CHONG HANG KAI AND ANOTHER v. CHEUNG KIN BONG

DCCJ 2609/2018

[2022] HKDC 223

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2609 OF 2018

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J U D G M E N T

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1.  This case concerns the plaintiffs’ claims for:

i)  an easement of right to park on Lot 214 B1 in DD 118, Yuen Long (“Lot 214 B1”); and

ii)  the right of way to use an alley situated on the Remaining Portion of Section B of Lot 214 in DD 118, Yuen Long (“Lot 214 RP”)  for access to and egress from the plaintiffs’ property (“the Property”)  which is known as G/F, Section D of Lot 214 in DD 118, Yuen Long (“Lot 214 D”).

2.  The defendant is at all material times the legal and beneficial owner of Lot 214 B1.

Background

3.  There was no dispute that the plaintiffs and the defendant were the purchasers and vendors of the Property the transaction of which was completed on 28 March 1995.

4.  At the time when the plaintiffs and the defendant entered into a Provisional Agreement for Sale and Purchase on 18 September 1994 (“the PASP”), the parties also signed a document titled “承諾書” (“the Undertaking”, Trial Bundle page 108)  which was also witnessed by the estate agents involved. The Undertaking stated, inter alia (as I translate):

“The vendor undertakes to provide the above address one fixed and free-of-charge car park (only for use by private car)”

5.  There were 3 flats (including the Property)  on Lot 214 D. Three car parking spaces had been created by the defendant on Lot 214 B1 (the defendant claimed in court that the 3 spaces spanned both Lot 214 B1 and Lot 214 RP)  and, since the plaintiffs came into possession of the Property in 1995, they have been occupying one of the 3 parking spaces without any intervention by the defendant until 2016 or 2017.

6.  The defendant raised a new dispute at trial regarding which of the 3 spaces that the plaintiffs used: the plaintiffs have said it was the middle space but the defendant now claimed that any one of the 3 spaces could be used (but then suggested that the residents parked according to their “usual habits” without further indicating which space the plaintiffs had used as their “usual habit”).

7.  On balance, I would accept the plaintiffs’ evidence that they had all along been occupying the middle of the 3 parking spaces (“the Car Park”).

8.  The only way for the plaintiffs’ vehicle to accessed to and egressed from the Car Park to the main road was via an alley through Lot 214 RP and also using part of Lot 214 B1 (there was also a corner and Lot 214 RP alone was too narrow for vehicles to turn). This has been the arrangement since 1994.

9.  However, in around June 2016, the defendant started to give various notices and warnings to the plaintiffs to vacate the Car Park.

10.  On 4 September 2017, the defendant’s lawyers, Messrs. George Y.C. Mok & Co., wrote to the plaintiffs (“the YCM letter”, Trial Bundle page 143 - 144)  alleging that the defendant had only allowed the plaintiffs to use the Car Park on Lot 214 B1 until the house on Lot 214 B1 was completed, and since the house was completed on 23 June 2016, the plaintiffs were given notice to vacate the Car Park.

11.  It is, however, not disputed that the house was actually completed around 2014 (which was also the time the defendant had moved in)  but only received its certificate of completion in June 2016.

12.  The defendant started to build a wall surrounding Lot 214 B1 in late 2017 and this was completed around February 2018. The surrounding wall now created a narrow lane on Lot 214 RP (outside Lot 214 B1).

13.  Since then, the plaintiffs could only walk to and from the Property and his car could not gain access to the Car Park like before: the Car Park was now within the surrounding wall accessible only through a locked gate so the plaintiffs were denied of its use.

The Undertaking

14.  The main factual dispute in this case is the circumstances under which the Undertaking was signed on 18 September 1994.

The defendant’s case

15.  The defendant claimed in his witness statement (paragraph 5, Trial Bundle page 100)  that:

“At the time of the said inspection and upon the plaintiffs’ enquiry, I told the plaintiffs that I could only provide temporary free car parking at my nearby land but such arrangement would come to an end upon the completion of my own house in Lot 214 B1. It was understood by the parties at the time that the construction of the house in Lot 214 B1 might take several years to complete.”

The plaintiffs’ case

16.  The 1^st plaintiff (“Mr. Chong”)  stated in his witness statement (paragraphs 6-12, Trial Bundle p.77-79)  that one of the condition of buying his home was that it must have a car parking space. He had rejected a property viewed earlier on the same day because of the parking problem: that property did not come with a car park and the resident would need to find a parking space outside.

17.  When his agent, Ms. Kwan of Good World Property Limited (“Good World”), took him to view the Property (which was still being built at the time), he was interested and asked Ms. Kwan to ask if there was a car park for sale with the Property. Ms. Kwan contacted the vendor via another agent, Tin On Property Co. (“Tin On”).

18.  The reply from Tin On was that he could park his car on the empty ground on Lot 214 B1 near Lot 214 RP: the vendor did not want to sub-divide Lot 214 B1 to sell to him, but would give an undertaking for a right to use a car parking space on Lot 214 B1 permanently (“永久使用權”). Mr. Chong said in court that the Car Park was pointed out to him by the agent.

19.  Mr. Chong discussed with his wife, the 2^nd plaintiff (“Ms. Tang”)  and they accepted that, so it was arranged that they would meet the defendant that night at the office of Tin On.

20.  During the meeting, the agent from Tin On had drafted the Undertaking.

21.  At the time, the plaintiffs asked that whether there was a right to permanently use the Car Park, and whether it should state “to use permanently” (“永久使用”)  on the Undertaking.

22.  The Tin On agent explained that since the Undertaking did not state the time limit of the right, that would mean “permanent use of the car parking space”. The defendant was present at the meeting and did not raise any objection.

23.  The plaintiffs and the defendant then signed the Undertaking and Ms. Kwan and Tin On also placed their chops on the Undertaking. The parties also signed the PSAP and the plaintiffs placed a deposit.

Analysis of the evidence

24.  As stated above, the defendant’s case was that he had told the plaintiffs right from the beginning that there would only be a “temporary free car parking space”.

25.  During the trial, the defendant elaborated further.

26.  He claimed that he had already made an application for building permission on Lot 214 B1 to the Lands Department on 6 July 1994, so he had told the plaintiffs the following:

“If the application is approved in 3 to 5 years’ time, I will build a house on Lot 214 B1, and I will build a surrounding wall and after that you will have to park inside my garden and pay rent for the car park.”

27.  I find several problems with the defendant’s evidence.

28.  Firstly, this is something the defendant only first raised during the hearing. He has never pleaded nor stated in his witness statement that he told the plaintiffs about this rather elaborate plan for the house, surrounding wall, garden and future car parking spaces to be built on Lot 214 B1.

29.  There is also no document produced at trial to support that the defendant has made the application to Land Department at the date he claimed.

30.  Secondly, the construction of the house on Lot 214 B1 did not start until 2013. I find it unlikely that the defendant had the foreknowledge of such a detailed plan for the lot almost 20 years earlier in 1994.

31.  The defendant then claimed in court that the delay in construction was caused by his lack of funds.

32.  And this would lead to the third problem with the defendant’s case: why would he not charge the plaintiffs rent for parking right from the beginning in 1994? Why wait until the house on Lot 214 B1 (or the surrounding wall)  to be built before charging rent on a car park on the same plot of land?

33.  The defendant was rather evasive in his answer.

34.  At one point, he claimed that the car parking fees would be very little at the time so, presumably, he did not bother. Clearly, this is nonsense especially in view that the defendant has just claimed that he was poor and had no funds to build the house on Lot 214 B1.

35.  The defendant then started this rather elaborate explanation that since half of the Car Park was on Lot 214 RP (the other half was on Lot 214 B1: he claimed that the Car Park, that is, the middle of the three car parking spaces, straddled the boundary of the two lots)  which he claimed was “public”, so he could not bring himself to charge the plaintiffs for parking there.

36.  This was, again, new evidence. All the parties’ cases, all along, were that the Car Park was located on Lot 214 B1 and not on, or partially on 214RP (paragraph 6 of the Statement of Claim, Trial Bundle page 4, paragraphs 8 and 15 of the Defence, Trial Bundle page 42-43, the YMC Letter, Trial Bundle p. 143-144).

37.  The defendant sold Lot 214 RP in April 1993 and there was a Deed dated 15 April 1993 granting a right of way to the owners of adjacent lots (Trial Bundle, Page 138-142)  including Lot 214 D. Thus, the right of way was granted to the owners of the 3 flats in Lot 214 D including the plaintiffs and Lot 214 RP was not “public” as the defendant claimed.

38.  There was no dispute even from the plaintiffs that the Car Park was on Lot 214 B1 so there was no reason why the defendant could not charge rent.

39.  Even if the defendant’s new allegation was true (and for him to know that, presumably, he must have done a land survey to identify the boundaries when constructing the 3 car parking spaces all those years ago), half of the Car Park was still on Lot 214 B1 so he was entitled to charge at least half the rent.

40.  Of course, it was pointed out that if the defendant really wanted, he could have built the Car Park entirely on Lot 214 B1 and charge the plaintiffs full rent.

41.  The defendant claimed that his mother was using Lot 214 B1 for growing vegetables and he did not want to go against her will.

42.  This seemed illogical: I could not see how encroaching Lot 214 B1 by half a car parking space would affect the vegetable growing by much. Also, the defendant accepted that her mother was not growing vegetables for a living, but only for own (and friend’s)  consumption. And since the defendant also claimed that he had already applied to build on Lot 214 B1 in July 1994 (i.e. about two months before the sale of the Property to the plaintiffs), he was clearly planning to go against his mother’s will in any case.

43.  I also note that the unchallenged evidence from the plaintiffs was that the Car Park was within the surrounding wall built by the defendant and his car was trapped inside the locked gate for more than a month after the wall was completed in February 2018. If the Car Park was half on Lot 214 B1 and half on Lot 214 RP, the surrounding wall would presumably have to split the plaintiffs’ car in half.

44.  On balance, I find that the Car Park was indeed situated entirely on Lot 214 B1.

45.  Fourthly, it was always the defendant’s case that he told the plaintiffs on 18 September 1994 that the “end event” for free parking was the completion of construction of the house on Lot 214 B1.

46.  This was stated in the YCM letter that the defendant’s undertaking was allowing parking on Lot 214 B1 “until his house to be erected on Lot 214 B1” (Trial Bundle, page 143). The same was pleaded under paragraph 8 of the Defence (Trial Bundle page 42): that the Undertaking was a bare license to allow free parking “until the completion of the construction of the house”. Paragraph 5 of the defendant’s witness statement (as above, Trial Bundle page 100)  also stated such a position.

47.  Under cross-examination, the defendant was asked why he did not ask for rent when he completed the construction of the house (and in fact had moved into it)  in 2014.

48.  The defendant then changed his case and suggested that the Undertaking was free parking until the surrounding wall was built (thus making the claim of the foreknowledge of the elaborate plan of building the house and the surrounding wall even in 1994).

49.  The follow-up question was: if that was the case, why did he demand the plaintiffs to vacate the Car Park in September 2017 (in the YCM Letter)  when the construction of the wall had not even started (paragraph 13 of his witness statement, Trial Bundle Page 102)?

50.  The defendant then claimed that he did not have the money to build the wall at that time (even when he obviously had the money to complete the construction of the house).

51.  That did not answer the question: if the “end event” as promised in the Undertaking was the completion of the wall, he could not ask the plaintiffs to vacate the Car Park until the wall was built, irrespective of any reason why the building of the wall was delayed.

52.  Of course, Mr. Chong and Ms Tang denied that the defendant ever told them that the Car Park would only be temporary until the occurrence of whatever “end event” the defendant now claimed.

53.  Mr. Chong elaborated under cross examination in court that, at the time, he had a shop selling baby products. He had a van which had goods inside so a parking space was essential as they could not park the van outside on the street. He would not have considered buying the Property if the Car Park was temporary.

54.  I think this is a very reasonable explanation as to why a car park was a required condition for the plaintiffs and why they rejected a property viewed earlier on the day. I accept this evidence.

55.  This also raises a fifth problem with the defendant’s case: the defendant insisted that he had told the plaintiffs of this “temporary free parking arrangement” after which he would charge rent, so did the plaintiffs asked how much rent they would have to pay?

56.  The defendant was very evasive: he first avoided answering the question by stating that he did not know much rent to charge because he did not know when he would start charging.

57.  But when the question was repeated, the defendant admitted that the plaintiffs did not ask him.

58.  I find that unconvincing.

59.  I think that if a vendor tells a potential purchaser that there is only be temporary free parking and rent will be charged later, one will reasonably expect the potential purchaser to ask: i)  how long will the rent-free period be? and ii)  what will be the rent when the period is over?

60.  And given the plaintiffs’ requirements of car parking for his business, it would be even more unlikely that they would fail to ask these questions.

61.  On the other hand, the main attack by the defendant’s counsel. Mr. Tony Ko (“Mr. Ko”)  on the plaintiffs was questioning why they did not insist on adding the word “permanent” to the Undertaking if this was so important.

62.  I agree with Mr. Marco Tse, counsel for the plaintiffs (“Mr. Tse”), that on the face of the wordings used in the Undertaking (such as “承諾”, “固定” and “免費”)  were already sufficient to indicate a long term commitment made by the defendant for the protection of the plaintiffs as the purchaser of their right to park free of charge.

63.  Indeed, if the defendant was really only offering a temporary arrangement until the occurrence of a certain “end event”, it would have been even more important for him to specify that “end event” on the Undertaking in view of the simple reading of the meaning of the Undertaking.

64.  Further, the plaintiffs’ evidence was that they did ask the agent who explained that since the Undertaking did not state the time limit of the right, it would mean “permanent” use. The defendant was present and did not object to that explanation. So the plaintiffs accepted that.

65.  The plaintiffs evidence in this respect was entirely consistent and I find it a reasonable and credible explanation.

66.  Mr. Ko’s other attack was questioning why the plaintiffs did not care whether the Undertaking was incorporated into the formal Agreement and Assignment.

67.  Mr. Chong explained that they have produced the Undertaking to their lawyers on their first meeting and that they did not know the legal requirement for such, and they saw no problem since they had been using the Car Park already.

68.  I think these are reasonable explanations. Further, the reason why there was such an omission and who was to blame is not relevant to the current case. The plaintiffs’ case is not that this is a legal easement.

69.  In conclusion, I do not find the defendant a credible witness: he was simply making up evidence as he went along and such were inconsistent and illogical. On balance of probability, I find that the defendant did not inform the plaintiffs that he could only provide temporary free parking until his house was built or until the occurrence of any “end event” as he now claimed. Instead, the event would have happened as the plaintiffs claimed.

70.  The most likely scenario was that the defendant was keen to sell the Property so he gave the Undertaking for a permanent and fixed car parking space to the plaintiffs, but some 20 years later, after the construction of his new house, he tried to go back on his undertaking (possibility because he found a lack of parking spaces for his new house), and when the plaintiffs refused to comply, the defendant simply built a surrounding wall to physically stop the plaintiffs from using the Car Park.

The issues in law

71.  Several legal arguments were raised by the defendant.

72.  The defendant firstly argued that the Undertaking could not be regarded as a guarantee since there was no consideration provided and also it was not executed as a Deed (paragraph 3 of the Defence, Trial Bundle page 41).

73.  I agree with Mr. Tse that since the plaintiffs are seeking to establish proprietary estoppel, consideration is not necessary (Crab v. Arjun District Council [1975] 1 Ch. 179).

74.  Further, the fact that the Undertaking was not executed as a deed does not affect the creation or grant of relief by equitable easement. The plaintiffs are not seeking for a legal easement. (Sections 4 and 5 of the Conveyancing and Property Ordinance, Cap. 219)

75.  The defendant also argued that the Undertaking was a bare license and terminated by the defendant on 23 June 2016 (paragraph 8 of the defence, Trial Bundle page 42).

76.  I find that the Undertaking was signed at the same time at the PSPA and the defendant promised to provide a free and fixed Car Park permanently in the capacity as the vendor to the plaintiffs as purchasers. It is clearly an easement for the benefit of the Property and not a bare licence personal to the plaintiffs.

77.  The defendant also argued, in his opening and closing submissions, whether the right to use or actual usage of Lot 214 B1 for parking vehicles amount to an easement.

78.  It is well established that the right to park is a recognised type of easement: Poste Hotels Limited v Cousins [2020] R.T.R. 31, Kettel v Bloomfold Ltd. [2012] 2 P.&C.R. DG16.

79.  The defendant also argued that this is not an express easement. But as stated above, the Plaintiffs’ are not claiming that there is an express legal easement created by deed.

80.  There was also an argument based on time limitation but the defendant appeared to have abandoned this in his opening and closing submissions. I did not hear any arguments and I cannot see any valid arguments based on such either.

Proprietary estoppel

81.  The legal principles are trite (Cheung Lai Mui v Cheung Wai Shing (2021)  24 HKCFAR 116). There has to be:

a.  a representation or assurance made to the claimant

b.  Reliance thereon by the claimant; and

c.  Detriment to the claimant in the consequence of that reliance

82.  In this case, I find that there was a promise (in form of the Undertaking in the circumstances I found above)  made by the defendant that the plaintiffs would be given the permanent right to park their car at the Car Park located on Lot 214 B1, upon which the plaintiffs relied upon and purchased the Property.

83.  It was clear that the plaintiffs were looking to buy a property with a car parking space and would not have entertained buying a property with a car parking problem. They have already rejected a property viewed earlier because it did not come with a fixed car parking space. Indeed, the plaintiffs had asked to buy the Car Park but this was rejected, and, on reliance on this Undertaking, they agreed to purchase the Property to their detriment. The Undertaking must have been part of the bargain in the minds of the plaintiffs why they decided to buy the Property at that price. Without the Undertaking, they would not likely have bought the Property and would have looked for another property where they could properly buy a fixed and permanent car parking space.

84.  It is therefore unconscionable for the defendant to go back on his words and deny the plaintiffs their right to park now.

85.  I therefore find that proprietary estoppel has been established.

86.  If the plaintiff can establish propriety estoppel, equity can be satisfied by granting the plaintiff an equitable easement: ER Ives Investment Ltd v High [1967] 2 QB 379, Crabb v Arjun District Council (as above).

Relief

87.  The defendant has built the surrounding wall such that the Car Park was now inside his garden. According to Mr. Chong (paragraphs 27-30 witness statement of Mr. Chong, Trial Bundle page 83-84), there was a gate to the garden which the defendant had locked up in February 2018. This had trapped the plaintiffs’ car inside and the defendant had demanded various payments, and Mr. Chong only managed to removed his car in March 2018 when the defendant’s wife had inadvertently unlocked the gate.

88.  This showed clearly that the Car Park is now inside the garden and accessible via a gate. It is therefore equitable that the plaintiffs should be allowed to use the Car Park free of charge and without interference in the access to and egress from the Car Park.

89.  As such, there should be a declaration that an easement of the right to access to, egress from and use the Car Park.

Right of way in Lot 214 RP through Lot 214 B1

90.  The plaintiffs’ evidence was that in October 2017 the defendant threatened that, unless the plaintiffs pay HK$2,000 as “access fee”, he would build a wall and gate to prevent the plaintiffs from entering Lot 214 B1 to reach the Property (via the alley of Lot 214 RP). (Paragraph 25 of the Witness Statement of Mr. Chong, Trial Bundle page 83).

91.  This was disputed by the defendant, but, having found him a dishonest witness, I have no doubt that this was part of his misguided effort to force the plaintiffs to give up the Car Park: the defendant was clearly trying to create a situation where he could offer to give a formal grant of right of way in exchange for the plaintiffs to vacate the Car Park.

92.  However, Mr. Chong fairly conceded in court that the defendant never carried out his threat to block the alley of Lot 214 RP and he never experienced any difficulty accessing the Property.

93.  In addition, I note that the defendant had now admitted in his witness statement that he recognised the plaintiffs’ enjoyment of the right of way in Lot 214 RP through Lot 214 B1 on the ground of necessity (paragraph 16 of the defendant’s witness statement, Trial Bundle page 103).

94.  After considering all the circumstances, I find that there is no need for an injunction but the fair and appropriate remedy would be a declaration for an easement of right of way.

Order

95.  I would therefore grant the following:

a.  A declaration that the plaintiffs are entitled to an easement of the right to access to, egress from and use the Car Park on Lot 214 B1;

b.  A declaration that the plaintiffs are entitled to an easement of right of way to use the alley passing through Lot 214 RP and Lot 214B1 for the purpose of accessing to and egressing from the Property; and

c.  The defendant’s counterclaim be dismissed.

96.  The costs of the action be to the plaintiffs to be taxed if not agreed, with certificate for counsel.