LEA TAI PROPERTY DEVELOPMENT LTD. v. THE INCORPORATED OWNERS OF LEAPONT INDUSTRIAL BUILDING

IN THE COURT OF APPEAL

1995, No. 137
(Civil)

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J U D G M E N T

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Godfrey, J.A.:

Introduction

1. This is an appeal from the refusal of Wong J, on 19 May 1995, to grant to the plaintiff an interlocutory injunction directed at restraining the defendant until after judgment in the action or until further order in the meantime from causing or permitting cars to be parked on a driveway serving both their properties, a driveway which the defendant has been using as a carpark.

The facts

2. The plaintiff owns a property at Shatin abutted on three sides by streets and on the fourth side by a driveway. The driveway runs between two of the streets, Wo Shui Street and Wo Shing Street. On the other side of the driveway lies a property owned by the defendant. The rights which the parties respectively enjoy over the driveway are those granted by a Deed of Mutual Grant dated 30 January 1981. It appears therefrom that the driveway is divided into three parts which have been referred to as extensions "A", "B", and "C". The plaintiff is the owner of extensions "A" and "C and the defendant is the owner of extension "B" (which lies between extensions "A" and "C"). The Deed grants a right of way to the plaintiff at all times and for all purposes over extension "B' and a similar right of way to the defendant over extensions "A" and "C". The defendant however has for a long time been in control of the driveway and has been using it as a carpark. At some time in the past, it appears that an employee of a predecessor in title of the plaintiff may have said something to encourage the defendant to take the view that no objection would be raised to such a use of the driveway; and indeed only recently has such objection been taken, the plaintiff now requiring unobstructed access to an opening in a new building which it has erected on its property.

The issues

3. The defendant claims a right, based on a proprietary estoppel, to cause or permit cars to be parked on extensions "A" and "C". It also claims a right, based on its ownership of extension "B", to cause or permit cars to be parked on extension "B", so long as that does not cause any substantial interference with the exercise by the plaintiff of its right of way over extension "B". And it says that the balance of convenience lies in allowing it, until after judgment in the action or until further order in the meantime, to continue to use the driveway as a carpark.

The judgment

4. Wong J, when he refused the plaintiff the relief for which it asked, did not give any reasons for doing so. In my judgment, the right course for a judge of first instance to take on an application made to him for an interlocutory injunction, is to give his reasons (they need be stated only briefly) for granting or refusing it. I would refer to Capital Properties v. Swycher [1976] Ch.319, in which Buckley LJ said this (at p325):-

"The judge unfortunately gave no reasons for his decision. This I consider a most unsatisfactory practice. There are some sorts of interlocutory applications, mainly of a purely procedural kind, upon which a judge exercising his discretion on some such question as to whether a matter should be expedited or adjourned or extra time should be allowed for a party to take some procedural step, or possibly whether relief by way of injunction should be granted or refused, can properly make an order without giving reasons."

5. But generally, as the Lord Justice went on to say:

"this court is entitled to the assistance of the judge of first instance by an explicit statement of his reasons for deciding as he did. "

6. In Lai Sau Lin v. World Speed Co. Ltd [1990]2 HKLR 317, at pp.321, 322 Fuad VP cited with approval similar comments made by Cons JA (as he then was) in two earlier unreported decisions, in which Cons JA had said this

"The giving of reasons is one of the fundamentals of good administration: [and he cited authority]. Even more so is it one of the fundamentals of a good system of justice. Lord Denning would have thought that went without saying. And it matters not whether that decision is final or interlocutory or in what particular court it is given. The principle holds good for all levels of adjudication. Parties are entitled to know by what the judge was influenced, particularly the party who has lost."

He went on to say:

"This does not mean that the judge must reduce his reasons to writing. In the High Court there will usually be solicitor or counsel present who will take a note of what the judge says, and should it ever afterwards be necessary to refer to it, counsel will submit that note to the judge for his agreement. Nor does it mean a lengthy speech on each and every occasion. That would be quite unnecessary in most interlocutory matters, where all that is needed is more indication of the 'why' as well as of the 'what'".

And:

"Should [the judge] in any instance not give that indication [a general indication of what was in his mind] we consider it to be the duty of counsel, and in particular if there is a possibility that the matter will be taken further, to invite the judge to do so."

7. In the absence of reasons here it seems to me we cannot sensibly assess whether the judge exercised his discretion rightly or wrongly. However, we have exactly the same materials before us as were before him. We can therefore now ourselves exercise the relevant discretion; but that is unsatisfactory. This Court is not a court of first instance; it is a court of review. It ought to have the benefit of the judge's reasons before it embarks on the exercise of considering whether or not he had properly exercised his discretion. As it is, we really have to consider the matter de novo.

The appeal

8. There is no dispute between the parties as to the facts. Nor is there any dispute between the parties as to the law. As I understood the argument, it is common ground between them that, in the ordinary case, an owner of property who complains of a trespass is entitled almost as a matter of course to an injunction to restrain the continuance of the trespass. And that is correct: see Patel v. W.H. Smith [1987]1 WLR 853. The situation is much the same as it is in the case when one party to a contract seeks to enforce an express negative stipulation.

9. In that context, I would refer to The Incorporated Owners of South Seas Centre, Mody Road v. Great Treasure Development Ltd [1994]2 HKLR 196, where this court said:-

"We would reformulate the principle thus: Where a defendant is proposing to act in breach of an express negative stipulation binding upon him he will normally be enjoined from doing so, and, save in exceptional cases, damages will not be regarded as an adequate remedy; but the defendant may nonetheless be able to establish special circumstances of such a nature that the hardship that the making of the order would cause him would so far outweigh the inconvenience to the plaintiff through denying the plaintiff specific relief that the court considers that its intervention would be unjust. In addition, general discretionary considerations, such as unfairness, acquiescence or delay, may make the grant of an interlocutory injunction inappropriate."

10. In my judgment, the same principle applies where the case is one of trespass. However, where the case is one of interference with an easement, the position is somewhat different. There, the owner of the dominant tenement has no absolute right to use each and every portion of the right of way. He is entitled to complain only of substantial interference with that right by the owner of the servient tenement. The owner of the servient tenement is the owner of the land and is accordingly entitled to use it for whatever purposes he likes, so long as he does not substantially interfere with the use of the way by the owner of the dominant tenement. In the end, then the only real question on the appeal is whether, overall, the balance of convenience here requires the denial of relief to the plaintiff.

Conclusion

11. On the facts of this case, in relation to the extensions "A" and "C" owned by the plaintiff, there is to my mind no doubt but that an injunction should go. The court cannot countenance the continuance of the trespass, now that the plaintiff is unwilling any longer to sanction it. The case for the defendant based on a proprietary estoppel is so thin as to be almost invisible. The establishment of a proprietary estoppel at the trial will need cogent evidence demonstrating (1) a clear and unequivocal representation made by the plaintiff to the defendant that the defendant would be allowed permanently to use the premises as a carpark; and (2) that the defendant to its own detriment has spent its own money upon the conversion of the driveway into a carpark. It may be possible for the defendant to establish such a case at the trial. It has certainly failed to come anywhere near establishing it, even as an arguable case, on the evidence before us upon this interlocutory application.

12. It follows that an interlocutory injunction in absolute terms must go against the defendant in relation to extensions "A" and "C" upon which it has been trespassing, and in qualified terms in relation to extension "B" which it owns but which it can use only so long as its user does not substantially interfere with the plaintiff's right of way.

13. Accordingly, the plaintiff now seeks an order in the following terms: an order that the defendant (the respondent) whether by its agent or servants or any of them or otherwise be restrained until after judgment in this action or until further order in the meantime from doing the following acts or any of them, that is to say: (1) using, permitting or causing to be used as a carpark the portion of the driveway being part of the remaining portion of Shatin Town Lot No. 17 and more particularly delineated and coloured yellow on the plan (to be attached to the order) marked "Appendix A"; (2) using, permitting or causing to be used as a carpark the portion of the driveway being part of section "A" of Shatin Town Lot No. 17 and more particularly delineated and coloured pink on the said plan so as substantially to interfere with the appellant's right of way granted under the Deed of Mutual Grant dated 30 January 1981.

14. I would hold that the balance of convenience comes down in favour of the plaintiff. I would therefore allow the appeal and grant the interlocutory injunctions for which the plaintiff now asks.

Liu, J.A.:

15. I agree entirely with the way in which the interlocutory application is proposed to be disposed of by my Lord Godfrey JA for the reasons he gives. I only wish to add that as between the use as a car park and the use as an exit in the circumstances of this case, the balance of convenience lies clearly in favour of the plaintiff in this interim application.

Litton, V.-P.:

16. Counsel for the defendant, Mr Edward Chan QC, has submitted to us as follows: "The judge's decision is not such that no reasonable judge regardful of his duty to act judicially could have reached and thus the appeal should be dismissed." I cannot agree. It is not the function of this court to second-guess the judge's reasons. His failure to give reasons means in effect that this court must evaluate the material before it afresh and come to a decision on that material.

17. I agree for the reasons expressed by Godfrey JA that this appeal must be allowed.