MAN HAK KUEN v. FIRST DEVELOP LTD AND OTHERS

DCCJ 2428/2022

[2022] HKDC 1498

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2428 OF 2022

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BETWEEN

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REASONS FOR DECISION

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1.  This case on its face concerns a dispute over an easement in the form of a right of way.

2.  The summons issued by the plaintiff dated 24 June 2022 (respectively “P” and “P’s Summons”) and the summons of the 1^st defendant dated 14 July 2022 (respectively “D1” and “D1’s Summons”) were heard by me substantively. P appeared by Mr Anson Tso of counsel, D1 by its director Mr Yeung Hon Keung Larry who conducted the hearing in English, and the 2^nd and 3^rd defendants (respectively “D2” and “D3” and together “D2D3”) were absent.

3.  At the conclusion of the hearing, I made the orders set out in paragraphs 49, 51 and 52 below with reasons to be provided. These are my reasons.

Background

4.  P and her husband have since 2001 been the registered owners and occupiers of the 2^nd Floor and Roof of a small village house erected on Sub-section 2 of Section A of Lot No 730 in Demarcation District 111 in Yuen Long (respectively “Block T” and “Lot 730A2”).

5.  Block T together with more than 30 other village houses clustered nearby (which are erected on their own respective plots of land) have been collectively known as “富興花園” (“FH Garden”), which is known by the address No 88 Sheung Che, Pat Heung, Yuen Long. FH Garden is situated next to Fan Kam Road.

6.  It can be seen from all the materials before me, including pictures taken in 1993[1] and a plan prepared in 1997 relating to the maintenance of lights in “the public areas” of FH Garden[2], that there has always been a road running within FH Garden and linking it with Fan Kam Road and that there has been erected at the entrance on that access road a metal gate (“Main Gate”), a wall next to the Main Gate on which is a black marble plate inscribed with the words “富興花園 Fu Hing Garden” and embedded into that wall are letter boxes of the various units of the various blocks in FH Garden[3] (“the Wall”). The Main Gate was demolished in 2013 in the circumstances mentioned below.

7.  Before the sub-division mentioned below, that entrance area to FH Garden was next to, or partly saddled on, and the first section of that access road inside FH Garden (about 20 meters in length) was saddled on, the northern part and along the edge of the Remaining Portion of Lot No 743 in DD No 111 (“Lot 743RP”). Lot 743RP was and is within and was and is part of FH Garden. At the south end of Lot 743RP was erected Block F of FH Garden (“Block F”).

8.  From documents produced by P and D1[4], a society registered under Societies Ordinance Cap 151 known as Owners Association of Fu Hing Garden Sheung Che (“the OA”) has already been registered by 1995 to coordinate the owners of FH Garden in the affairs concerning the management of FH Garden. There was a minute of the OA dated 22 July 1995 concerning the renovation (or construction) of the Main Gate and the Wall by the OA[5], and the related documents showed that P and D2 were closely involved in that renovation project.

9.  However, another Fu Hing Garden Mutual Aid Committee (“the Mutual Aid Committee”) has been set up and approved by the Home Affairs Department as from September 2002 and apparently has also been operating to coordinate the management of FH Garden.

10.  By an Assignment dated 29 May 1999 registered by Memorial No 867475[6] (“the Assignment”), D2D3 acquired Lot 743RP.

11.  The Schedule in the Assignment set out the property that was so assigned. Under Clause 1.3 thereof, Lot 743RP was expressly stated to be subject to the disputed right of way (“the RoW”):

“1.3 Easement and other appurtenant rights:

Subject to and with the benefit of all subsisting easement rights rights of way and other appurtenant rights, if any, including in particular but not limited to the vehicular right of way having a width of 4 meters for the owners and occupiers of Section D of Lot No 743, Sections A, B and C of Lot No 559, Lot No 738, Lot No 737, Section E of Lot No 743, The Remaining Portion of Lot No 724, Sections A and B of Lot No 742, Sections A, B and C of Lot No 736, Sections A, B, C and D of Lot No 733, Sections A and B of Lot No 731, Subsections 1 and 2 of Section C of No 731, Subsections 1, 2, 3 and 4 of Section A of Lot No 730, Sections A and B of Lot No 735, Lot No 734, Sections B, C and D of Lot No 730 all in Demarcation District No 111 and their licensees for the time being to go pass and repass the footpath along the Northern boundary of the Property by day or by night with or without vehicles or animals for the purpose of ingress to and egress from their respective properties for the term of years mentioned in Clause 2 of this Schedule”

(added emphasis highlighting Lot 730A2)

12.  It is not disputed that all the plots of land set out in Clause 1.3 having the benefit of the RoW are plots of land within FH Garden, though apparently some other plots of land within FH Garden have not been so set out.

13.  By a Deed Poll dated 29 December 2009, D2D3 divided Lot 743RP by carving out therefrom Section F. After this division, the said entrance area and the RoW continued to saddle on Lot 743RP.

14.  It can be seen from the documents produced[7] that in 2011 and 2012 there were various disputes concerning the management of Fu Hing Garden, including the disputes that the executive members of the Mutual Aid Committee had not been properly elected and thus the Mutual Aid Committee was not properly constituted.

15.  Apparently, the Main Gate was damaged by typhoon in 2012. Disputes ensued concerning the repairs of the Main Gate. The then Mutual Aid Committee (of which P was an executive member) organized the installation and did install a new Main Gate. Disputes escalated and there was an incident that the police were summoned[8]. The matter was also reported to the Buildings Department which issued a letter dated 17 April 2013 stating that the installation of the new Main Gate was without its approval or prior consent. D2D3 issued a letter before action by their solicitors dated 26 July 2013 against Pang Sau Chun (“Pang”), then Chairwoman of the Mutual Aid Committee, demanding the demolition of the new Main Gate. Not having received a response, D2D3 demolished the new Main Gate themselves and commenced a claim in Small Claims Tribunal against Pang and another for reimbursement of the demolition costs and related expenses in the sum of HK$49,700. The case was resolved by Pang and the other making the payment as claimed.

16.  However, in October 2017, D2D3 issued a notice to owners of FH Garden that they intended to install a new Main Gate[9]. By a solicitors’ letter dated 24 October 2017, P together with over 10 owners of FH Garden drew D2D3’s attention to the RoW and threatened legal action if D2D3 continued with the installation[10]. The plan to install a new Main Gate by D2D3 was aborted.

17.  In 2018, D2D3 executed the following 2 Deeds:

(a) A Deed Poll dated 8 March 2018 carving out from the then Lot No 743RP a new Section H (“Lot 743H”). As can be seen from the scaled plan annexed to this Deed Poll[11], which is annexed hereto as Annexure A, Lot 743H takes the shape of the numeral “7” and consists of 2 narrow strips of land - a narrow horizontal strip at the northern edge of the original Lot 743RP of about 5 meters in width (“the Horizontal Strip”) and another narrow longitudinal strip along the eastern edge of the original Lot 743RP of about 3 meters in width at its narrowest point (“the Longitudinal Strip”). After the division, Block F saddled on the new Lot 743RP.

(b) A Deed dated 6 June 2018 granting a right of way to the owners, occupiers and licensees of the new Lot 743RP through Lot 743H.

18.  Thus and I note, D2D3 specifically carved out the land on which the RoW and the newly granted right of way were situated to form a small and oddly shaped Lot 743H.

19.  D1 was incorporated in May 2020.

20.  It is D1’s case that by a written tenancy agreement in Chinese dated 30 June 2021 made between D2D3 and D1 (“the Tenancy Agreement”), D1 rented from D2D3 Lot 743H for a term of 21 years ending on 29 June 2042 at the annual rent of HK$120,000.

21.  I must note my observation here that the Tenancy Agreement strikes this court as a very unusual and uncommon one in that:

(a) As expressly stated in clause 5 thereof, that D2D3 have already received from D1 in full the rent for the entire 21 years, which would totalled to HK$2,520,000.

(b) As Lot 743H is small in size and oddly shaped and was taken up almost (if not) entirely by the RoW and the newly granted right of way, it is most hard to understand how Lot 743H could be physically utilized in the way we usually understand a piece of land would. Therefore, it is most hard to understand how Lot 743H could fetch such substantial rent, and even more so, how it could justify commercially the most uncommon arrangement of D1 paying upfront and in one go 21 years of rent in the sum of HK$2,520,000.

22.  A few months after the signing of the Tenancy Agreement, D1 commenced proceedings in the Lands Tribunal (LDPE 978/2021) against its purported sub-tenant of Lot 743H, one Full Young Company Limited (“Full Young”), who allegedly agreed to rent Lot 743H at HK$15,000 a month but who had allegedly failed to pay rent since 3 September 2021. That means that just slightly over 2 months’ time after the signing of the Tenancy Agreement, D1 managed to rent out Lot 743H to Full Young and who very shortly after failed to pay the agreed rent. On 25 January 2022, D1 obtained judgment and a Writ of Possession upon Full Young’s default to file Notice of Opposition.

23.  It is not known how Full Young had taken possession of Lot 743H during the currency of its short rental as by all accounts Lot 743H remained a piece of open land used for the purpose of the said 2 rights of way. Wary of the situation, P together with some owners in FH Garden applied to be joined as parties in LDPE 978/2021. Their application was refused by the Lands Tribunal on 9 June 2022.

24.  On 23 June 2022, D1 together with the bailiff attended Lot 743H to “take possession of it”. There were workers engaged by D1 who brought along metal poles, fences and a metal gate to erect them. Police were called and were on stand-by. P said that she and the others have not obstructed the execution of duty by the bailiff or obstructed D1 from taking possession of Lot 743H, but they only tried to stop the obstruction of the RoW by the erection of fences and the gate. The situation was apparently rather chaotic. P complained that she was pushed on the ground by one of the workers. She was sent to North District Hospital in an ambulance for treatment. Eventually upon the police’s persuasion, D1 ceased the intended work.

25.  The next day, ie 24 June 2022, P commenced this action to enforce the RoW and issued P’s Summons.

The applications

26.  P’s Summons applied for an interlocutory injunction in the usual terms to protect her use of the RoW.

27.  As can be seen from the conveyancing documents mentioned above, the existence of the RoW, its precise location, P’s entitlement to it and that Lot 743H is subjected to the RoW are quite clear.

28.  D1, D2 and D3 each filed a separate but prolix Defence which are almost identical in contents. They raised a whole host of matters, such as the absence of reference to the RoW in the building license, absence of a valid survey plan, various matters and arguments relating to the Lands Tribunal proceedings and such. D1 further said it was not “bound by” the Assignment, and additionally filed a Counterclaim claiming loss and damage at HK$25,000 a month and other expenses to be assessed.

29.  On 14 July 2022, D1’s Summons was filed seeking the following orders:

“1. The Interim Injunction Order made on 30th June 2022 against the 1st Defendant (“D1”) shall be discharged, varied or discontinued after 10:00 am of 22 July 2022;

2. An interim or interlocutory injunction to restrain the Plaintiff (“P”) whether by herself, occupiers, servants, or agents or any persons acting on her behalf or on her instructions or with her encouragement from howsoever and whensoever occupying or obstructing D1 or D1’s agents to enter, use, pass or repass the Property or any part thereof pending the determination of this Action until after trial or without pending the determination of this Action if interlocutory injunction is granted;

3. An injunction to restrain the Plaintiff, whether by herself, occupiers, servants, or agent or any persons acting on her behalf or on her instructions or with her encouragement from howsoever and whensoever from obstructing D1 or D1’s agent to remove the water pipes or drains from the underneath and from the surface of the Property after 14 days at Plaintiff’s costs from the Order to be made herein if the Plaintiff does not or fails to remove water pipes or drains therein;

4. A Declaration that D1 shall continue to enforce Writ of Possession and Fieri Facias combined subject to D1’s undertaking to let P and other residents of the Garden to pass and repass the Property pursuant to the terms of the deed of the right of way as described in Clause 1.3 of the Schedule of assignment dated 29th May 1999;

5. An Order that P shall provide damages as undertaken by P of HK$12,000 every month to D1 by payment into court every month or as this court thinks fit pending the determination of this Action until after trial;

6. A Declaration that D1 shall restore the metal gate at the Property whereby P, P’s agents and the residents of the Garden shall pass and repass the metal gate 24 hours day and night;

7. An order that D1 shall charge reasonable fees of the Property for the right of way of private vehicles, third party liability insurance, maintenance, repairs, cleaning, rates, and government rent or any other fees as this court thinks fit;

8. Damages to be assessed;

9. Liberty to apply;

10. Further and other relief as the Court thinks fit; and

11. Costs be to the 1st Defendant.”

30.  In support of P and D1’s respective applications and in opposition to that of the other’s, P filed 2 affirmations by herself and 2 affirmations by Pang, and D1 filed 2 affirmations by its other director Mr Leung Kin Hang (“Leung”).

P’s Summons

31.  As said, there are strong merits in P’s case over the RoW that are more than meeting the threshold of having a serious question to be tried.

32.  D1 said more than once that it would allow P (and other persons having the benefit of the RoW) to use the RoW including providing them with the key or access card if a gate is allowed to be installed, however :

(a) In its Counterclaim, in D1’s Summons and in paragraphs 25 and 26 of Leung’s affirmation filed on 14 July 2022, it was pleaded or said that P is liable to pay for reasonable maintenance, repair fees, insurance fee, and reasonable charge for the passage of vehicles. It is thus D1’s case that P could use the RoW (long term and in the interim), but upon certain payment.

(b) There is evidently a history of dispute between 2 camps, apparently with P in one and D2D3 in the other, especially over the matter of the Main Gate. The dispute over the Main Gate had more than once turned into rather heated and chaotic incidents in which police were summoned.

(c) As mentioned, the Mutual Aid Committee had in 2013 installed a new Main Gate but was forced by, among others, D2D3 to demolish it and pay for the costs of so doing; while D2D3 tried to install a new Main Gate in 2017 and was threatened to stop by, among others, P. Therefore, I am not convinced that it was or is the merits of installing the Main Gate that was or is in issue, rather, it seems to me that the dispute concerned or concerns who get to control it; or that there may be some other underlying agenda at play here.

(d) It appears to me from the above-mentioned conveyance history of Lot 743RP that it is quite possible that Lot 743H was specially carved out to enable a separate or outside party “to handle” this right of way dispute.

(e) It seems to me quite clear from considering the papers filed and lodged by D1 for these 2 applications and from hearing Mr Yeung that D1 is very aggressively poised and is not at all hesitant to raise whatever “issues” and “contentions” it sees fit to advance its position and interest.

33.  In the round and assessing it solely for the purpose of these 2 interlocutory applications, I am satisfied that there is not an insubstantial risk, or that there is a sufficient likelihood, that D1 would interfere with the exercise of P’s right to the RoW from now until trial.

34.  After some discussions between the bench and Mr Yeung in the hearing, Mr Yeung confirmed that D1 was prepared to allow P free use of the RoW from now until trial without seeking any payment in the interim.

35.  That notwithstanding, I agreed with Mr Tso that the court should impose an injunction rather than accepting an undertaking to be offered by D1. I so agreed upon the consideration of the matters set out in paragraphs 32 above and the background of a long history of dispute. Therefore, the formality and certainty of a court order by way of an injunction seems to me would better minimize the chance of further argument from now until trial. I therefore gave the injunction sought.

Should D1 be allowed to install the gate pending trial?

36.  I understood and D1 confirmed that it sought an order to be allowed to erect the gate in the interim (and not a declaration) by prayer 6 of D1’s Summons. P opposed it.

37.  D1 stated that the main reason it wanted to install the gate was for security reasons. When asked by the court, D1 did not put forth any other reason. However and evidently, D1 has not utilized Lot 743H by storing or placing, nor did it say it intended to store or place any goods or valuable on Lot 743H; nor could it really, as effectively the entire Lot 743H has to be devoted to the 2 rights of way. Moreover and as observed above, from the history of the matter, it seems to me that neither camp considered the improved security afforded by the installation of the Main Gate more important than who actually controlled the Main Gate so much so that they respectively forced the other to demolish an already installed Main Gate or to cease building one. As a result, there has been no Main Gate for about 10 years now. In the circumstances, I would not accept that “security” is the true reason.

38.  Mr Yeung repeatedly impressed upon me at the hearing that it was D1’s right in property to exercise in installing the gate and should not be otherwise fettered provided that P’s use of the RoW would not be affected. I do not find this a weighty consideration in the balance of convenience. Firstly, as above set out, the very property rights associated with Lot 743RP (now Lot 743H) are subjected to the RoW as provided by the Assignment. Secondly, as I said in paragraphs 32 and 33 above, I am satisfied that there would be a degree of risk or likelihood of interference of the RoW by D1. Allowing D1 to install the gate in the interim would mean that D1 is thereby placed in a better position to interfere, when, as I find, there is no good reason to call for the installation of the gate urgently in this interim pending trial.

39.  As I mentioned, it seems that the camps have been vying for a long time for the control of the Main Gate for their own reasons. It seems to me therefore that in the absence of cogent reasons, the most just and appropriate course to take from now until trial is to maintain the status quo pending the adjudication of the parties’ rights and disputes at trial proper.

40.  Mr Yeung asked me to restore to the “status quo” before 2012 when there was the Main Gate. I cannot accept that the situation before 2012 was the “status quo” for this purpose as at the time the Main Gate was built and maintained either by the OA or the Mutual Aid Committee when there were apparently no disputes among the owners. Rather, the Main Gate has not been installed for 10 years in the circumstances that I have mentioned. Thus, the status quo to maintain must be the situation as we find it before the recent disputes.

41.  I thus refused prayer 6 of D1’s Summons and ruled that D1 be not allowed to erect the gate until trial or further order. Though such was my ruling, in the oral order I announced was inadvertently omitted an injunction to enjoin D1 so to do. Pursuant to the slip rule (O20 r11 of the Rules of District Court) and on my own volition, I will correct my oral order by expressly enjoining the installation of the gate as indicated in paragraph 50 below.

Other prayers in D1’s Summons

42.  At the hearing, Mr Yeung confirmed that D1 would only pursue prayers 2, 4, 5 and 6 sought in D1’s Summons and not the others.

43.  I would add the comment that prayer 3 concerns D1’s intended move to remove drains and pipes that hitherto have been running on or under Lot 743H. This drains and water pipes dispute seems to be yet another dispute between certain owners in FH Garden. This dispute has never been pleaded by any party in this action, and therefore has never form part of the subject matter in this action. Yet, Leung got into it extensively in his affirmations. At the hearing, I therefore have effectively refused prayer 3.

44.  Regarding prayers 2 and 4, there was before me evidence that P only obstructed D1’s intended work on 23 June 2022, and not that P obstructed D1 or its servants from entering or staying or otherwise occupying Lot 743H. In fact, in paragraph 2 of Leung’s affirmation filed on 14 July 2022, he affirmed that “D1 was allowed to enter into the Property”. Mr Yeung submitted that the photo exhibited as “1-LKH-1” depicted a car parked on the access road which he claimed was P’s car and which he claimed has obstructed D1’s vehicle from entering Lot 743H (when the picture did not depict any other vehicle). When asked, he could not point to any part of Leung’s affirmations that said what he claimed, but he asked the court to come to a finding by simply looking at the picture. This submission need only to be stated to be rejected. There was simply no evidence showing that P has obstructed D1 or its servant from entering or using Lot 743H as opposed to P having obstructed the intended work. In any case, no such obstruction or prayer for an injunction against it was pleaded in the Counterclaim. I thus refused prayer 2.

45.  Prayer 4 goes very much hand in hand with prayer 2. It seems to me that D1’s reasoning when seeking prayer 4 was that by “executing the Writ of Possession” it meant that D1 could “exercise its property right” by erecting the gate; therefore, by obstructing the works, P was obstructing the execution of the Writ of Possession. This reasoning completely ignored the existence of the RoW to which Lot 743H is subjected. I have also explained above why I have disallowed the erection of the gate until trial or further order. I thus also refused prayer 4.

46.  I understood and confirmed with Mr Yeung that by prayer 5, D1 was seeking fortification of P’s undertaking as to damages by requiring P to pay into court each month a sum of HK$12,000 as long as the injunction granted in P’s Summons was in place.

47.  For these reasons, I refused to impose the fortification sought and dismissed prayer 5:

(a) P’s case over the RoW is strong.

(b) I am not convinced that D1 would suffer significant loss arising from the injunction. Firstly, this court finds that there is little commercial sense in this alleged tenancy of D1 having rented Lot 743H to Full Young at HK$15,000 a month. In the absence of any compelling proof other than D1’s unsubstantiated claim (which is the case now), I do not accept that the alleged income under this purported tenancy truthfully reflects D1’s potential loss. Secondly, it is for D1 to persuade the court now that Lot 743H, being such a small and odd-shaped plot, and also subject to the newly granted right of way (which D1 did not dispute), would have been able to be rented out and would have been able to fetch substantial rent. The alleged rental to Full Young not having been accepted, there is no such proof whatsoever.

(c) As I am not convinced that the contingent loss would be substantial, there is nothing to show that P, being the owner of her property, would not be able to make good the undertaking.

48.  I have dealt with prayer 6 in the preceding section.

Disposal

49.  In the premises, I allowed P’s Summons and granted the injunction in terms of the summons as modified:

(1) Until trial or further order of the Court, there be an interim injunction restraining the 1^st Defendant by itself, its servants or agents or employees or representatives or otherwise howsoever from restricting, preventing or otherwise interfering with the reasonable enjoyment of the right of way (as described in Clause 1.3 of the assignment dated 29 May 1999 of the Remaining Portion of Lot 743 in DD 111 to the 2^nd and 3^rd Defendants) by the Plaintiff herself, her servants, agents and licensees on foot and with or without vehicles and/or animals.

50.  As explained in paragraph 41 above and pursuant to the slip rule, I grant a further injunction:

(2) Until trial or further order of the Court, there be an injunction restraining the 1^st Defendant by itself, its servants or agents or employees or representatives or otherwise howsoever from erecting anywhere along the right of way described in paragraph (1) above any fence, gate or other installation that might obstruct the reasonable use of that right of way by the Plaintiff herself, her servants, agents and licensees on foot and with or without vehicles and/or animals.

51.  For the reasons expressed above, I dismissed D1’s Summons in its entirety.

52.  Have heard parties on costs at the hearing, I ordered that P’s costs of P’s Summons be the plaintiff’s costs in the cause (which I then summarily assessed at HK$100,000), and P’s costs of D1’s Summons be paid by D1 forthwith (which I then summarily assessed at HK$100,000); and in both instances, there be certificate for counsel.

53.  I did not accept Mr Yeung’s submission that the costs of D1’s Summons should be made costs in the cause as (a) there was no counterclaim regarding matters over which prayers 2 and 4 were sought, and they were in any case totally unsubstantiated, (b) the matters over which prayer 3 was sought did not even form part of this action, (c) prayer 5 and prayer 6 were rather distinct matters, (d) D1’s applications overall were very, if not totally, unmeritorious, and (e) yet, D1 was very contentious and by Leung’s affirmations brought in a lot of irrelevant matters. In the exercise of my discretion on costs I had no hesitation to order D1 to pay the costs of D1’s summons.

54.  I also ordered these costs to be summarily assessed. As P has prepared a bill covering the 2 summonses together, and having heard parties, I summarily assessed the entire bill and attributed half of the assessed sum to P’s Summons and the other half to D’s Summons. I so assessed the entire bill at HK$200,000, and hence the figures in paragraph 52 above.

55.  I thank Mr Tso and Mr Yeung for their assistance.