiff, the 1^st defendant and Chan had since made contributions towards that goal voluntarily by putting in their own personal time and efforts over the years. 

147.  Regrettably, things did not work out.  The owners have held vastly different views as to how the Estate should be managed.  It is not difficult to see why the animosity between these neighbours have grown to such an extent that they consider it worthwhile to fight the case to a full-blown trial.

148.  In general, I am of the view that each of the witnesses was trying to tell the truth when testifying.  In respect of some events, their account differed from each other.  This is likely to be accounted for, partly, by the long lapse of time as the incidents recounted by the witnesses took place quite some years ago.  The different testimonies are also likely to be attributable to their recollection being tainted by the animosity one feels towards the other.  I will approach the conflicting evidence by adopting the well-established approach in evaluating evidence, including considering the inherent plausibility of the parties’ cases, assessing the oral evidence against the contemporaneous documents and taking note of the internal consistency or inconsistency of the parties’ evidence.

149.  In respect of the ownership of the lands of the Estate as of 2005:

a.  Mr Chong invited the court to proceed on the basis that when the Developers sold the flats in 2005, they owned the entire Estate beneficially as the then individual owners of the lots were “Dings” acting as agents or trustees of the Developers. 

b.  I decline to make that factual finding.  The objection raised by both Mr Tsui and Mr Ho is justified.  The alleged Ding arrangement was not pleaded at all.  Before the trial, it was never the case which the defendants were supposed to meet in the present action.  No evidence was adduced as a result.  The plaintiffs should not be allowed to run a case which they have never properly set up. 

c.  It is true that Chan’s evidence in her witness statement may go to support the plaintiffs’ factual proposition.  However, that evidence itself goes contrary to the legal documents effecting the sale of the flats to the owners.  See, for instance, the assignment dated 12 January 2006 in which Lau Fook Keung assigned the flat to the plaintiffs.  The assignment expressly stated that Lau Fook Keung assigned the property “as beneficial owner”.  The contemporaneous documents go directly contrary to the plaintiffs’ position. 

d.  If the plaintiffs had properly pleaded their case on the alleged Ding arrangement at the outset, the parties would have had the opportunity to adduce evidence in this regard.  That has not happened.  The legal documentation would prevail in the present case.

150.  In respect of the Brochure and the car park rules, I find as follows.  The plaintiffs had been given the Brochure and they had inspected the Estate in person prior to their purchase.  The evidence is uncontradicted. I also find that they had never seen the car park rules.  This fact is inherently plausible as the plaintiffs had not rented any car park space at any time.

151.  In respect of the signing of the Owners’ Rules and the formation of the MAC:

a.  I accept Chan’s evidence and find that the Owners’ Rules were signed before the MAC came into existence.  The evidence is consistent with the actual terms of the Owners’ Rules.  In the introductory paragraph, it was stated that a mutual aid committee will be set up (“本屋苑將成立管理委員會”). 

b.  The subsequent letter from Sit, Fung Kwong & Shum specifically referred to clause 7 of the Owners’ Rules.  But its effect is only that that clause was added subsequent to the meeting.  It does not alter the fact that the rest of the Owners’ Rules had been agreed at the meeting.  The subsequent addition of clause 7 does not alter the sequence of events which had happened.

152.  In respect of the 2006 Management Agreement, I refuse to accept the plaintiffs’ contention that it was superseded by a subsequent management agreement or agreements.  The plaintiffs have failed to produce a copy of any such subsequent agreement.  They have failed to refer in concrete terms the particulars of such an agreement.  It is an objective fact that the monthly management fee was subsequently increased.  That said, I accept Mr Ho’s submission that even if there was indeed a further agreement, it does not necessarily follow that the 2006 Management Agreement was wholly superseded.   In the circumstances, I find that the relevant provisions of the 2006 Management Agreement, which the 12^th defendant relies on in support of its counterclaim, remain in effect and have not been superseded.

153.  In respect of the alleged incident in 2008:

a.  I decline to find, as suggested by Mr Chong, that the 1^st, 3^rd, 8^th, 9^th and 12^th defendants were involved in the making of any decision not to give the door code to the plaintiffs. 

b.  It is for the plaintiffs to make good their case against each of the relevant defendants in this regard.  But evidence only emerged (as against the 12^th defendant) in the 1^st plaintiff’s cross-examination when he said that he had asked the 12^th defendant for the door code but the latter refused to do so.  This would be an important piece of evidence in support of the plaintiffs’ case.  There is no reason why the 1^st plaintiff could not have said so in his written statement. I do not accept as true the evidence which was made only for the first time after more than 13 years had elapsed.

c.  Furthermore, the 1^st plaintiff said that he did not request the door code from any of the other defendants.

d.  On the whole, there is simply no evidence against any of the defendants on this issue.

e.  Mr Chong submitted that the court should nonetheless make the finding based on the hostility between the parties at the time, in particular that the defendants were dissatisfied with the plaintiffs’ refusal to pay management fees.  In my view, there is a gap in the plaintiffs’ evidence which simply cannot be bridged by the existence of hostility between the parties. The gap is that just because the parties were on bad terms, it does not necessarily follow that the relevant defendants had made the decision as alleged by the plaintiffs.  I also refuse to draw any adverse inference against the defendants for not giving evidence on this point.  It is for the plaintiffs to make out their case. They have failed to do so.  That is the end of the matter.  There is no room to draw any adverse inference.

154.  In respect of the alleged 2013 incident, I find that the minutes accurately recorded the resolution passed in the meeting on 21 July 2013.  The 1^st, 3^rd, 8^th and 9^th defendants all voted in favour of the resolution that the key card to the pedestrian gate would not be issued to the plaintiffs who had been in default in paying the management fees and expenses unless they settled all the outstanding fees.  I reject the 1^st defendant’s evidence that he did not vote in favour.  That evidence goes contrary to the contemporaneous document.

155.  Lastly, in respect of the management fees and expenses, I accept the evidence adduced by the defendants (except the 1^st defendant) on the amounts which were due from each of the owners over the years.  It is not in dispute that the plaintiffs had not paid any management fees and expenses since (at least) July 2008.  I accept the plaintiffs’ evidence that the 12^th defendant has suspended some of the management services since July 2017.  However, I accept Chan’s evidence that there are management services which have in effect been continuously provided to the plaintiffs over the years, including the maintenance of the boundary walls and the service of security guards, as those services by their nature benefit the Estate as a whole and hence all the owners.  Lastly, I find that there was no written authorisation given by the owners to the 12^th defendant to make the counterclaim against the plaintiffs in respect of outstanding management fees and expenses.  There is simply no such evidence before the court.

DISCUSSION

156.  Based on the above factual findings, I now turn to each of the claims and the counterclaim.

Rights of way over the Main Gate

157.  The plaintiffs first rely on proprietary estoppel to establish the vehicular right of way over the Main Gate. 

158.  As a preliminary point, Mr Ho submitted that the plaintiffs have not pleaded their case properly.  There is, he submitted, no plea on detriment or reliance.  In my view, while there is much to be said for how the plaintiffs have pleaded their case of proprietary estoppel, when the statement of claim and the reply are read together, the material facts in support of the requisite elements, including representation and detrimental reliance, are there in the pleadings.  The pleaded case covers the following points.  The representation was made in the form of the physical condition of the Estate and the Brochure.  But for the representation, the plaintiffs would not have purchased the flat.  That amounted to detrimental reliance on the plaintiffs’ part.  The Developers, and their successors in title who have had notice, should be estopped from denying the plaintiffs the right.  

159.  On the basis of such pleas, I accept Mr Chong’s submission that the car park rules, which were not given to the plaintiffs at any time (whether before or after their purchase), are not relevant.  They would not operate to curtail any rights which the plaintiffs would acquire under the doctrine of proprietary estoppel.

160.  That said, I am of the view that no proprietary estoppel arises, as contended by the plaintiffs.  The alleged representation, which takes the form of the physical condition of the Estate and the Brochure, is equivocal.  As submitted by Mr Tsui, the Main Road was expressly described as “消防通道” in the Brochure.  There was no suggestion in the Brochure that it was to be used freely as a general vehicular access by the owners.  More importantly, the Estate is a residential estate.  That fact would be plain to the plaintiffs during their inspection.  It was not to be expected that loading and unloading of heavy goods would frequently take place.  In the circumstances, there is nothing extraordinary at all if the residents are not given an entitlement to have vehicular access right to the front of their own houses.  As such, the physical condition of the Estate and the Brochure together did not amount to any representation made by the Developers that the owners would be given a right to pass the Main Gate with vehicles. 

161.  I should add that the defendants’ plea made in the Developers action (see para 117 above) does not assist the plaintiffs’ case.  Their plea simply reflected their stance adopted in that litigation vis-à-vis the Developers.  Judging from the terms of the settlement subsequently reached, the defendants were effectively unsuccessful in their plea.

162.  As an alternative, the plaintiffs rely on the doctrine of implied grant to establish the right of way over the Main Gate with vehicles.  In my view, that alternative also fails.

163.  The factual premise, on which the claim is based, is that all the lands within the Estate were owned by the Developers at the time of sale.  Mr Chong’s argument was that when the Developers sold the flats to the plaintiffs, there must be an implied grant on the part of Sino Favour to allow vehicular access over the Main Gate.  I have rejected the factual premise in relation to the ownership of the lands.  It follows that the claim under implied grant must fail.

164.  As a further alternative, the plaintiffs rely on the 2006 Deed.  They contend that as a matter of construction, Sino Favour granted a right of way, both on foot and with vehicles, to the owners of the flats in the Estate under the Deed.

165.  In my view, the construction contended for by the plaintiffs is untenable.  The purpose of the grant was expressly stated to be “for the purpose of ingress to and exit” from the owners’ flats.  However, Sino Favour only granted a right of way over part of, but not the whole of, the Main Road.  If the plaintiffs’ construction is correct, the right granted under the deed ought to be such as to allow the owners to have access from the Main Gate to their houses by vehicles.  But the owners do not have such right under the express terms of the deed as they enjoy no such right over the Uncovered Land.  See paras 65 to 67 above.  The plaintiffs’ construction is therefore not tenable.

166.  On the whole, the factual background surrounding the making of the 2006 Deed is not known.  The recital referred to “the request of the Grantee”.  However, none of the witnesses knew anything about the grant at the time.  Furthermore, lands outside of the Estate were also covered by the grant.  It is simply unclear what the purpose of the 2006 Deed was. 

Rights of way over the Side Gate

167.  The plaintiffs’ claim for a right of way over the Side Gate, both on foot and with vehicles, relying on proprietary estoppel fails for broadly the same reasons which apply to the claim over the Main Gate. The mere fact that there was a side gate constructed does not mean that the owners or residents would have an entitlement to use it.

168.  The claim under the doctrine of implied grant also fails in respect of the Side Gate.  I have rejected the factual proposition that the legal owners of the various lots on which the Houses are built held the lots as agents or trustee for the Developers.  That factual premise not being made out, the claim under implied grant cannot succeed.

169.  As a further alternative, the plaintiffs rely on the 2005 Deed.  They contend that as a matter of construction, there was a mutual grant of right as between the grantors and the grantee under the deed.  See paras 43 to 44 above. 

170.  I do not agree that that is a proper construction of the deed.  I accept Mr Ho’s submission that the grant was a grant to Sino Favour only.  It is reasonably clear from the language used in the deed as a whole that that was the case.  Para 3 of the Recital referred to a grant to “the Grantee”, which was defined as Sino Favour.  It did not make any reference to the owners of Lots 482D, 482E and 482G also being the grantees.  It is thus clear that when it was provided in para 1 that the grantors were granting the right to the grantee “in common with the Grantors” to “pass and repass … the servient tenements”, the provision was to the effect that the rights to pass and repass was to be enjoyed by the grantee in common with the respective grantors. The effect was not to grant fresh rights on the grantors which they had not enjoyed prior to the execution of the deed. 

Conclusion on the plaintiffs’ claims for rights of way

171.  In summary, the plaintiffs fail to establish the alleged rights of way over the Main Gate (vehicular access) and the Side Gate (both pedestrian and vehicular) by relying on proprietary estoppel, implied grant, the 2005 Deed or the 2006 Deed.

172.  I also reject the submission that any right of way would arise by necessity.  As noted above, the Estate is a residential estate. It is not in dispute that the owners have a pedestrian right of way over the Main Gate.  In the circumstances, the owners and residents already have access right to and from their own flats.  No further vehicular right of way arises by necessity.

The alleged interference with the plaintiffs’ rights

173.  In respect of the alleged incident in 2008, I have rejected the plaintiffs’ factual case that the 1^st, 3^rd, 8^th, 9^th and 12^th defendants were involved in any decision not to give the door code to the plaintiffs.  As such, the claim that these defendants had interfered with the plaintiffs’ right of way over the Main Gate must fail.

174.  In respect of the alleged incident in 2013, the plaintiffs rely on the resolution passed in the MAC meeting on 21 July 2013.  They contend that by reason of the resolution, they were unable to access the Estate via the Main Gate.

175.  Where it is alleged that a defendant has interfered with an easement enjoyed by a plaintiff, the interference is like trespass.  No special damage is required to be proved: Clerk & Lindsell on Torts (23^rd ed) at para 19-27.

176.  In the present case, the relevant question is whether the resolution amounted to an interference with the plaintiffs’ enjoyment of the pedestrian right of way over the Main Gate.  The resolution was to the effect that unless the plaintiffs settled the outstanding management fees and expenses, they would not be given the smart card key to access the Main Gate.

177.  It is notable that in the present case, the plaintiffs’ complaint is not that the installation of the smart card key system at the Main Gate in itself amounted to an interference with their right of way: cf Page v Convoy Investments Ltd [2015] EWCA Civ 1061 at para 46, which was referred to in Man Wa Tong at para 26.

178.  Here, the objective facts are that a lock system had all along been installed at the Main Gate.  And there was apparently no objection raised by the plaintiffs to such a system.  In the circumstances, I accept Mr Ho’s submission that the plaintiffs’ alleged inability to enter the Estate via the pedestrian gate was self-induced.  The plaintiffs have all along maintained that they did not need management services.  However, the provision of the smart card key was clearly part of the management services.  And, as will be seen below, the plaintiffs are prima facie contractually liable to pay the management fees.  In the circumstances, the passing of the resolution did not amount to an interference with the plaintiffs’ enjoyment of the right of way over the Main Gate.

The counterclaim for management fees

179.  In respect of the 12^th defendant’s counterclaim against the plaintiffs for outstanding management fees and expenses, it is clear that the plaintiffs have at all times remained parties to the Owners’ Rules.  The rules were entered into in 2006 by the owners of all the 30 flats, the plaintiffs included.  The plaintiffs cannot unilaterally terminate their contractual relationship with the other owners under the Owners’ Rules.  The membership of the MAC is a separate issue.  With effect from 22 July 2007, the plaintiffs ceased to be members of the MAC.  But they did not cease to be parties to the Owners’ Rules by reason of that.  There is nothing in the Owners’ Rules which make provision to that effect. 

180.  Whether the plaintiffs wanted the management services is also irrelevant and their decision not to receive any such services does not relieve them of their obligations under the Owners’ Rules.  (In any event, Chan emphasised in her oral testimony that some of the management services are provided to, and for the benefit of, all the owners and as such they cannot be divided as between different owners.  I share that sentiment. The plaintiffs indeed have been benefiting from these “indivisible” services.)

181.  According to the Owners’ Rules, the plaintiffs have the obligation to share the expenses incurred for the management and upkeep of the Estate.  

182.  Furthermore, the 12^th defendant is entitled to bring a claim against the plaintiffs for outstanding management fees in accordance with the terms of the 2006 Management Agreement.

183.  That said, there is a problem with the 12^th defendant’s counterclaim.  The 2006 Management Agreement expressly provided that the manager could only bring a legal claim against an owner with the written authorisation of the MAC.  (It would appear that both Mr Chong and Mr Ho treated the reference to “業主立案法團” as the MAC.)  As I have held above, there was no such authorisation.  It follows that the counterclaim was not brought in accordance with the terms of the 2006 Management Agreement.  Hence, the 12^th defendant did not have a proper cause of action under the 2006 Management Agreement. 

184.  Mr Ho argued in his oral submissions that the authorisation should be regarded as a pure procedural requirement and its absence should not prevent the 12^th defendant from pursuing a substantive right against the plaintiffs.  I do not accept that submission.  It is a requirement expressly stipulated in the 2006 Management Agreement as a prerequisite for launching a legal claim.  The bringing of a legal claim has potential costs consequences for the owners.  They may agree to accept these consequences or they may not.  In this action, some of the owners have in fact settled with the plaintiffs.  It is by no means certain that the authorisation would have been readily obtained by the 12^th defendant in this case. By reason of the absence of the requisite written authorisation, the counterclaim fails.

CONCLUSION

185.  I make the declaration that the 1^st and 2^nd plaintiffs and their assigns, successors-in-title and their tenants together with their servants and licensees do have a pedestrian right of way over the Main Gate located in Lot 485RP, Lot 482P and Lot 482O.

186.  I dismiss the rest of the plaintiffs’ claims.  I also dismiss the counterclaim.

187.  I give liberty to apply in respect of any matter that may arise out of the order made on the plaintiffs’ application for interlocutory injunction. 

188.  I make the following orders nisi.  As between the plaintiffs and the 1^st defendant, the 1^st defendant should have costs of the action.  There seems to be no reason why costs should not follow the event.  As between the plaintiffs and the 3^rd, 4^th, 8^th, 9^th and 12^th defendants, there be no order as to costs of the action and the counterclaim, as neither side succeeds in getting what they sought at the trial.