FANTASTIC STATE LTD v. TIEN’S ORGANIC FARM AND OTHERS

CACV 77/2019

[2019] HKCA 687

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 77 OF 2019

(ON APPEAL FROM HCA 99/2018)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  On 6 June 2018, Deputy High Court Judge Richard Khaw SC (“Judge”) continued an interlocutory injunction previously granted by L Chan J on 27 March 2018 and refused to discharged the order of 27 March 2018 (which was obtained by the Defendants on an ex parte application) on the ground of material non-disclosure. The injunction was to restrain the Plaintiff from interfering with the Defendants’ use (by vehicle or otherwise) of an access road (“the Access Road”) connecting Fung Yuen Road and Lot 813. The Defendants occupied Lot 813 for their business of car-parking and hobby farming.

2.  The Access Road was constructed by the Plaintiff on its own land at Section A of Tai Po Town Lot 183.  The evidence shows that the Access Road as built by the Plaintiff did not connect with Lot 813.  Since 2008, the Plaintiff had erected fence at the boundary between Lot 813 and Lot 183A.  The Plaintiff began construction of the Access Road in 2012 (and completed its construction in about 2014 or 2015) as emergency vehicular access to serve its own land.  Along the Access Road at the proximity of Lot 813, the Plaintiff had grown trees and plants with landscaping features on the Plaintiff’s side of the fence which did not form part of the Access Road. 

3.  Notwithstanding the issue of the occupation permit for Lot 183A on 31 December 2013 and the Certificate of Compliance on 16 December 2015, the Plaintiff had not disposed of any interest in Lot 183A.

4.  Sometime in 2017, the Plaintiff discovered that there were unauthorized works on the Plaintiff’s land with the removal of the fence at the boundary and the plants and landscaping features and the construction of a patch of new road connecting the Access Road with Lot 813.  Report was made on behalf of the Plaintiff to the police on 1 December 2017.

5.  On 21 December 2018, the Plaintiff’s solicitors wrote letters to the Defendants demanding them to desist from using the Access Road.  On 28 December 2018, the then solicitors of the Defendants replied with a general denial of knowledge on the unauthorized works. 

6.  On 15 January 2018, the Plaintiff issued the writ in this action claiming against the Defendants for trespass and seeking injunctive relief and damages.  The Statement of Claim was issued and served on the Defendants’ solicitors on 26 March 2018.

7.  At the same time, the Plaintiff took steps to erect barrier at the entrance of the Access Road with a view to prevent the Defendants from using the Access Road.  The Defendant through their solicitors wrote to the Plaintiff’s solicitors on 27 February 2018 requesting to discuss with the Plaintiff on the use of the Access Road and seeking to cease the construction of the barrier in the meantime. 

8.  That request was rejected by the solicitors for the Plaintiff on 7 March 2018. 

9.  On 22 March 2018, the Plaintiff blocked the entrance of the Access Road by installing a chain between two posts installed there.  A security guard was also posted there to prevent vehicular use of the Access Road. 

10.  On 27 March 2018, the Defendants applied ex parte for an interlocutory injunction.  Short notice was given to the solicitors for the Plaintiff.  A solicitor attended the hearing but she was unable to make any effective opposition at the hearing before L Chan J.  

11.  As mentioned, that injunction was continued by the Judge on 6 June 2018.  This was so notwithstanding he found that there was material non-disclosure on the part of the Defendants in respect of the circumstances as to the provision of vehicular access by the Access Road when the ex parte application was made, see [20] to [24] of the judgment of 6 June 2018.  The Judge regarded such non-disclosure as being relevant to the assessment of the Defendants’ claim of easement by prescription. 

12.  On the other hand, the Judge did not find material non-disclosure in respect of the Defendants’ claim of right of access based on Special Condition 30(a) of the Conditions of Grant for Lot 183 notwithstanding the omission to refer to certain parts of that Special Condition at the ex parte hearing.

13.  The Plaintiff sought leave to appeal against that decision. 

14.  Subsequently, the Judge refused to grant leave to appeal on 2 November 2018.

15.  The Plaintiff renewed the application for leave to appeal before the Court of Appeal.  On 11 February 2019, Poon JA granted leave to appeal in CAMP 168/2018.

16.  For the purpose of this appeal, we shall address the following issues in this judgment:

(a)   Whether there was any material non-disclosure by the Defendants in respect of Special Condition 30(a);

(b)   Whether the Judge adopted the correct approach in assessing if the injunction should be continued in light of the finding of material non-disclosure;

(c)   Whether there is any serious issue to be tried in the Defendants’ claim of right of way.

17.  Mr Yu SC (appearing with Mr Lam for the Plaintiff) also raised issues on the Defendants’ lack of justification to proceed on ex parte basis, balance of convenience and fortification.  As it shall become clear, we do not find it necessary to address these issues for the disposal of this appeal. 

Material non-disclosure in respect of Special Condition 30(a)

18.  Special Condition 30(a) of New Grant No 20412 in respect of Tai Po Town Lot No 183 reads as follows:

“ The Grantee shall at his own expense and to the satisfaction of the Director provide, construct and maintain within the lot unobstructed roads, footpaths, stairs and other forms of access (hereinafter referred to as “the said access roads and footpaths”) leading to adjacent private land and burial grounds.  The standards, positions, alignments and levels of the said access roads and footpaths shall be subject to the approval in writing of the Director. The existing roads, footpaths, and stairs leading to the adjacent private land and burial grounds shall not be interrupted or interfered with until the said access roads and footpaths are completed to the satisfaction of the Director and the Grantee shall allow members of the public at all times and for all lawful purposes to pass or repass on foot or by vehicle along, to, from, by, through, over, up and down the said access roads and footpaths free of costs for the purpose of access to and from the adjacent private land and burial grounds”.  (emphasis added)

19.  The Defendants relied on this condition in advancing their case of right of way based on express grant.  However, when they applied for the ex parte injunction before L Chan J, counsel for the Defendants chose to omit the underlined words in the quotation of this Condition.  In the skeleton submissions placed before the court at the ex parte hearing, counsel said as follows at paras 7 to 8, and 28 to 30:

“ 7. In August 2007, Cheung Kong surrendered approximately 310 lots in the locale and obtained a new grant. SA 183 was a plot carved out of the land grant under New Grant No. 20412 and is held under P’s name. Special Condition 30(a) of the Conditions of Exchange for New Grant No. 20412 provides the following:-

‘ The Grantee shall at his own expense and to the satisfaction of the Director provide, construct and maintain within the lot unobstructed roads, footpaths, stairs and other forms of access … leading to adjacent private land and burial grounds … The existing roads, footpaths and stairs leading to the adjacent private land and burial grounds shall not be interrupted or interfered with until the said access roads and footpaths are completed to the satisfaction of the Director and the Grantee shall allow members of the public at all times and for all lawful purposes to pass ore repass on foot or by vehicle along, to, from, by, through, over, up and down the said access roads and footpaths free of cost for the purpose of access to and from the adjacent private land and burial grounds.’ (emphasis added)

8. In 2015, P and/or Cheung Kong commenced construction works at the Access Road as part of a project known as Le Jardin. The Access Road which was previously made up of various elongated low mounds were flattened and a paved road was constructed over them. The Access Road starts from Fung Yuen Road and runs east for about 120 metres until it reaches Lot 813 and branches into two perpendicular paths. During the construction of the Access Road, P had installed several moveable barricades at its entrance and had stationed management guard there. There was however never any attempt to stop Ds or other users of Lot 813 from using the Access Road. The management guard left and the barricades disappeared after construction of Le Jardin was completed in or around December 2015.

…

28. Ds claim an easement over the Access Road by way of the express/implied reservation under Special Condition 30(a) of the Conditions of Exchange; alternatively by way of prescription.

29. The Government as the reversioner of all ‘adjacent private land’ has, by Special Condition 30(a), expressly reserved an easement in favour of such land. Lot 813 is not only a private land adjacent to that granted under the Condition of Exchange but surrounded in three directions and thereby landlocked. The language of the Special Condition leaves little room for doubt as to scope and extent of the easement provided thereunder. Lot 813 is entitled to the benefit of the easement reserved.

30. It is not necessary for Ds to rely on any implied reservation but given the fact that Lot 813 is in effect completely surrounded by SA 183, an easement would in any event arise in favour of Lot 813 as the dominant tenement by necessity.”

20.  The Judge held that there was no material non-disclosure in this respect because in the absence of transcript he was not sure whether counsel had indeed drawn attention to the omitted part during the oral hearing.  He also held that in any event the omitted part would not have affected the arguability of the claim of right of way based on Condition 30(a). 

21.  We have read the transcript of the ex parte hearing.  Counsel for the Defendants did not at any stage during the hearing bring to the court’s attention the omitted part in Condition 30(a).  In this connection, we are of the view that the Judge’s approach in giving the benefit of doubt to the Defendants in the absence of the transcript was erroneous.  In principle, once a prima facie case of omission is made out by reference to the written materials placed before the court at the ex parte hearing, it is for the party applying for ex parte relief to demonstrate that such omission had been rectified by oral submissions advanced at the hearing.  Thus, if the Defendants wish to rely on the oral submissions at the hearing, they should have produced the transcript to the Judge.

22.  Further, we respectfully differ from the Judge in his assessment on the materiality of the omission.  Firstly, as the Judge himself acknowledged at [16] of the judgment, even if the ex parte judge would still have made the order had he been informed of the non-disclosed matter, so long as it is something which should have been taken into account in the weighing process, the failure to disclose is material. 

23.  Secondly, the omission put a very different perspective on the scope of duty on the part of the Plaintiff under Condition 30(a).  The condition can be split into four inter-related parts:

(a)   The first part provides for the duty on the part of the Grantee to provide, construct and maintain access roads and foot paths leading to adjacent private land and burial grounds[1];

(b)   The second part, which is the omitted part, further identified and prescribed that the standards, positions, alignments and levels of the said access roads and footpaths shall be approved by the Director;

(c)   The third part provides for the non-interference with existing roads, footpaths, and stairs leading to the adjacent private land and burial grounds pending the construction of the access roads and foot paths;

(d)   The fourth part requires the Grantee to allow members of the public at all times and for all lawful purposes to pass or repass on foot or by vehicle along, to, from, by, through, over, up and down the said access roads and footpaths free of costs for the purpose of access to and from the adjacent private land and burial grounds.

24.  Without the second part, the condition can be construed as imposing a general requirement to provide access roads and foot paths on the Plaintiff’s land leading to adjacent private land and burial ground.  However, with the second part and in light of the definition for the said access roads and footpaths which is applicable in the whole Condition 30(a), that apparently general obligation is qualified and the access roads and foot paths would be identified in the approval by the Director.  The obligation under the fourth part would have to be construed accordingly. 

25.  The approved plans produced by the Plaintiff show that the Access Road as constructed by the Plaintiff is the access road under Condition 30(a) and it does not link to Lot 813.

26.  Thus, the inclusion of the second part could give rise to a wholly different construction of the obligations of the Plaintiff under Condition 30(a).  In view of the second part, the Judge’s observation that the approved plans for the access roads and foot paths was irrelevant is plainly wrong.

27.  In our judgment, the omission is material and the Judge should have held that there had been material non-disclosure on the part of the Defendants in respect of Condition 30(a) as well.  If counsel appearing at the ex parte hearing had alluded to the second part, he would also have to explain to the court how, notwithstanding the second part and the fact that the Access Road as approved did not connect to Lot 813, the Defendants could have claimed that there was a grant of right to use the Access Road for access to Lot 813 based on Condition 30(a).  By omitting the reference to the second part, counsel had simply avoided that difficulty.

28.  As far as we can see from the materials before us, the Defendants had not offered any explanation for such non-disclosure other than saying that the second part was irrelevant.  Also, up to now, there is nothing in the defence case or written materials to provide a proper basis to bridge the gap in the argument based on Condition 30(a) as stated in the preceding paragraph if the second part is taken into account. 

29.  The closest argument in that regard was the one put forward by Mr Kam (when he was still representing the Defendants[2]) in opposing the application for leave to appeal by the Plaintiff before the Judge.  At paragraph 9 of the skeleton submissions of 17 July 2018, Mr Kam said that there is no discernible reason why the Director would deny access to Lot 813 as to do so would render Lot 813 landlocked and without access. 

30.  However, the landlocked point was not taken on board by the Judge as he made no finding on the same in the judgments of 6 June 2018 and 2 November 2018.  In the judgment of 6 June 2018, the Judge analysed the defence case on right of way based on express grant under Condition 30(a) and prescription on account of past use by Granny Wu[3].  

31.  We will come back to the landlocked point later.  However, we cannot accept the argument of Mr Kam as providing the answer as far as the materiality of the non-disclosure of part 2 is concerned.    

32.  The effect of this non-disclosure was compounded by the material non-disclosure on the circumstances as to the provision of vehicular access by the Access Road.  In the Affirmation of Wong Chi Pan of 27 March 2018, he gave the misleading picture that the Access Road as constructed by the Plaintiff actually connected with Lot 813.  He also gave the impression that the previous occupier of Lot 813, Granny Wu had been using the Access Road for delivery of agricultural materials to and produce from Lot 813.  He mentioned nothing about the unauthorized works to connect the Access Road with Lot 813 which took place in 2017 after the Defendants took over occupation of the lot from Granny Wu.

33.  At para 32 of the skeleton submissions used for the ex parte application, counsel for the Defendants said:

“ 32. Lot 813 has been in occupation by Granny Wu and subsequently Ds since as early as around 1980. With the Access Road being the only means of access of Lot 813, there is little doubt that it has been used as such since then. A right of way must therefore have been acquired by prescription since around 2000. Ds as occupier of Lot 813 as the dominant tenant claim this easement over SA 183 as the servient tenement.”

34.  Though there was a reference to the Plaintiff’s claim of trespass in the submissions, counsel did not at any stage of the ex parte hearing clarify that the Access Road did not connect to Lot 813 but for the unauthorized works demolishing the landscape features and fence erected by the Plaintiff.

The discretion to discharge the injunction

35.  We accept that it is a matter of discretion for the court to consider if an ex parte injunction should be discharged upon a finding of material non-disclosure.  As with other exercise of discretion, this Court should not interfere with the decision of the Judge unless we are satisfied that he had misdirected himself on the principles or the evidence in the exercise of his discretion, or he had wrongly taken into account irrelevant matters or failed to take into account relevant matters, or that the exercise of discretion was plainly wrong.

36.  The Judge addressed the consequence of material non-disclosure in the context of this case at [33] to [35] of the judgment:

“ 33.  It is not every omission that will cause an injunction to be automatically discharged.  The court has a discretion, notwithstanding proof of material non-disclosure, to continue the order or to make a new order on terms.  Ultimately, the question boils down to whether the merits of the case and justice warrant the injunction (see Velatel Global Communications Inc & Another v Chinacomm Ltd & Ors, HCA 1978/2011, unrep, 26 October 2012, §§99 & 104, per Deputy High Court Judge Au-Yeung (as she then was)).

34.  In the present case, I do not think there is any sufficient basis for me to come to any view that the omission was intentional or deliberate.  I note that the Defendants’ Skeleton Submissions for the ex parte application did not shy away from mentioning the Plaintiff’s allegations as contained in the Statement of Claim.   In particular, the Defendants highlighted the Plaintiff’s complaints of trespass and also of the Defendants’ unauthorised construction works which allegedly created a vehicular entrance to Lot 813.  I tend to think that the non-disclosure was caused by the Defendants’ failure to conduct adequate inquiries before they took out the ex parte application.

35.  Further, in the above discussion, I have provided my reasons for my rulings on serious issues to be tried and also balance of convenience.  In the circumstances, the Injunction Order ought to have been granted in any event even if all relevant matters had been brought to the Court’s attention.”

37.  The Court of Appeal examined the proper approach in the exercise of discretion in light of material non-disclosure in Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642 at [56] to [58].  Kwan JA (as she then was) cited with approval the summary of principles by Deputy Judge Alan Boyle QC in Arena Corp Ltd v Schroeder [2003] EWHC 1089 (Ch):

“ (1) If the court finds that there have been breaches of the duty of full and fair disclosure on the ex parte application, the general rule is that it should discharge the order obtained in breach and refuse to renew the order until trial.

(2) Notwithstanding that general rule, the court has jurisdiction to continue or re-grant the order.

(3) That jurisdiction should be exercised sparingly, and should take account of the need to protect the administration of justice and uphold the public interest in requiring full and fair disclosure.

(4) The court should assess the degree and extent of the culpability with regard to non-disclosure. It is relevant that the breach was innocent, but there is no general rule that an innocent breach will not attract the sanction of discharge of the order. Equally, there is no general rule that a deliberate breach will attract that sanction.

(5) The court should assess the importance and significance to the outcome of the application for an injunction of the matters which were not disclosed to the court. In making this assessment, the fact that the judge might have made the order anyway is of little if any importance.

(6) The court can weigh the merits of the plaintiff’s claim, but should not conduct a simple balancing exercise in which the strength of the plaintiff’s case is allowed to undermine the policy objective of the principle.

(7) The application of the principle should not be carried to extreme lengths or be allowed to become the instrument of injustice.

(8) The jurisdiction is penal in nature and the court should therefore have regard to the proportionality between the punishment and the offence.

(9) There are no hard and fast rules as to whether the discretion to continue or re-grant the order should be exercised, and the court should take into account all relevant circumstances.”

38.  At [57], Kwan JA alluded to the tension between the need to protect the administration of justice and uphold the requirement of full and frank disclosure on the one hand and the general duty to do justice. Her Ladyship said the court would have regard to the principle of proportionality in the exercise of its penal jurisdiction to impose sanction for non-disclosure.  She further said at [58] that the court must look both backwards and forwards and the overriding question is what is in the interests of justice in the particular circumstances of the case.

39.  We respectfully agree with the approach in Excel Courage Holdings, supra, and it must be taken as a more accurate statement of the principle than the stricter view expressed previously in the earlier case of Cheung Kam Wah v Cheung Hon Wah CACV 53/2004, 11 January 2005.

40.  Further, as held by Recorder Ma SC (as the Chief Justice then was) in Yau Chiu Wah v Gold Chief Investment Ltd HCA 807/2001, 15 May 2001, it is relevant to consider if the non-disclosure was innocent or deliberate and the excuse for such non-disclosure.  Normally, a court would expect affidavit evidence to account for the non-disclosure.

41.  In the present case, the Judge considered that the non-disclosure regarding the circumstances leading to the provision of vehicular access by the Access Road was not intentional.  In view of our conclusion on the materiality of the non-disclosure regarding Condition 30(a), we need to re-examine the nature of the non-disclosure since, as explained at [32] above, the two non-disclosures are related and the effect of one was compounded by the other. 

42.  In our judgment, examining the two non-disclosures together, in the absence of any explanation for the same, it is difficult to regard the non-disclosure as non-intentional.  It should have been quite clear to the Defendants that Access Road did not connect to Lot 813 prior to the unauthorized works in 2017 and the Plaintiff had protested against such works and commenced the present action to pursue against the Defendants for the works.  There was also no reason why counsel’s quotation of Condition 30(a) should only omit the second part which coupled with the other non-disclosure is rather damaging to the defence case on easement by express grant.  

43.  We must also disagree with the Judge’s approach at [33] of the judgment where he took the view that the ultimate question was whether the merits of the case and justice warrants the injunction to be granted.  Such approach paid insufficient regard to the competing consideration in upholding the duty of full and frank disclosure as discussed by Kwan JA in Excel Courage Holdings, supra. 

44.  In the circumstances, the Judge erred in principle and misunderstood the effect of the evidence in the exercise of discretion.  We have to consider afresh if the ex parte injunction should be discharged or continued.

Any serious issue to be tried in the case as put before the Judge?

45.  As mentioned, the Defendants only put forward two bases for having a right of way over the Access Road when his counsel sought a continuation of the injunction before the Judge.

46.  We have already alluded to the difficulty as regard the contention based on Condition 30(a).  Regarding the landlocked argument, it was not actually developed in the evidence and in particular there was no evidence as to how Lot 813 could have said to have vehicular access prior to the construction of the Access Road.  In the absence of such evidence, the Defendants could not have made out a case for construction of Condition 30(a) based on the prevailing situation at the time of New Grant No 20412 (9 August 2007).

47.  In this connection, we cannot agree with the Judge’s view at [19(2)] of the judgment that the parties were entitled to explore further the surrounding circumstances at the time of the execution of the New Grant.  It is correct that parties could adduce further evidence on such surrounding circumstances when the matter comes on for trial.  However, it does not follow that if a party is to seek an interlocutory injunction he does not even need to produce at least some evidence on the prevailing circumstances at the time of the New Grant in order to put forward a case with some serious issue to be tried.

48.  In the present context, the issue is vehicular access rather than access.  Condition 30(a) addressed both kinds of access.  As far as vehicular access is concerned, the approved access road, viz the Access Road, does not provide vehicular access all the way up to Lot 813.

49.  On the other hand, as far as non-vehicular access is concerned, there is nothing to suggest that the Plaintiff did anything to prevent the Defendants from having access to Lot 813.  There is actually no proper evidence on vehicular access to Lot 813 prior to the construction of the Access Road.  If the prevailing circumstances at the time of the New Grant was that there was no vehicular access through the Plaintiff’s land to Lot 813, Condition 30(a) cannot be construed as creating such a right even if such pre-existing circumstances were taken into account. 

50.  Here, as the Judge also acknowledged at [22], the evidence of vehicular access prior to the construction of the Access Road was scant.  In the end, all that the Judge could pinpoint was the surmise by counsel that vehicles had been used for transportation in relation of sale of vegetables by Granny Wu: see [25(2)].

51.  We do not think such a supposition from counsel could be regarded as evidence.  In this connection, there was actually no evidence from Granny Wu or other credible witness concerning the alleged transportation by vehicles.

52.  Further, Mr Yu submitted that as the Defendants were not parties to the Grant and the government did not enter into the same for them, there was no privity of contract or privity of estate which enables them to enforce Condition 30(a) against the Plaintiff. Counsel also said the Judge erred in holding that Section 26 of the Conveyancing and Property Ordinance could be relied upon to overcome such difficulty.

53.  We agree with Mr Yu that Section 26 alone cannot be the answer, see Grey & Grey, Elements of Land Law 5^th Edn para 3.3.17; Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025 and Incorporated Owners of Mirador Mansion v Tecowin Development Ltd [1999] 4 HKC 113. On the other hand, it may be arguable that Condition 30(a) could be construed as a reservation of an easement and as such enforceable by the owner or occupier of a specified dominant tenement, see Wiles v Banks (1985) 50 P & CR 80[4], Grey & Grey, Elements of Land Law 5^th Edn para 5.2.83. But this line of argument was not canvassed before the Judge and in the absence of submissions, we would not decide the appeal based on lack of standing on the part of the Defendants to rely on Condition 30(a).     

54.  On the evidence available at the time of the ex parte injunction and the inter partes hearing, we are of the view that the Judge erred in holding that there is a serious issue to be tried on account of express grant based on Condition 30(a).

55.  Thus, without evidence of pre-existing vehicular access prior to the construction of the Access Road, the landlocked point could not take the Defendants’ case further if non-vehicular access to Lot 813 remains available notwithstanding the blocking of vehicular access by the Plaintiff. 

56.  As regard the alternative case of the Defendants based on easement by prescription, the Judge held that there was a serious issue to be tried for the reasons he gave at [25] of the judgment:

“ (1) Through their counsel, both the Plaintiff and the Defendants have tried to provide their different observations on the aerial photographs which tend to support their respective positions. However, in the absence of any assistance from experts, I cannot come to any conclusion on whether any vehicular access existed before 2015 purely on the basis of the visual inspections of such photographs.

(2) The Defendants have adduced evidence that Granny Wu used to grow vegetables on Lot 813 not only for her personal consumption but also for sale (which has not been disputed by the Plaintiff). Whilst Mr Kam accepted there was little evidence on the actual circumstances in which the alleged vehicular access was created, he submitted that it was more likely than not that vehicles had been used for the transportation in relation to the sale of the vegetables. I cannot exclude such a likelihood for the time being.

(3) The Defendants accept that the extent of the right of way is measured by the extent of the user in the context where the right is allegedly acquired by prescription but they deny the Plaintiff’s allegation that the user did not include vehicular access and the purpose of access should be limited to private agricultural use.  The question as to whether the Defendants’ current use of Lot 813 represents a radical change in the character and nature of the use of the land is one of degree and extent, which cannot be fully determined until trial.”

57.  With respect, the Judge failed to consider properly the evidential lacuna in the Defendants’ case on vehicular access prior to the construction of the Access Road.  The bare assertion by the Defendants that Granny Wu had enjoyed such vehicular access without any real supporting evidence could not make out a case of serious issue to be tried.  Further, insofar as the Judge relied on para 20 of the 2^nd Defendant’s affirmation, he failed to bear in mind that it was accepted by the defence that it was referring to the state of affairs after the construction of the Access Road.

58.  As submitted by Mr Yu, in order to establish a right of way by prescription the Defendants had to demonstrate continuous use for 20 years and the extent of the right so acquired by reference to extent of the user during that period: Gale on Easements 20^th Edn paragraph 9-03; Lynn Shellfish Ltd v Loose [2017] AC 599 at [45] and [46], in particular at [45] where Lord Neuberger PSC and Lord Carnwath JSC said:

“ … in other words, in order to identify the nature and extent of the right obtained by prescription, one has to examine the actual use as of right upon which it is said to be based. The correct question is therefore not what the notional grant would have been likely to be, let alone what would have been the intention of the notional grantor; it is what is the extent of the user as of right for the requisite period. …”

59.  In our judgment, due to the evidential lacuna in the actual user by way of vehicular access prior to the construction of the Access Road the Defendants had not met the threshold of having a serious issue to be tried on easement by prescription.

60.  For these reasons, we respectfully disagree with the Judge that on the material before the court at the ex parte and inter partes hearings there are serious issues to be tried on the two bases for easement as contended by the Defendants.

The injunction should not have been continued

61.  In light of the above analysis, we are of the view that the material non-disclosures were not made innocently and it had affected the outcome in the ex parte application.  Further, even on the materials before the Judge, the Defendants had not made out a case for serious issue to be tried in respect of easement in terms of vehicular access right.

62.  We note that in the Defence and Counterclaim filed on behalf of the Defendants on 15 June 2018, the Defendants pleaded their case of vehicular access prior to the construction of the Access Road in greater details at para 6(a) to (f). This was supplemented by the Further and Better Particulars served by the 3^rd Defendant on 10 April 2019. However, apart from the fact that the Defence and Counterclaim was not before the court at the ex parte and inter partes hearing, we have seen no evidence to support the pleas of pre-2012 vehicular access.

63.  The Defendants said they tried to settle the matter with the Plaintiff. The 2^nd Defendant also said that he could not afford the litigation and if vehicular access is not allowed he would have to close the operation of the 1^st Defendant at Lot 813. The 3^rd Defendant said they had made enquiries before paving the part of the road leading to Lot 813 and they did so to facilitate the access to their farm by those engaged in hobby farming. She said the Defendants did not realize that that part of land belonged to the Plaintiff. After learning that the land belonged to the Plaintiff, they had already demolished the concreting there. She however denied they had removed the fencing and vegetation in the course of paving the road.

64.  In our judgment, these submissions could not justify the material non-disclosure or the continuation of the injunction. The law does not allow a person to create an easement by unilaterally constructing over his neighbour’s land without consent a means of access to his land.   

65.  In the circumstances, exercising the discretion afresh, bearing in mind the approach discussed in Excel Courage Holdings, supra, we are of the view that the injunction should be discharged.

66.  Thus, we would allow the appeal and discharge the injunction granted by L Chan J and continued by the Judge.

67.  In light of the above decision, there is no need for us to address the other issues raised by Mr Yu.

68.  We would also make a costs order nisi that the Defendants shall pay the Plaintiff’s costs of the appeal and the costs of the injunction proceedings at the court below in any event.