CHAU SAU HEUNG v. CHUE JEN INVESTMENT CO LTD

IN THE COURT OF APPEAL

Headnote

    Incorrect plans to be ignored in construction of Deed of Mutual Covenant.

IN THE COURT OF APPEAL

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J U D G M E N T

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Clough, J.A. :

1. The plaintiff in this action appeals against that part of the order of Barnett J. made on the 28th March 1988 dismissing her claim for an injunction requiring the defendant to demolish and remove all "illegal structures" alleged to have been erected in breach of restrictive covenants by the defendant on the ground floor of a block of flats called Grace Mansion, No. 59A Nga Tsin Wai Road, Kowloon.

2. The action and the appeal are the unfortunate result of haphazard conveyancing making use of plans which no longer reflected the true identity or character of what in fact was on the ground at the material time. The Problems which have arisen would have been avoided if the conveyancers concerned had taken reasonable prior precautions to satisfy themselves as to the true identity of the property which was the subject of the relevant assignments and of a deed of mutual covenant.

3. Grace Mansion is a four-storey block of flats comprising three flats on each storey and built on New Kowloon Inland Lot No. 3763. The relevant Crown Lease was assigned to the defendant company on the 16th January 1963. The occupation permit in respect of the newly erected flats was issued on the 3rd December 1963. The defendant is a family company. One of its directors, Dr. Chan Pak Chue, ("Dr. Chan"), was responsible for the management of Grace Mansion on behalf of the defendant from 1963 until the end of 1977 when he migrated to the United States of America. Since then his son-in-law, Dr. Ding, Lik Kiu, ("Dr. Ding"), who has lived there since the flats were completed, has been responsible for their management on behalf of the defendant.

4. Between 1964 and the 3rd January 1970 the defendant retained the ownership of the entire premises of Grace Mansion which was evidently occupied by Dr. Chan and his relations and tenants. During this time Dr. Chan on behalf of the defendant made a number of additions and alterations to the premises to which reference is made below. The nature of the premises before these additions and alterations were made was aptly described by the judge in the following passage at the opening of his judgment:

"a block of 12 flats known as Grace Mansion at 59A Nga Tsin Wai Road. The block of flats faced north onto that road. The block was of a common construction in Hong Kong. The building itself was supported on a number of pillars leaving the ground floor free for 1.2 designated carparking spaces. There were two entrances to the premises, at the east and west ends of the building, with driveways leading from the entrances down each side of the building and along the back or south side to service carparking spaces Nos. 1 to 8 which were at the rear of the building."

5. On the 3rd January 1970 the first sale by the defendant of a flat and parking space was completed. By an assignment of that date ("the first Assignment") the defendant assigned to Mr. Shen Dong Sung ("Mr. Shen") one equal undivided twelfth share in Lot No. 3763 and "of and in the messuages or tenements erections and buildings thereon now known as No. 59A Nga Tsin Wai Road (hereinafter referred to as "the said Building")".

6. In accordance with the usual practice the property assigned under the first Assignment was expressed to include the exclusive right and privilege to hold use occupy and enjoy Flat "A" on the third floor of the building and car parking space No. 9 of the ground floor of the building. Flat "A" was... described by reference to an annexed third floor plan of the building and was shown coloured red on that plan. Car parking space No. 9 was described by reference to an annexed ground floor plan on which it was coloured pink.

7. The defendant excepted and reserved out of the property assigned to Mr. Shen the sole and exclusive right and privilege to hold, use, occupy and enjoy "all the other flats and the other car parking spaces of the said Building". The first Assignment was also expressed to be subject to an existing right of way of the owners of the adjoining Inland Lot No. 3572 exercisable over a portion of inland Lot No. 3763 as indicated on the Crown Lease of the latter Lot. I apprehend that this right of way, to which reference is made below, ran alone a driveway on the western side of Inland Lot No. 3763.

8. A block plan below the third floor plan annexed to the first Assignment showed the building situated on the southern side of Nga Tsin Wai Road and flanked on its eastern and western sides by apparent driveways labelled "Right of Way", but it was common ground at the hearing of the appeal that no easement of way was in fact exercisable along the eastern side of the premises. The ground floor plan annexed to the first Assignment also bore the words "Right of Way" in the same areas as indicated on the block plan. It depicted eight car parking spaces at the rear of the premises and four car parking spaces (including No. 9 in respect of which Mr. Shen was granted exclusive possession) underneath the main structure of the building. The plan gives the impression that it is possible to gain vehicular access to the premises from Nga Tsin Wai Road by way of driveways on the eastern and western sides of the flats and to drive round the hack of the premises to and from the eight car parking spaces without hindrance.

9. However at the date of the first Assignment the features on the ground were materially different from those depicted on the ground floor plan. It was established at the trial that in 1965 Dr. Chan had erected a carport in the south east corner of the premises of sufficient size to accommodate two cars. It was here that Dr. Ding and his wife have always parked their cars. The carport is a steel angle frame structure with corrugated steel roofing. It comprises the existing boundary walls on its south and east sides. On its west side a masonry wall was erected with an access door for pedestrians leading on to the driveway to the south of the premises Vehicular access to the carport was and continues to be obtained from Nga Tsin Wai Road by the driveway on the east side of the premises. The carport is not shown on the ground floor Plan although it occupies the entire area of what was originally the driveway in the south east corner of the premises and effectively prevents any vehicular access via that corner to and from the southern driveway and the area where the ground floor plan depicted eight car parking spaces.

10. In fact, in or about 1965, Dr. Chan had converted car parking space No. 3 into a storeroom and car parking spaces Nos. 4 to 8 inclusive into a chapel. The chapel was used by a religious organisation with which Dr. Chan was connected. To the north of the area depicted on the ground floor plan as car parking spaces Nos. 6 and 7, Dr. Chan had constructed an office for the janitor of the premises at about the same time as the chapel conversion. In the north west corner of the premises, in an area which included car parking spaces Nos. 11 and 12, Dr. Chan had constructed an office in about 1969 which he used as a clinic. Also, at some time prior to 1970 a wall ("the western driveway wall") had been built by Dr. Chan from the north west extremity of the main structure of the building to the north east extremity of the driveway on the western side of the premises over which a right of way was exercisable from Nga Tsin Wai Road to Inland Lot No. 3572.

11. On the same date as but subsequent to the execution of the first Assignment, the defendant and Mr. Shen executed a Deed of Mutual Covenant ("the Deed") in the form that would at the time have been mutually enforceable between the covenanting parties and their successors in title under the former Law of Property (Enforcement of Covenants) Ordinance (Cap. 297). The first recital in the Deed defined the ground comprising Inland Lot No. 3763 as "the premises" and went on to recite that the premises "together with the building thereon now known as No. 59A Nga Tsin Wai Road (hereinafter referred to as "the said building") comprising three flats on each of the first, second, third and fourth floors and twelve car parking spaces on the ground floor thereof" were vested in the parties to the Deed as tenants in common in specified undivided shares.

12. The second recital recited that the defendant was entitled to the sole and exclusive use, occupation and enjoyment of all the flats and car parking spaces in the building other than Flat "A" on the third floor and car parking space No. 9 on the ground floor of the building "as respectively shown on the plans annexed to" the first Assignment. The same recital recited that Mr. Shen was entitled to the sole and exclusive use, occupation and enjoyment of Flat "A" and car parking space No. 9.

13. The third recital recited the agreement of the parties to the Deed to execute it "for the purposes of defining the rights and obligations of themselves and all subsequent owners of undivided parts or shares of and in the said premises and the said Building and providing for the management and maintenance of the said building...".

14. The operative provisions of the Deed are in the familiar form appropriate at the time for the regulation and management of a small block of flats in Hong Kong and the Deed would no doubt have given rise to. no legal difficulties had the features on the ground been as depicted on the ground floor plan annexed to the first Assignment. It suffices for the purposes of these proceedings to mention only the following relevant provisions.

15. The operative provisions of the Deed began with mutual grants by the parties to each other and to their successors in title of common rights which included the right "to pass by down over along and through the common entrances and passages and the driveways staircases and landings of the said building for the purpose of ingress to and egress from the said flat or flats or car parking space or spaces ..."

16. The subsequent mutual covenants entered into by the parties were expressed to be made by the defendant for itself and its successors and assigns on the one part and by Mr. Shen for himself and his executors administrators and assigns on the other part to the intent that the covenants should bind the parties and the owners or owner for the time being of the premises and every part thereof.

17. Clauses 6 and 8 contained or included the following provisions:

"6. Neither of the parties hereto shall make any structural alteration to the said building or to the flat of which he is entitled to the sole and exclusive use, occupation and enjoyment ...

8.     Neither of the parties hereto shall use the common entrances, passages, driveways, stair cases or landings of the said build in for the purpose of drying laundry or hanging or placing or storing any thing thereon or therein."

18. In 1976 the defendant disposed of another flat and car parking space No. 10 to a purchaser. Both car parking spaces Nos. 9 and 10 are accessible along the driveway on the east side of the premises. There seem to have been no problems arising out of the first Assignment and the 1976 assignment.

19. The next assignment was made to the plaintiff whose husband Mr. Chong Seng Kion ("Mr. Chong") appears to be the true beneficial assignee who has acquired an undivided share in the premises in his wife's name. Nothing turns on the precise nature of their respective interests in the premises. However Mr. Chong it was who negotiated the agreement which was completed by the Assignment ("the 1977 Assignment") dated the 17th October 1977 whereby an undivided one twelfth share in the premises was assigned to the plaintiff by the defendant together with exclusive rights of occupation over Flat "C" (where Dr. Chan had lived) on the first floor and car parking space No. 3. The 1977 Assignment was expressed to be made subject to and with the benefit of the Deed. It is this transaction that has led to the present action. For the sake of completeness I mention that in July 1981 the defendant disposed of a fourth flat and car parking space in the premises. The defendant had made no further dispositions of any part of the premises at the date of the trial.

20. It was common ground that Mr. Chong had visited the premises in July 1977 and seen what was then on the ground level including inter alia the carport and parking space No. 3 which was a storeroom at the time. Indeed lie acknowledged under cross-examination that when he and the plaintiff bought their flat they knew that the brochure bore no relationship to the actual situation at the premises.

21. The negotiations between the parties resulted in the plaintiff and the defendant making a professionally drawn Sale and Purchase Agreement dated the 2nd August 1977 governing the terms of the proposed transaction. In the Agreement Flat "C" on the first floor and car parking space No. 3 on the ground floor were referred to as respectively shown and coloured pink on the annexed ground floor and first floor plans. These plans seem to be virtually identical to the plans annexed to the first Assignment and equally inconsistent with what was in fact on the ground at the date of the Agreement.

22. Under clause 4 of the Agreement the date for completion was to he the 1st October 1977, but clause 18 stipulated that the plaintiff should be at liberty to deduct 15,000 from the balance of the purchase price payable on completion and to deposit that sum with the defendant's solicitors as stakeholders. The retained sum was not to be released to the defendant unless it delivered vacant possession of car parking space No. 3 to the plaintiff on or before the 31st May 1978, by which time the defendant was required to have demolished the existing enclosure walls of the car parking space at its own expense. In the event of default by the defendant the retained sum was to be returned to the plaintiff. These provisions were in the event substantially superseded by a subsequent arrangement between the parties whereby the plaintiff agreed to take car parking space No. 4 in substitution for No. 3.

23. Subject to the matter of car parking space No. 3, the Agreement was completed by the 1977 Assignment on the 17th October 1977. Under the 1977 Assignment the defendant (following the same pattern as the first Assignment) assigned to the plaintiff one the and in the undivided twelfth share in the ground comprising Inland Lot No. 3763 and "of and in the messuages erections and buildings thereon now known as No. 59A Nga Tsin Wai Road".

24. Again following the same pattern as the first Assignment, the property assignment under the 1977 Assignment was expressed to include the right to the exclusive use, occupation and enjoyment of flat "C" on the first floor and car parking space No. 3 on the ground floor. The flat and the car parking spaced were described respectively by reference to annexed first floor and ground floor plans on which they were coloured pink. These plans were virtually identical to those annexed to the Agreement and to all intents and purposes the same as those annexed to the first Assignment. The 1977 Assignment was expressed to he made subject to and with the benefit of the Deed.

25. There was a material difference between the first Assignment and the 1977 Assignment. Thus the 1977 Assignment did not contain any reservation by the defendant of exclusive rights of occupation and enjoyment of any part of the premises. As, in the absence of enjoyment varying their rights, tenants in common enjoy unity of possession of the same property, albeit in undivided shares, it follows that (subject to possible questions of rectification) the defendant has failed to exclude the plaintiff from at least those parts of the Premises in respect of which it had not already prior to the 1977 Assignment granted exclusive possession to others under the first Assignment and the 1976 assignment. The 1977 Assignment made no reference to the right of way over the western driveway on the premises, but nothing turns on that.

26. There is much that was disputed regarding the events subsequent to the 1977 Assignment and there are important matters about which the evidence is not altogether clear, but the narrative of background fact can betaken a little further in reliance on matters which do not seem to have been disputed and on unchallenged findings of fact by the judge.

27. Car parking space No. 4 was not used by Mr. Chong until the middle of 1980 although it was made available by the defendant in 1978. During the intervening period Mr. Chong owned a large car which he parked in the street. When he eventually made use of car parking space No. 4 he had acquired a smaller car. The evidence of Mr. Tse Shek-foon ("Mr. Tse"), the defendant's builder, which the judge accepted, was that he had done mosaic tile work involving the use of scaffolding at the premises from the end of 1979 until about May 1980. Two years before doing the mosaic tile work Mr. Tse had done work on car parking space No. 4 to make it available for the plaintiff.

28. It was common ground that after the 1977 Assignment, when Mr. Tse did the mosaic work he put the existing metal gate into the western driveway wall. It is through that Fate that Mr. Chong drives his car in order to obtain access to car parking space No. 4. Mr. Chong insisted that at the date of the 1977 Assignment there was no gate in the wall. Mr. Tse and Dr. Ding's evidence was that there had been a different gate in the wall which Mr. Tse widened when he did the mosaic work. Dr. Ding said that in retrospect the original gate had not been wide enough for Mr. Chong's big car.

29. Be that as it may, the judge found that no complaint was made to the defendant until September 1980. On the 16th September 1980 there began a protracted correspondence between the parties' solicitors which continued until the issue of the plaintiff's writ on the 5th August 1985, by which time there had been two changes of solicitors by the plaintiff and numerous threats by the plaintiff to bring proceedings against the defendant.

30. The plaintiff's complaints began with her solicitor's letter dated the 16th September 1930 contending that the carport had been erected in breach of covenant under the Deed and complaining that a vehicle was being permitted to park on the western side of the carport so as to impede access to car parking space No. 4. On the 21st April 1981 there was a complaint that the use of part of the ground floor of the premises as a chapel was in breach of the terms of the Deed.

31. On the 22nd December 1982 new solicitors came on the scene for the plaintiff with a letter complaining that the conversion of part of the ground floor for user as a chapel, a sheltered car parking space and the carport infringed the Deed. By this time the chapel had been moved to the area on the ground floor formerly occupied as Dr. Chan's clinic and office and the area previously used as a chapel had reverted to user as car parking spaces, Nos. 5 and 6 and Nos. 7 and 8 being respectively combined to provide two enlarged spaces. The judge found that when the chapel was relocated it took up "a somewhat expanded area". I will return to this matter below.

32. The correspondence between the parties' solicitors shows that the plaintiff was in frequent disputes with the defendant (which had been appointed manager of the building under the Deed) concerning the defendant's management of the building and her contribution towards management expenses. The plaintiff's complaints were not only resisted but met with cross complaints on the 10th February 1983 from the defendant's solicitors about the cockloft constructed by the plaintiff in car parking space No. 4 and an extension to the plaintiff's flat.

33. An attempt to come to terms in 1983 came to nothing. Eventually matters came to a head when, as a result of a dispute between the parties regarding repairs to the flushing water system of the flats, the defendant cut off the water from the plaintiff's flat. This led to the issue of the plaintiff's writ on the 5th August and to interlocutory proceedings for the restoration of flushing water to her flat. The writ was primarily directed to seeking relief in respect of the restoration of the flushing water to the plaintiff's flat, but it also sought an order for the demolition and removal of all "illegal structures" on the ground floor of the building and damages. The structures in question were particularised by reference to a ground floor plan of the premises which identified the carport and an alleged structure shown as being immediately to the west of car parking space No. 10. The latter structure was the chapel and the janitor's office. The dispute concerning the flushing water was happily settled before the trial which was only concerned with the claim for a mandatory injunction and damages in respect of the allegedly infringing structures.

34. The amended statement of claim alleged that the structures in question had been erected "on the common parts of the Ground Floor of Grace Mansion" on dates unknown to the  plaintiff but prior to August 1980 and that they infringed the defendant's covenants in the Deed. For the purposes of this appeal only clauses 6 and 8 are now relevant.

35. The defendant filed a defence and counterclaim. The counterclaim was abandoned at that close of the plaintiff's case. In the defence the defendant admitted erecting the carport in 1965. As to the chapel and the janitor's office, the defendant admitted having erected a wall to the west of car parking space No. 10 sometime before 1969 but did not admit that the relevant shaded area on the plan annexed to the writ showed accurately the position of the wall or the area enclosed thereby. It was denied that the relevant structures infringed the Deed or were on common parts for the purposes of the Deed. In the alternative, the defendant pleaded that the plaintiff's action was wholly unmaintainable on account of laches, acquiescence, delay and/or waiver.

36. By her reply the plaintiff admitted that the defendant had erected the carport before she became the registered owner of her flat, but made no further admissions regarding the carport save that she had no knowledge as to when the carport was erected by the defendant. The plaintiff also admitted in her reply that the wall referred to by the defendant in its amended defence (to the west of parking space No. 10) had been erected before the plaintiff became the registered owner of her flat, but made no further admissions regarding the defendant's pleadings in respect of the chapel and the janitor's office.

37. In the course of matters pleaded in denial of the defendant's allegations of laches, acquiescence, delay and waiver, the plaintiff pleaded that when she and Mr. Chong made their second visit to the premises before she became the registered owner of her flat, she had complained to Dr. Chan through Mr. Chong about the carport. The plaintiff further pleaded that Dr. Chan had then represented to the plaintiff and Mr. Chong that the defendant would demolish the carport when the plaintiff completed the purchase of her flat.

38. At the trial the plaintiff called one witness, her husband Mr. Chong. The plaintiff also relied on a report prepared by an architect, Mr. Russell, on her behalf. By agreement of the parties this report and the report of the defendant's architect Mr. Kho Kien Au & the Cho Associates were admitted in evidence and treated as experts' opinions. The defendant's witnesses were Mr. Tse, the defendant's builder and Dr. Ding. A hearsay notice had been served in respect of a statement made by Dr. Chan and Mr. Kho's report was admitted as indicated above.

39. The judge held in favour of the defendant that there had been no breach of the Deed in respect of the carport and the chapel (including the janitor's office). Accordingly he concluded that the plaintiff's claim should be dismissed. However, he very sensibly went on to deal with the other issues in case the matter should go further. He held that the alleged illegality (under the Building Ordinance, Cap. 123) of the structures in question had not been established by the plaintiff's evidence and that it was in any event irrelevant. He dealt with a question concerning fire risk which is not material on this appeal. Finally he considered the defences of laches, acquiescence, delay and waiver raised by the defendant which he regarded as overlapping defences. He held that those defences had been established, but clearly this was on the basis that the plaintiff's claim had already failed on the first issue concerning the construction of the Deed.

40. On appeal Mr. Edward Chan for the plaintiff contended that the judge erred when holding that the carport and the chapel (by which reference I intend hereafter to include the janitor's office) did not constitute a breach of the defendant's covenants under the Deed. He also contended that the judge wrongly upheld the defence of laches and related defences and that he ought to have granted the relief sought by the plaintiff.

41. On the crucial question whether the carport and the chapel (as located both before and after 1982) infringed the Deed, the judge was of the view that if the relevant structures had been erected after the 1977 Assignment and possibly after the date (the 3rd January 1970) of the Deed they would have been erected in breach of clauses 6 and 8 of the Deed.

42. He accepted the argument which had been advanced below by Miss Vibert for the defendant that the Deed was to he construed as recognising the position as it was in 1970. He appears to have rejected Miss Vibert's argument that the Deed was not to be construed to produce the result that the carport was part of a driveway or any other common area specified in the Deed. He indicated that whilst he accepted that the carport "which is occupied and used exclusively by somebody" could not be a driveway or a common area, he considered that -

"... in my view that really begs the question as to whether or not these structures were embraced by the DMC [the Deed] as part of the building. If there were, then they were and remain structures of which no complaint can be made, at least on the basis of the DMC. But if those structures, i.e. the carport, the chapel and the clinic, were not so embraced, they were and remain structures in breach of Clauses 6 or 8 of the DMC for the reasons which I have already outlined."

43. The judge went on to observe:

"In my view, it is simply not possible to argue that, as at 1970, the carport could not be a driveway. In 1970, the carport was either an established feature embraced by the DMC or it was a structure on what was unarguably a common area, i.e. a driveway. In my view no real question of construction of the DMC can arise."

44. After alluding to the contention of Mr. Chung, counsel for the plaintiff below, that the carport and the chapel were not capable of ownership (on appeal Mr. Chan preferred "exclusive possession.") and therefore constituted infringements of the Deed, the judge arrived at his conclusion on this issue in the following passage of his judgment:

"I have no hesitation in finding that the DMC recognised the position as it prevailed in 1970. To find otherwise would, in my view, be to fly in the face of common sense. The carport, the clinic and the chapel were, in 1970, substantial and obvious structures. In my view, only an express stipulation could have had the effect of excluding them from being part of the building that was embraced by the DMC."

    The question of illegality apart, an owner may erect what he likes upon his land. If he then sells part, the purchaser I must take what he purchases subject to what is already there upon the land I confess I can see no distinction between a developer in the usual sense of the word, for example, Mr. Li Ka-shing, who builds upon land which he has acquired and immediately sells off the individual flats for gain, each purchaser taking that its and the surrounding development as he finds it, and the present case where the defendant was effectively a developer selling flats upon its land as the development was constituted in 1970 and not in 1965.

    Until 1970, there were no common entrances, driveways or passages defined or needing definition because the whole of the property was in single ownership. In 1970, the defendant clearly conceded rights only over common areas as then existing and retained exclusive possession of the carport, the clinic and the chapel. Put an other way, the defendant did not relinquish areas to or over which it had until that time title and exclusive possession, In those circumstances, therefore, the plaintiff's claim must be dismissed."

45. On appeal Mr. Chan for the plaintiff attacked the reasoning of the judge, with particular reference to his reliance on the proposition that as the carport and the chapel were in the exclusive possession of the defendant before the Deed and were therefore part of the building, and as the Deed did not expressly exclude those structures from being part of the building, they continued to be structures of which the defendant were lawfully in possession and to which clauses 6 and 8 of the Deed did not apply.

46. As Mr. Chan rightly contended, the parts of the premises to which the parties to the Deed were entitled to exclusive occupation and enjoyment are to be identified by reference to the first Assignment. That instrument does not appear to have been before the judge. It was admitted as additional evidence on the unopposed application of Mr. Chan at the hearing of the appeal. Mr. Chan contended that the first Assignment assigned a one twelfth undivided share in the entire premises to Mr. Shen together with the right to exclusive possession of his flat and car parking space No. 9 and that the defendant had only reserved to itself the right to exclusive possession of 11 flats and car parking spaces.

47. On this basis the defendant vas not entitled to exclusive possession of the carport after the date of the first Assignment. Miss Vibert contended that the reservation by the defendant under the first Assignment was not expressed to be of 11 but of "the other car parking spaces", that the carport comprised parking spaces in 1970 and was therefore within the reservation. Unhappily for the defendant the 1977 Assignment contains no similar reservation. Whilst the introduction of the first Assignment demonstrates that the judge may well have been wrong in assuming that the defendant lawfully remained in exclusive occupation of the carport after the first Assignment, I agree with Miss Vibert's contention that even if (which I would be prepared to assume without actually deciding) the defendant was not entitled to exclusive possession of the carport after the first Assignment, that cannot be decisive of the issue which arises concerning the effect of the Deed.

48. I agree with Miss Vibert's submission that it does not provide the answer to consider whether or not the carport or the chapel structures are common parts of the premises to which all the common owners are entitled to possession, because the real question to be decided is whether those structures infringe clauses 6 or 8 of the Deed.

49. In my judgment the decisive question must be, as both counsel seemed to agree on appeal, whether or not the plan of the premises annexed to the first Assignment and referred to in the virtually contemporaneous Deed, is the governing factor in the interpretation of the Deed.

50. Mr. Chan for the appellant contended that the plan should control the position. The Deed was intended, he argued, to regulate not only the rights of the defendant and Mr. Shen who were parties to it, but also the rights of all subsequent purchasers of any interest in the premises, including those who would not have inspected the premises. The judge was therefore wrong, he contended, to hold that the Deed recognised the position as it prevailed in 1970. He further submitted that having held that the relevant structures would have infringed the Deed if they had been erected after its date, the judge was wrong to hold that the mere fact that they were erected before that date did not constitute an infringement.

51. Mr. Chan argued that the Deed which looked to the future regulation of the premises, must have contemplated reference to the plan annexed to the first Assignment because it referred in terms in the recitals to 12 flats and 12 car parking spaces, whereas if one had regard only to the actual land there were not 12 car parking spaces, but only five. If the plan was ignored, the reference in the Deed to 12 car parking spaces did not, he submitted, make sense. He emphasised that if the Deed were to be construed as if it related only to the premises in their condition at the date of the Deed, it would follow that when the defendant subsequently altered the area originally designated as car parking spaces Nos. 4 to 8 to enable it to revert from being a chapel to car parking spaces it must have been in breach of the covenants in the Deed.

52. Mr. Chan accepted that the strongest argument against treating the plan as the governing factor was that it produced the result that the defendant was in immediate breach of its covenants when it executed the Deed. However the remedy was, Mr. Chan contended, simple - all the defendant had to do was to perform its implied obligation to demolish the offending, structures.

53. On the footing that the plan was the decisive factor, Mr. Chan conceded that the carport did not constitute a structural alteration to the building for the purposes of clause 6 of the Deed, but he maintained that the chapel (i.e. the structure used as a chapel after 1982) was such an alteration. He contended that the carport infringed clause 8 of the Deed because it was on a driveway or passage and the materials constituting the carport were being placed or stored on the driveway or passage. I emphasise that it was never any part of the pleaded case of the plaintiff that she was entitled by virtue of her ownership of a one twelfth undivided share in the premises under the 1977 Assignment to the use and enjoyment of the carport because the defendant had not reserved exclusive possession of it under that Assignment; nor was there any claim for the removal of the two cars parked in the carport as constituting chattels placed or stored on a driveway.

54. For my part, whilst I find myself unable, with respect, to accept all the reasoning of the judge, I consider that he reached the right result on this issue. I agree with the contention of Miss Vibert that the Deed must be construed in the light of the circumstances on the ground in 1970 and that the plan is not to be treated as the governing factor.

55. I accept that in one sense a neat and tidy result would be achieved if the plan were permitted to prevail. But the crucial question is whether it was the intention of the parties to the Deed, as manifested in that instrument, that the plan should control the operation of the Deed to the extent of creating an implied obligation upon the defendant under the Deed to demolish structures which it had lawfully erected on its own property prior to entering into the Deed.

56. I begin with the well settled and fundamental principle, relied upon by Miss Vibert, that the Deed is to be construed in accordance with the circumstances at the time of its execution. This principle finds expression in Halsbury's Laws of England, 4th edition, Vol. 12, at paragraph 1490 where it is stated in the following terms (the underlining is mine):

"Extrinsic evidence is, however, admissible both to ascertain where necessary the meaning of the words used, and to identify the persons or objects to which they are to be applied, for example to connect the language of a deed with the property conveyed, and, since the meaning and the application will depend upon the circumstances surrounding the author at the time when the words were used, the same principle requires that evidence of such circumstances should he admitted."

57. The leading authority for the words underlined is to be found in the dictum of Lord Davey in Bank of New Zealand v. Simpson⁽¹⁾ at p.188; see also the authority cited by Miss Vibert, St. Edmundsbury and Ipswich Diocesan Board of Finance v. Clark (No. 2)⁽²⁾ at pp. 476G-477 where the same principles were applied in the construction of a grant of a right of way.

58. The recitals in the Deed contain adequate description of the premises as a whole by reference to its road number, Lot number and Crown Lease and no difficulties arise concerning the boundaries of the premises. The difficulties arise in connection with the implementation under the Deed of its recited purposes at the date of its execution, namely to (1) define the rights and obligations of the parties to the Deed and their successors in title as tenants in common of the "premises" and "the said Building" and (2) provide for the management and maintenance of the "said building".

59. The initial recitals of the Deed defined "premises" as the ground registered as Lot No. 3763 together with the building thereon "now known as No. 59A Nga Tsin Wai Road" which is defined as "the said building" which in turn is recited to comprise 12 flats (three flats on each of four floors) and 12 car parking spaces on the ground floor of the building.

60. It follows that whilst the use of the word "comprise" does not imply that any part of the premises not identifiable as a flat or car parking space cannot be part of the building "known as No. 59A Nga Tsin Wai Road", reference to "the said building" in the Deed are to be interpreted as referring at least to the area of 12 flats and 12 car parking spaces.

61. The 12 flats were readily identifiable by inspection at the date of the Deed, but only five car parking spaces were so identifiable. In my judgment the plan annexed to the first Assignment may properly be referred to in order to clarify the latent ambiguity which arises in the wording of the Deed itself when inspection discloses that 12 parking spaces are not to be found on the premises.

62. Whilst the plan is not annexed to the Deed it was annexed to the contemporaneous first Assignment which is closely related to the Deed and referred to in the recitals of that instrument. Although the plan was only referred to in the first Assignment for the purpose of identifying the flat and the car parking space in respect of which Mr. Shen became entitled to exclusive use, occupation and enjoyment, it was clearly a plan of the premises which showed the area of 12 numbered parking spaces. I can therefore see no reason why the plan should not be looked at solely for the purpose of identifying the area of the car parking spaces contemplated by the Deed as comprised in the building notwithstanding the fact that inspection of the ground showed that those areas were not in fact being used as car parking spaces. In this connection there was no evidence to suggest that Mr. Shen was unaware of the position on the ground at the date of the first Assignment and the Deed.

63. Accordingly, In my judgment it follows that when clause 6 of the Deed precludes the making of any structural alteration to the building by any party (oddly enough followed by an express reference to his flat) the effect of the clause is to Preclude the making of any alteration inter any to whatever was situate at the date of the Deed in the areas identifiable on the plan as car parking spaces Nos. 1 to 12 inclusive.

64. As regards the references in the Deed, and in particular in clause 8, to driveways (in conjunction with common entrances, passages staircases and landings) of the premises, there is no ambiguity in the word driveway. The driveways contemplated by the parties to the Deed could have been specifically referred to by reference to the plan annexed to the first Assignment or to a plan annexed to the Deed itself, but this was not done. The evidence clearly established that the driveways were readily identifiable at the premises at the date of the Deed and at the date of the 1977 Assignment. The evidence also established that on both those dates there was a carport in the south east corner of the premises and that the driveways on the south and east sides of the premises terminated at the carport.

65. Therefore, in my judgment no latent ambiguity in the Deed was disclosed by inspection of the premises to determine where the driveways were. Accordingly there was no need to have regard to the plan annexed to the first Assignment to identify them. Furthermore in so far as the plan showed the area of the carport as driveway it was established by the evidence to be falsa demonstratio and should therefore be rejected.

66. Accordingly, although I come to the conclusion by a different route from the judge, I consider that his decision on the interpretation issue was right. As regards the carport, it seems to me that, whether or not that structure is to be regarded (as the judge seemed to think) on the proper interpretation of the Deed as part of the building at the date of that instrument, it cannot be regarded (and here I differ, with respect, from the judge) as having been part of the driveway at that date because the evidence shows that physically it was not, and the plan which indicated the contrary was not declared in the Deed to be intended to control the subject matter of the Deed and was clearly proved to have been out of date at all material times.

67. As regards the chapel as existing since 1982, the whole area of that structure as indicated on an unchallenged plan of Mr. Russell, the plaintiff's architect, including car parking spaces 11 and 12, was clearly part of the building for the purposes of the Deed. However there is nothing in the Deed which expressly or impliedly requires the area of parking spaces 11 and 12 or the area of the rest of the chapel structure to be used as parking spaces or for any other purpose.

68. Mr. Chan contended that to interpret the Deed in this way produces an unsatisfactory result because it means that every time the defendant made any alteration to the structures in the area of the original car parking spaces it was acting in breach of the Deed. However, there being no claim for rectification the court is left in the position where the Deed must be taken to express the intention of the parties that there was to be no structural alteration in the specified areas after the date of the Deed.

69. Furthermore, I have no hesitation in rejecting the construction of the Deed before by Mr. Chan. On one view it produces the result that the defendant was in breach of covenant under the Deed before becoming a party to it. That obviously cannot be right so the argument has to be that the Deed created by way of implied representation or condition an obligation on the part of the defendant to demolish the carport and the chapel (as it was in 1970) and Dr. Chan's office and clinic. Applying settled Moorcock⁽³⁾ principles, I am wholly unable to accept that in the circumstances pertaining at the date of the Deed it must obviously have been the intention of both the parties to the Deed, in order to give efficacy to the transaction effected by that instrument, that the defendant should immediately demolish the carport, the chapel an Dr. Chan's office and clinic. It seems to me that the officious bystander would recognise at once that the parties had made use of out of date plans which did not depict accurately the property which was in fact the subject of the Deed and that the last thing they contemplated was that the defendant should make major alterations to the premises upon execution of the Deed.

70. The judge rejected the plaintiff's plea in her reply and Mr. Chong's evidence that Dr. Chan orally undertook before the 1977 Assignment that he would demolish the carport. That decision is not in issue on the appeal. No express or collateral representation of a like nature by the defendant to Mr. Shen before the execution of the Deed was relied upon by the plaintiff.

71. Mr. Chan argued that the plan should prevail and control the transaction because otherwise a future purchaser who inspected the plan in the Land Rgistry and then purchased a share in the premises would be misled regarding its layout and true characteristics. But this wrongly presupposes that a purchaser is not expected to satisfy himself before purchase regarding such matters and that the registration of a plan in the Land Registry is a representation to the world that the character of the property is as depicted on the plan and that there has been no previous and will be no subsequent alteration to or development of the land. Moreover the application of Mr. Chan's approach produces absurd results in relation to the plaintiff who in fact not only inspected the premises but stipulated in the agreement for sale that alterations were to be made to part of the premises by the defendant.

72. Belatedly, in his reply, so that Miss Vibert had no opportunity to deal with the point, Mr. Chan contended that the recitals in the Deed created estoppels between the parties. On this basis he contended that the parties and their successors in title were estopped from denying that there were 12 car parking spaces in the areas indicated on the plan annexed to the first Assignment. Estoppel had not been pleaded and it was not raised in the Amended Notice of Appeal. If it had been pleaded it seems likely that it would have been met with a plea of common mistake and a claim for rectification in reliance on the principles enunciated by Lord Maugham in Greer v. Kettle(4) at pp. 171-2. Furthermore there was no evidence of reliance on the recitals by Mr. Shen or by the plaintiff. Accordingly I do not consider that the estoppel argument should be either entertained or accepted by this court.

73. Having found for the defendant on the interpretation issue, the judge concluded that the plaintiff's claim should therefore be dismissed. He only dealt with the other issues in case his decision on the interpretation issue should be reversed on appeal. When he dealt with the laches, acquiescence, delay and waiver defence be did so on an all or nothing basis and did not deal with them on the footing that there may have been an addition to chat is now the chapel structure after 1970 which required special consideration. There appears to have been no argument along those lines below.

74. However, in the preliminary stapes of his judgment the judge used language which indicated that he regarded the chapel as it was from 1982 onwards as taking up a larger area than had been occupied by Dr. Chan's office and clinic. Thus he first observed that in 1967 Dr. Chan had constructed on the ground floor of the premises an office which he used as a clinic. He described that structure as -

"...an office which enclosed car parking spaces Nos. 11 and 12 and a measure of what I will call the common areas adjacent to those car parking spaces."

75. Later In his judgment he described the relocation of the chapel in 1982 in the following passage:

"By 1982 as more flats were being sold or leased, the chapel was removed from car parking spaces 5 to 8 and relocated at what had been Dr. Chan's clinic but with a somewhat expanded area."

76. If the judge was intending to make a finding that the office and clinic structure was enlarged (in the sense of structural enlargement) in 1982 when it became a chapel it is surprising that he did not hold that, to that extent of the enlargement, the defendant infringed the Deed, because the judge had earlier held that if the carport and chapel had been erected after 1977, and even possibly after 1970, when the Deed was executed, there could be no question but that the defendant was in breach of the Deed.

77. In his oral submissions Mr. Chan understandably seized upon the reference to "a somewhat expanded area" in relation to the chapel in its present situation and contended that there was here a finding of enlargement of the chapel after 1970 which the plaintiff could rely upon as a breach of the Deed. However, although there was a reference to this point in the chronology he produced at the hearing of the appeal, it was not raised in the plaintiff's amended grounds of appeal, nor was it mentioned in Mr. Chan's skeleton argument. I was left with the impression that the point was only really pursued by Mr. Chan because the court was concerned with the obscurities in the evidence concerning this matter.

78. Certainly, Miss Vibert appeared to be taken by surprise when Mr. Chan referred to the expanded area of the chapel. She intervened to contend that the evidence was that there had been nothing built in the area since 1969. She developed this argument (which Mr. Chan did not accept) when arguing the appeal, although there was no respondent's notice seeking to set aside the judge's finding to the extent that it amounted to a finding of structural enlargement of the clinic and office structure.

79. For my part consider that as the court permitted this important point to be argued, albeit when it had not been raised by either the grounds of appeal or a respondent's notice, it should be determined by the court.

80. The point was not specifically pleaded and Miss Vibert informed the court (without dissent from Mr. Tommy Chung who appeared with Mr. Chan on the appeal and represented the plaintiff below) that the trial proceeded on the basis that the present chapel was formerly the clinic and office of Dr. Chan and that the issue between the parties was the location of the eastern wall of the present chapel.

81. On reflection I agree with Miss Vibert that on the pleadings, to which I have already referred, the parties seem to have raised the issues (1) whether the eastern wall of the chapel structure was built in 1969 or at some time thereafter but prior to the date of the 1977 Assignment and (2) whether the position of the wall in question was as indicated on the plan attached to the writ. On issue (1) the plaintiff was not alleging a specific date for the erection of the wall. On issue (2) the defendant was not specifying the alleged position of the wall but challenging the accuracy of the plan attached to the writ. There seems to have been no pleading by the plaintiff that the structure in which the chapel is now accommodated has ever been enlarged.

82. The chapel area as shown on the plan attached to the writ was certainly a larger area than the chapel area depicted on Mr. Russell's plan, which showed the chapel's eastern boundary as initially running in a straight line from due north of the western side of car parking space No. 10 along that side to its southerly extremity before forming an indenture running due west for a short distance and then due south, so as to terminate at what appears to be a main wall of the building.

83. Mr. Russell's report was accepted in evidence without challenge. He had not been able to gain access to the chapel. In his report, he commented that "... this work appears to have been constructed to a higher standard with masonry wa11s." The report of Mr. Kho for the defendant which followed a site visit and was evidently prepared after Mr. Russell's report, does not take the matter further. It refers to the areas described in Mr. Russell's report without disagreement regarding the accuracy of Mr. Russell's plan and merely observes that the owners of spaces 11 and 12 have enclosed the space with brick walls and steel framed windows as a protection against the weather and that it is used as a meeting place for church activities.

84. Mr. Russell's unchallenged evidence therefore appears to have resolved the pleaded issue regarding the position of the chapel structure's eastern wall by fixing it as indicated on his plan and not as indicated on the plan attached to the writ. As regards the date when that wall was erected the plaintiff understandably called no evidence. On this issue the defendant relied on the evidence of Dr. Dina and Mr. Tse the defendant's builder.

85. Mr. Tse gave evidence first. In chief he said that he had done building work at the premises from time to time since 1965. He said he had erected walls in the area of car parking spaces Nos. 11 and 12 in 1969 and that tae walls were still there as he built them but he could not say if two spur walls were still standing. He is recorded as saying "Now used as chapel there" and that he had not done any work in that area since.

86. The difficulty about his evidence is that he was asked to mark on a plan (Exhibit D1) the position of the walls which he had erected in l969 and he complied by drawing blue lines in very strange positions, bearing, in mind that he said the walls he built in 1969 were still there and the position of those walls had been fixed by Mr. Russell's plans in a quite different position enclosing a larger area than the walls drawn by Mr. Tse. In this connection Mr. Tse seems to have displayed lack of orientation when he marked the same plan to show the position where the gate in the western driveway wall had been in 1965. He sited the gate on the western side of the driveway instead of its actual position (as indicated in the photographs of the widened gate) on the eastern side of the driveway. Mr. Tse was cross-examined, but not on his evidence concerning these matters.

87. Dr. Ding in chief, marked the position of the position's office which he said had been there since 1965. He said that Dr. Chan had built an office on the ground floor of the premises and started using it in about 1969. He then drew a line on Exhibit D1 in pencil and the judge recorded him as saying the following:

"Line I drew is a wall. Put there when Dr. Chan moved office there in 1969. I think it is still there. Area now used as a chapel."

88. The line drawn by Dr. Ding on the plan to indicate the position the wall ran north and south to the north of and in line with the eastern side of the janitor's office. It was an appreciable distance to the east of walls drawn parallel to it by Mr. Tse. If the walls were still there at the date of the trial as Dr. Ding testified, his line could not have been in the correct position. He admitted under cross-examination that the area indicated by Mr. Russell's plan as the chapel area was then used as a chapel. It was not suggested to him or to Mr. Tse under cross-examination that the original structure which servers as Dr. Chan's office and clinic had been extended when the chapel was moved there in 1982 or at any time prior to that and after 1969.

89. The judge made it clear when considering the evidence of the witnesses on both sides in relation to the defences of laches, acquiescence, delay and waiver, that he regarded Dr. Ding and Mr. Tse as credible witnesses whose evidence concerning, matters material to those defences he preferred to that of Mr. Chong. He did not, for obvious reasons, deal with the effect of the evidence of Dr. Ding and Mr. Tse regarding the position of the eastern wall of the chapel structure and, the matter not having been pleaded or pursued in evidence at the trial he was evidently not asked by counsel on either side to decide whether or not the structure of the chapel (formerly Dr. Chan's office and clinic) had been extended after the date of the Deed.

90. In my judgment it is in that context that the judge's reference to the "somewhat expanded area" of Dr. Chan's office and clinic, when converted to a chapel, must be considered. It seems to me that the windfall finding of fact with which, at first sight, the judge appears to have presented the plaintiff is illusory. Apart from the fact that there was no issue of enlargement in the pleadings in relation to the present chapel, there was no firm evidence to justify the reasonable conclusion on the balance of probability that there had been any structural enlargement of the chapel structure subsequent to 1969 when the structural walls were first erected to enclose an area to serve as Dr. Chan's office and clinic.

91. The lines drawn on the plan Exhibit D1 support the case for enlargement, but both witnesses, and particularly Mr. Tse, clearly testified that the original walls were still there at the date of the trial and Mr. Tse, the defendant's builder over the years, said he had done no more work in the area since 1969. The evidence was at best equivocal and if and so far as it may he said that the judge's reference to a "somewhat expanded area" was a finding of enlargement I conclude that such a finding was contrary to the weight of evidence and should in all the circumstances be rejected notwithstanding the absence of a respondent's notice.

92. Accordingly I consider that the decision of the judge dismissing the plaintiff's claim consequent upon the judge's finding for the defendant on the issue concerning the interpretation of the Deed was right. Although the other issues which the judge dealt with below have been argued on appeal, I can see no useful purpose in resolving them in this court. I would dismiss the appeal.

Cons, V.-P:

93. As my Lord has observed, the parties to these proceedings first took up the cudgels against each other some eight years ago. For reasons which were highlighted during the course of argument, but which are not pertinent to the disposal of this appeal, there may remain even now matters still unsettled. It is to be hoped that they can be resolved without recourse to further legal conflict.

94. The sole question for this Court is whether the judge below was right to conclude that the Defendant was not in breach of either Clause 6 or Clause R of the Deed of Mutual Covenant. Clause 6 presents little difficulty. Mr. Chan concedes that the Plaintiff cannot show a breach thereof with regard to the carport, - which, incidentally, would be more accurately described as a double garage, - because there had been no structural alteration after the Deed itself had been executed. My Lord has carefully analysed the evidence with regard to the "somewhat expanded area" of the chapel and I agree with his conclusion that the finding should be rejected. It follows by the same token that there is no breach of Clause 6 in that respect either.

95. In order to succeed on Clause 8 the Plaintiff has to establish first that the areas on which the carport and chapel stand are either "common entrances, passages, driveways, staircases or landings" and second that the Defendant is using them for "placing or storing" something thereon. That something, in Mr. Chan's contention, is the material of which the carport and chapel are made. The contention stretches the meaning of the words "placing" or "storing" to a degree which, particularly in the context in which they are used, I find unattractive. But as in my judgment the Plaintiff fails on the first condition, I need say no more.

96. The physical evidence being against him, Mr. Chan, in order to establish that the areas in question do fall within one or other of the specified categories, has to turn to the plans annexed to the first Assignment and referred to in the second recital of the Deed. The crucial question is whether the plans, which do show the areas to be so qualified, override the position on the ground.'

97. It may be convenient to set out that part of the first Assignment wherein the plans are mentioned -

"the Vendor BOTH hereby assign unto the Purchaser ALL THAT one equal undivided twelfth part or share of and in ALL THAT the said piece or parcel of ground situate lying and being at Kowloon City aforesaid and registered in the Land Office as NEW KOWLOON INLAND LOT NO. 3763 and of and in the messuages or tenements erections and buildings thereon now known as No. 59A Nga Tsin Wai Road (hereinafter referred to as 'the said Building') TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy FIRST ALL THAT FLAT "A" on the THIRD FLOOR of the said Building as shown on the third floor plan hereto annexed and thereon coloured Pink (hereinafter referred to as 'the said Flat') AND SECONDLY ALL THAT CAR PARKING SPACE NO. 9 on the GROUND FLOOR of the said Building which said car parking space is more particularly delineated and described on the ground floor plan hereto annexed and thereon coloured Pink .."

98. As it seems to me, the plans are intended merely to identify more clearly those parts which were excluded for the private benefit of Mr. Shen from the joint possession which otherwise flowed from the execution of the assignment. The subsequent reservation of "all the other flats and the other carparking spaces" did the same for the Defendant, but to the draftsman of the Deed, being obviously ignorant of the true position, there was no need for these to be more clearly identified. I accept that there is room for argument that the plans in fact confuse rather than make more clear the identities of the parts concerned. That however relates to a different question. So far as the present question is concerned I cannot for my part find in the simple annexation of the plans any indication of intention to deal at all with the other parts of the land or the messuages, tenements, erections or buildings thereon that were included in the assignment. Amongst those, of course, were the carport and the chapel.

99. The second recital of the need of Mutual Covenant is in these terms -

"AND WHEREAS the First Owner is entitled to the sole and exclusive use occupation and enjoyment of all the flats and car parking spaces in the said building other than Flat 'A' on the third floor and Car Parking Space No. 9 on the ground floor of the said building respectively shown on the plans annexed to an Assignment bearing even date herewith but executed prior to these presents made between the First Owner on the one part and the Second Owner of the other part and intended to be registered in the Land Office immediately prior to these presents and the Second Owner is entitled to the sole and exclusive use occupation and enjoyment of the said Flat 'A' and the said Car Parking Space No. 9."

100. It seems to me that again the plans are mentioned for nothing more than the identification of those parts subject to exclusive enjoyment. I am not able to read into that simple reference to the earlier document an intention that in relation to the later document the plans should be used for a much wider purpose than had been intended originally. For this reason I find that they can be of no help to Mr. Chan and that the judge was right to reject the Plaintiff's claim.

101. I agree with my Lord that nothing is then to be gained by dealing further with the other questions canvassed before the judge below, and also that we should not at this stage for the first time entertain a plea in estoppel. I too would dismiss the appeal.

Hunter, J.A. :

102. I much regret that I am unable to agree with my Lords' conclusions upon the true construction of the deed of mutual covenant of 3rd January 1970 (the deed). I agree that the whole problem in this case stems from a use of block plans in the drafting both of the first assignment and of the deed, which plans then bore no relation to the existing situation on the ground floor. I further agree that the problem in such circumstances is to ascertain the intentions of the parties not in gross but as manifested in the deed itself.

103. The purpose of the deed was to define, control and regulate future rights of user in the premises by the first and by all future tenants in common. The chosen method was to divide up the premises by reference to three classes of use :-

(1) Those capable of giving rise to "exclusive use occupation and enjoyment", ie "all the flats and car parking spaces" in the words of the second recital to the deed.

(2) Common user eg the roof and the areas occupied by the various services.

(3) Common user for the purpose of passage to and from areas of exclusive user, eg "common entrances and passage ways and the driveway,-staircases and landings of the said building".

The document then sought by grant and by covenant to preserve such areas for such user, and to regulate how, by whom and at whose expense they should be repaired and managed.

104. To my mind the words with which the plans are introduced in the second recital, show that they were intended to be incorporated into the deed by reference, and to play an important part in the identification of the three defined user areas. The third floor plan only identified expressly the location of the three flats on that floor and the access areas to each. But since the layout of the remaining first, second and fourth floors appears to have been identical it was sufficient to take one floor as a sample. The ground floor plan precisely identified the twelve areas designated as car parking spaces, and by necessary implication the areas immediately surrounding and capable of use for egress and access so that they fell within the description "common entrances and driveways". More precise designation was unnecessary.

105. It seems to me that these plans served and were intended to serve an important descriptive purpose. Further it is a purpose they readily fulfilled. Any reader, and particularly any prospective buyer coming to the premises years after 1970, and having no opportunity then of ascertaining with his own eyes what had been the position on site in 1970, would have I think no difficulty in ascertaining what rights and obligations ownership of a twelve undivided share would import. I cannot agree that they are documents which can only be resorted to for a limited purpose.

106. In these circumstances the introduction of the evidence as to the physical state of the premises in 1970, does not in my view produce elucidation or clarification consistent with the deed itself as in the St Edmundsbury⁽²⁾ case. It produces total conflict. The carport, for which consistent exclusive possession is claimed it shown to he erected not in an area reserved for such user, but upon the area designated by the plan as one for common user and particularly user for the purposes of passage. There are not twelve car parking spaces but five, plus a chapel, a storeroom, a janitor's office and the clinic. Both the original clinic and the more recent replacement chapel clearly extended beyond the areas of exclusive use defined by the areas allocated to car parking spaces eleven and twelve. I agree with my Lords that one or other has to be rejected, but in my view it is not the plan.

107. It seems to me that the matter is governed not by what are usually called the exceptions to the rule considered by Lord Davey in Bank of New Zealand v Simpson⁽¹⁾, but by the rule itself which in positive terms he expressed to be:-

"Extrinsic evidence is always admissible, not to contradict or vary the contract, but to apply it to the facts which the parties had in their minds and were negotiating about".

108. I am as concerned as my Lord by the apparent unlikelihood of the defendant company knowingly and deliberately entering into a deed which required it to restore the premises to the block plan condition. I cannot and do not exclude the possibility of mistake. But such a mistake can in my view be corrected only by rectification of the deed and not by a process of construction. These words from the judgment of Stamp LJ in Grigsby v Melville⁽⁵⁾ p 86 seem to me in point :-

"The action is not an action for rectification of the conveyance to accord with the true intention of the parties to it : and given the most cogent evidence to be found in the circumstances surrounding the transaction that it did not give effect to that intention, that evidence would not, in my judgment, be admissible to contradict the plain language of the conveyance".

109. For my part therefore I would have been minded to accept Mr Chan's submissions on construction, and not to have permitted the grantor to derogate from his grant. But further development of this minority view would he pointless.

Cons, V.-P:

110. The appeal is therefore dismissed. We make an Order Nisi that the Defendant Company is to have its costs of the appeal, which Order shall become absolute within 14 days hereof unless application shall within that time have been made to vary the same.

(1) [1900] A.C. 182 (P.C.)

(2) [1975] 1 W.L.R. 468 (C.A.)

(3) (1889) 14 P.D. 64

(4) (1938) A.C. 156

(1) at page 188

(5) [1974] 1WLR 80