SINO UNION DEVELOPMENT LTD AND ANOTHER v. THE INCORPORATED OWNERS OF CHIP LEE BUILDING

HCA 1415/2023

[2025] HKCFI 1775

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1415 OF 2023

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JUDGMENT

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I.  INTRODUCTION

1.  The present action concerns the Plaintiffs’ right of access to Chip Lee Building, No. 180 Sai Yeung Choi Street South, Kowloon, Hong Kong (the “Building”) through the Main Entrance (as defined below) under the Deed of Mutual Covenant (the “DMC”) governing the Building. Besides, at the Pre-Trial Review, DHCJ MK Liu directed the parties to make submissions at trial on a jurisdictional issue, namely, whether the District Court has jurisdiction over the Plaintiffs’ claim, an issue which I shall deal with in the latter part of this Judgment.

II.  BACKGROUND NOT IN DISPUTE

2.  The background set out in this Part is not in dispute and is largely taken from the Statement of Agreed Facts filed on 3 April 2025.

A.  Parties

3.  The 1^st Plaintiff has since 31 December 2021 been the registered owner of all the units on 1/F of the Building. It operates an upper floor shopping arcade there by subdividing the arcade into various small shops and licensing/letting or seeking to license/let the spaces out to small businesses.

4.  The 2^nd Plaintiff has since 30 December 2022 been the registered owner of all the units on 2/F of the Building. It subdivides and leases out or seeks to lease out the units there to various small businesses.

5.  The Defendant is the incorporated owners of the Building. It was incorporated in 1977.

B.  The Building

6.  On 7 October 1966, the occupation permit for the Building was issued. The Ground Floor, 1/F and 2/F are approved for non-domestic use, and 3/F to 11/F are approved for domestic use.

7.  On 14 December 1966:-

(1)  the DMC was executed; and

(2)  15 first assignments (the “14 December 1966 First Assignments”) were executed in respect of 15 units of the Building.

8.  By the time the first assignment of 1/F and 2/F was executed on 8 October 1971, some other units of the Building had already been sold.

C.  Main Entrance and Metal Gate

9.  The Building has only two entrances. One is the main entrance opening onto Sai Yeung Choi Street on G/F (“Main Entrance”) and the other is a fire escape entrance opening onto a scavenger lane.

10.  The Main Entrance leads to a corridor and staircase to a lift lobby on UG/F. The lifts access all floors from 1/F to 11/F (“Upper Floors”). The lift lobby on UG/F is connected to the Upper Floors through a staircase at another end. The Main Entrance has been used in common for ingress and egress purposes by all occupiers of the Upper Floors.

11.  While the fire escape entrance has a fire escape door that is locked from the inside, the Main Entrance has a metal gate (the “Metal Gate”) which is closed and locked at all times. The approved building plan of the Building dated 22 November 1965 (the “Approved Plan”) does not show this Metal Gate. The time when the Metal Gate was installed is unknown. It is agreed that it is sometime after the approval of the building plan.

12.  The Metal Gate can be unlocked in one of the following ways:-

(1)  by someone physically at the Metal Gate and inside the Building;

(2)  by the security guard stationed at the lift lobby on UG/F for visitors who press a button at the control panel (“Control Panel”) next to the Metal Gate;

(3)  by close-circuit speakerphones installed within each Upper Floor unit where the occupier of each unit would be able to view through a CCTV camera with a recording function at the Metal Gate through their televisions;

(4)  by phone linked to the Control Panel: Each unit on the domestic floors (that is, 3/F-11/F) can have one phone number linked to the Control Panel, and each of 1/F and 2/F has five phone numbers linked to the Control Panel. When a visitor presses the button on the Control Panel of a particular unit, the corresponding linked phone will ring and the person answering the phone may speak to the visitor and remotely unlock the Metal Gate for the visitor; and

(5)  by tapping a digital control card on the Control Panel: the 1^st Plaintiff and 2^nd Plaintiff has each received sixteen such digital control cards upon payment of a fee to the Defendant.

13.  With the Defendant’s permission, the Plaintiffs put a small sticker of their business name next to the 1/F button at the Control Panel. However, there is not enough room at the Control Panel for stickers for all licencees or tenants of the Plaintiffs who operate at 1/F or 2/F.

III.  PLAINTIFF’S CLAIM

14.  The Plaintiffs claim that under the DMC, they are entitled to full, free and uninterrupted right of access over the Main Entrance, and that the Metal Gate being closed at all times except when it is unlocked in the way described above is a wrongful interference with the right.

IV.  DEFENDANT’S DEFENCE

15.  The defence, in summary, is that the Plaintiffs are not entitled to full, free and uninterrupted right of access over the Main Entrance, and in any event, there is no wrongful interference with such right (if any) because the erection of the Main Gate being closed as it is reasonable. The Defendant also raises that there is waiver, estoppel or abandonment of the Plaintiffs’ right to access.

V.  ISSUES

16.  The issues, essentially set out in the List of Agreed Issues filed on 3 April 2025, are:-

(1)  Are the Plaintiffs entitled to a right of access over the Main Entrance (the “Right of Access”) under the DMC?

(2)  If so, does the Defendant’s maintaining of the Metal Gate at the Main Entrance wrongfully interfere with the Plaintiffs’ Right of Access?

(3)  If so, is the Defendant nevertheless entitled to maintain the Metal Gate at the Main Entrance under the Building Management Ordinance (Cap 344) (the “BMO”)?

(4)  Has there been any waiver, estoppel or abandonment of the Right of Access, and if so, whether the Plaintiffs are bound by such waiver, estoppel or abandonment?

(5)  What are the appropriate reliefs?

(6)  Does the present claim fall within the jurisdiction of the District Court?

VI.  EVIDENCE

17.  Because of the procedural history the proceedings have gone through (the details of which I do not need to set out here), the parties have filed affirmations but no witness statements. Further, the affirmations are taken as read at trial, without the deponents called to give live evidence.

VII.  ISSUES (1) AND (2): ARE THE PLAINTIFFS ENTITLED TO THE RIGHT OF ACCESS OVER THE MAIN ENTRANCE UNDER THE DMC AND IF SO WHETHER THE METAL GATE HAS WRONGFULLY INTERFERED WITH THE RIGHT OF ACCESS?

18.  Issues (1) and (2) are mostly an issue of contractual construction of the relevant provisions in the DMC.

19.  The legal principles in this regard are well-established. I summarise them below, based on Jumbo King Ltd v Faithful Properties Ltd & Ors (1999) 2 HKCFAR 279 at 296D-I per Lord Hoffmann NPJ and Donora Co Ltd v Tsuen Kam Centre (IO) (2024) 27 HKCFAR 166 at §37 per Lam PJJ:-

(1)  The construction is to discover what a reasonable person would have understood objectively, having regard to the agreement as a whole, the factual and legal background against which the agreement was concluded, as well as the practical objects the agreement was intended to achieve.

(2)  The DMC has to be read together with the first assignment(s) in a multi-unit building.

20.  The DMC provides, among others, that:-

“2. Each of the parties hereto and his tenants servants workmen visitors licensees and all persons by him authorised shall in common with his co-owners of the whole of the said premises and persons entitled to the like right have access to and be entitled to use the lift (if any) entrance-hall staircases and landings the common passages of and in the said building for all purposes connected with the proper use and enjoyment of the shop flat or space in the said building of which he is entitled to the exclusive use occupation and enjoyment and for the purpose of ingress and egress from such shop flat or space.

12. Each of the parties hereto shall not use the common entrance-hall, staircases, landings or passages of the said building for the purpose of drying laundry or hanging or placing or storing anything thereon or therein.

13. Each of the parties hereto shall not put or place any dust bins, garbage cans, furniture or chattels or any other things in the common entrance-hall, staircases, landings or passages of the said buildings.” (emphasis added)

21.  Further, every first assignment of each of the units in the Building, including the first assignment of 1-2/F and the 14 December 1966 First Assignments (except for that for the Roof), provides, materially, that:-

“… AND TOGETHER with a full free and uninterrupted right for the Purchaser and the owners and occupiers for the time being of the said premises his her or their tenants servants workmen and all other persons authorised by him or them in that behalf (in common with all other persons having the like right) for all purposes connected with the proper use and enjoyment of the premises hereby assigned (a) to go pass and repass up down over along and upon the entrance lobbies passages staircases and landings erected on such portions of the said premises as shown coloured Yellow on the said plan hereto annexed…”

22.  The area coloured yellow in the plan annexed to the first assignments covers the Main Entrance. Further, it is clear, in my view, that the “entrance-hall”, “staircases”, “landings” or “common passages” referred to in the DMC and the first assignments cover the Main Entrance.

23.  As regards the quality of the right of access, Mr Chester Kwan, counsel for the 1^st and 2^nd Plaintiffs, submits that having considered the following matters, I should find it to be a “full”, “free” and “uninterrupted” right of access:-

(1)  The clause of the first assignments set out in §21 above expressly refers to “full free and uninterrupted right”;

(2)  Clauses 12 and 13 of the DMC quoted above are consistent with the “full free and uninterrupted right” provided in the first assignments; and

(3)  The Approved Plan do not have the Metal Gate or any gate at the Main Entrance.

24.  Mr Kwan further relies on Chin Ling Investment Limited v The General of the Salvation Army, HCA 1/2012, 19 August 2016, where ST Poon J had the following to say in respect of a “free and uninterrupted right” to pass a strip of land granted under a Deed of Partition:-

“79. It is expressly stipulated under the [Deed of Partition] that the right enjoyed by the Plaintiff is a ‘free and uninterrupted’ right. In my view, if the right to use the Green Strip as passage is subject to the provision of a key or automatic device by the Defendant to open a gate, it can hardly be described as a ‘free and uninterrupted’ right to pass. Besides, as submitted by Mr Leong, to require the Plaintiff to stop their vehicles in order to open the gates either by hand or with automated devices is also inconsistent with a ‘free and uninterrupted’ right.

80. With respect, the argument of Mr Yin that the complaint of the Plaintiff is not directed against any particular mode of operation of the gate but the very presence of the gate is a fine one but unrealistic. The very purpose of a gate is to fend off others and to achieve such purpose the gate must be closed at least when it is required. This will result in a derogation of the grant on the part of the Defendant.” (emphasis added)

25.  That case, however, was not concerned with a DMC or multi-unit building.

26.  In the context of a DMC or multi-unit building, although such rights as the Right of Access have been labeled or described as “quasi-easements”: see Kung Ming Tak Tong Co Limited v Park Solid Enterprises Limited (2008) 11 HKCFAR 403 at §§40, 41 and 50 per Li CJ delivering the judgment of the Court of Final Appeal, they are not absolute as is a true easement. In such context, as Godfrey Lam JA explained in §48 of Whole Grand Ltd v Bo Fung Building (IO) [2024] 3 HKLRD 725:-

“… As a matter of general principle, the rights to use and enjoyment of common areas and facilities ‘are not absolute and must as a matter of construction be subject to an element of reasonableness and also must coexist with other provisions in the DMC unless specifically excluded…” (emphasis added)

27.  In assessing reasonableness, his Lordship explained at §68 of the same judgment that:-

“As to the question of reasonableness, it has to be borne in mind that, first, building management is a matter primarily for the manager and the owners corporation of a building. On many issues there will be a range of reasonable options open to the management. Within that range it is not for the Tribunal [or the Court] itself to manage the building and substitute its own decisions on what are reasonable management measures…” (emphasis added)

28.  In other words, the Court is not tasked to see whether there is any better measure. Rather, the Court is tasked to determine, objectively, whether the current measure in question falls within a reasonable range.

29.  On the one hand, the chairperson of the Defendant, Wong Lai Foon, points out the following matters, primarily focused on the safety and security of the residents and the existence of a gate at the Main Entrance for decades:-

(1)  “The management counter of the Building is located at the end corner of the L-shaped hallway at 1/F outside the lifts. The space is only sufficient to house one caretaker at a time. There is no other available space in the lobby or corridors to house the management counter”: see Wong Lai Foon’s Affirmation §11(c);

(2)  “[T]he caretaker at the management counter does not have direct vision nor control over the people walking up from the [Main Entrance]. For such reason, it would be very difficult (if not impossible) for the caretaker to perform ‘stop and check’ on each and every visitor like other developments. It would be easy for any visitor to ‘sneak’ and enter the upper domestic floors by turning left and take the stairs to 2/F and other upper floors at the end of the hallway without notice by the guard”: see Wong Lai Foon’s Affirmation §11(d);

(3)  The Building is located in a neighbourhood which is “not particularly safe and can sometimes be chaotic. All kinds of street crimes and nuisances… are prevalent. Safety and prevention of crime is indeed a serious concern of all residents”: see Wong Lai Foon’s Affirmation §21;

(4)  Over the years, as informed by the police and fellow neighbours, it was very common to find strangers trespass buildings in the vicinity and cause nuisance and annoyance, including damaging door locks, breaking into buildings, burglary, unauthorised access to dump trash or even excrete in the staircases of buildings. There have been occasions where drug addicts and homeless people entered the Building through the fire escape, and burglary and robbery in the Building in 1996, 1997 and 2000: see Wong Lai Foon’s Affirmation §22;

(5)  Many buildings in the vicinity also have their main gates closed mostly for security reasons: see Wong Lai Foon’s 2^nd Affirmation §21;

(6)  Posters have been put around the Metal Gate providing clear instructions for first-time visitors on how to open the Metal Gate: see Wong Lai Foo’s 2^nd Affirmation §27;

(7)  The various ways to open the Metal Gate for visitors were relatively quick: see Wong Lai Foo’s 2^nd Affirmation §§24-26;

(8)  “Save that a meeting was called in the past by the past 1/F owner… to explore about having the [Metal Gate] to be opened during daytime (which became voted down), no complaint was raised by the predecessors of the Plaintiffs regarding any interruption or inconvenience caused to them or their occupiers, visitors, and/or customers”: see Wong Lai Foo’s 2^nd Affirmation §28;

(9)  Many residents think that the existing security measure by the Metal Gate is not sufficient in the view of the increased crime in the vicinity: see Wong Lai Foo’s 2^nd Affirmation §§29-30;

(10)  The Defendant has been as accommodative to the Plaintiffs’ requests as reasonably practicable bearing in mind the security of the Building as a whole. For example, upon the Plaintiffs’ complaint that the Metal Gate’s unlocking time, once unlocked, was too short, the Defendant arranged for adjustment from 6 second to 10 seconds: see Wong Lai Foo’s 2^nd Affirmation §31; and

(11)  The arrangement of having a gate at the Main Entrance dates back to at least 1967, and it is thus a status quo and consensus among all the co-owners for decades, representing “the most practical and speediest and least intrusive measure”: see Wong Lai Foo’s 2^nd Affirmation §31(e).

30.  Further, Ms Rachel Lee, not a resident or occupant of the Building, deposes for the Defendant that the shops on 1/F and 2/F could have used social media more actively to promote themselves, and in any event, the posters and advertisements displayed on the windows of the floors are sufficient to attract pedestrians’ attention. She also deposes that it would be safer and more secure for shoppers with a gate at the Main Entrance.

31.  Still further, Madam Ho Yuk Kuk, a resident of the Building, deposes for the Defendant that there had already been a gate at the Main Entrance when she moved into a unit there in 1967, and has since lived there, and that to her knowledge the gate was installed for safety and security purpose. She also deposes that in the 1970s and 1980s until 2007, there had been various businesses or restaurants operating on 1/F and 2/F.

32.  On the other hand, the Plaintiff mentions the following matters:-

(1)  The Control Panel does not have sufficient space for stickers for each shop on 1/F and 2/F: see Affirmation of Danny Kwok, Business Advisor of the Plaintiffs §12;

(2)  “The free flow of shoppers and potential customers from the streets to 1/F is… very important to the business of the mall and the shops”: see Danny Kwok’s Affirmation §24;

(3)  Because of the Metal Gate, only 4 shop areas have been licensed out: see Danny Kwok’s Affirmation §24;

(4)  “[T]he free flow of customers from the streets to 2/F is important for 2/F's commercial use”: see Danny Kwok’s Affirmation §25;

(5)  Various buildings in the neighbourhood do not have their gates closed during daytime or even do not have any gates: see Danny Kwok’s 2^nd Affirmation §5;

(6)  The various ways to open the Metal Gate for visitors were slow and inconvenient: see Danny Kwok’s 3^rd Affirmation §3; and

(7)  The Metal Gates could be opened during daytime only and closed during nighttime for safety and security reason: see Danny Kwok’s 3^rd Affirmation §3.

33.  To determine the range of reasonableness, in my view, the Court should consider all the relevant circumstances. An important consideration is the user of the building in question. In the present case, the Building is a mixed building of commercial and residential use. As the use of the Main Entrance affects the whole Building, both the commercial and residential interests have to be considered. In my view, whether to keep the Metal Gate closed at all times for safety and security reason, to keep the Metal Gate closed only during nighttime, or to keep it opened all the times, is a value judgment of the Building as a whole, in particular, whether the Building as a whole would place more emphasis on the residents’ safety and security concern, or on the profitability concern of commercial owners or occupants. In my view, emphasis on either side in a mixed building like the Building in such neighbourhood is reasonable.

34.  The effectiveness of the measure is another important consideration. If the measure interferes with the Right of Access without serving its purpose at all, there is a stronger case for unreasonableness. The Plaintiffs rely on the Defendant’s own evidence in §40 of Wong Lai Foo’s Affirmation that even the present arrangement would allow strangers to disguise themselves as visitors to 1/F or 2/F to enter the Building, to say that the Metal Gate being closed has not served the safety and security purpose. The Plaintiffs may be right. However, in my opinion, it is reasonable to think that the Metal Gate being closed still serves a deterrence or obstruction for safety and security purpose: at least to some strangers, they would still have to speak to 1/F or 2/F at the risk of leaving some kind of trail by voice or through the CCTV camera, and to some others, they may not even want to take the trouble to disguise themselves and are deterred from entering. Further and in any event, clearly, the Plaintiffs cannot say that there is no difference with or without a gate at the Main Entrance: they themselves take the view that even for legitimate visitors, the Metal Gate would undermine their desire to enter the Building. Therefore, the Metal Gate still has at least some effect to serve its purpose. As to how much effectiveness should tilt a measure from one of reasonableness to one of unreasonableness or the other way round, it is again a value judgment and in general, so long as there is some effect, the Court should be loath to find that the measure is unreasonable.

35.  The third consideration, being equally important, is whether there are any owners’ resolutions that assist the Court in ascertaining the value judgment made by the building as a whole. In a sense, absence of any such owners’ resolutions on a status quo may also be indicative. Where appropriate, such absence may be taken to mean that the building as a whole thinks that the status quo is reasonable. I am not saying that any relevant owners’ resolution or any absence thereof is conclusive or binding on the Court. The Court should still consider all the relevant circumstances (for example, whether the measure, though approved of by the owners, can be reasoned at all) to determine whether the measure or decision taken in respect of the use and enjoyment of common areas and facilities lies within a reasonable range. What I am saying is that any relevant owners’ resolution or any absence thereof is an important consideration especially when value judgment is involved and/or it is otherwise a borderline case. In the present case, on the evidence of Madam Ho who has the personal knowledge while the Plaintiffs do not, I find that that a gate has been installed since at latest 1967. Further, there was a meeting called by the predecessor-in-title of 1/F in the past to explore whether the Metal Gate could be opened during daytime: see Wong Lai Foo’s 2^nd Affirmation §28. There have, however, been no owners’ resolution on any gate at the Main Entrance. I bear this in mind in my determination on whether the Metal Gate is within a range of reasonableness.

36.  I should also add, in response to the Plaintiffs’ suggestion that the Metal Gate would be kept opened only during daytime but not nighttime, that while whether there are alternatives is a factor I should consider, the existence of alternatives, or even better alternatives, does not necessarily mean that the current measure is unreasonable.

37.  Having considered the above evidence and matters set out under this Part, I conclude that the Metal Gate as it is now is within a range of reasonableness.

38.  Therefore, the Defendant has not wrongfully interfered with the Right of Access by maintaining the Metal Gate in the way as it now is.

VIII.  ISSUE (3): IS THE DEFENDANT ENTITLED TO MAINTAIN THE METAL GATE AT THE MAIN ENTRANCE UNDER BMO?

39.  For the reasons given in Issues (1) and (2) above, the Defendant is entitled to maintain the Metal Gate at the Main Entrance as it is under the BMO.

IX.  ISSUE(4): HAS THERE BEEN ANY WAIVER, ESTOPPEL OR ABANDONMENT OF THE RIGHT OF ACCESS, AND IF SO, WHETHER THE PLAINTIFFS ARE BOUND BY SUCH WAIVER, ESTOPPEL OR ABANDONMENT?

40.  For the sake of completeness, assuming that the Right of Access would mean that there should not be the Metal Gate or any gate at the Main Entrance, I would agree with the Plaintiffs that there has not been any acquiescence, waiver or estoppel of the Right of Access, for the simple reason that any acquiescence, waiver or estoppel is personal in nature and does not bind successors-in-title: see The Incorporated Owners of Kam Luk Building v 吳靜燕 [2022] HKCA 1896 at §76; Grand Power International v Chan Sing Hoi Enterprises [2020] 2 HKLRD 142 at §§46-49.

41.  Insofar as it would be suggested that the Plaintiffs themselves have acquiesced, waived or been estopped, given that they started to complain about the Metal Gate and commenced the present action shortly after the acquisition of 1/F on 31 December 2021 and 2/F on 30 December 2022, I would find that the Plaintiffs have not acquiesced, waived or been estopped.

42.  In respect of abandonment, Mr Adrian But, counsel for the Defendant, fairly accepts in the light of Kwok Mo Kai Doris v The IO of Karin Court, CACV 267/2005, 2 June 2006 at §16; Hollywood Shopping Centre Owners Committee Ltd v Wing Wah Building Mongkokg Kowloon (IO) [2011] 4 HKLRD 623 at §62, that it is difficult for the Defendant to run the defence of abandonment in the context of a DMC. In any event, the evidence before me is insufficient to sustain any abandonment. Therefore, I would reject this defence as well.

X.  ISSUE (5): WHAT ARE THE APPROPRIATE RELIEFS?

43.  In the circumstances, the Plaintiffs are not entitled to any relief.

XI.  ISSUE (6): DOES THE PRESENT CLAIM FALL WITHIN THE JURISDICTION OF THE DISTRICT COURT?

44.  As mentioned above, this jurisdictional issue was raised by at the Pre-trial Review.

45.  Section 36 of the District Court Ordinance (Cap 336) provides that:-

“Jurisdiction where title in question

The Court has jurisdiction to hear and determine any action which would otherwise be within the jurisdiction of the Court and in which the title to an interest in land comes into question if—

(a) for an easement or licence, the rateable value, determined in accordance with the Rating Ordinance (Cap. 116) or the annual value, whichever is the less, of the land, over which the easement or licence is claimed, does not exceed $320,000; or

(b) for any other case, the rateable value, determined in accordance with the Rating Ordinance (Cap. 116) or the annual value, whichever is the less, of the land, does not exceed $320,000.” (emphasis added)

46.  Quasi-easements have been held to fall within the meaning of “easement” in section 36(a): see Incorporated Owners of Triumph Court v Law Ping Patsy [2020] 4 HKC 100 at §39.4 per Yuen JA.

47.  Mr Chester Kwan, counsel for the 1^st and 2^nd Plaintiffs, submits that the “land” in the question should be the land to which the easement is appurtenant, and in the present case, it is the whole Building. With respect, I disagree. The preamble refers to “the title to an interest in land”; then subsection (a) refers to “for easement”, and the value of “the land”. In my view, the text is clear enough to mean that when the question is “the title to an interest in land”, and when the “interest in land” is an easement (or quasi-easement), the easement is “the land” to which the title is called into question. Therefore, in my view, even on a literal interpretation alone, it is the value of the land over which easement is claimed that matters.

48.  In any event, I should interpret section 36 liberally bearing in mind the purpose of the District Court Ordinance: see Ng Cho Chu Judy v Chan Wing Hung [2017] 4 HKLRD 396 at §37 per Kwan JA. In this regard, in Ng Cho Chu Judy v Chan Wing Hung, supra, Kwan JA had the following to say:-

“27. As summarised by the Judge, the purpose of the establishment of the District Court and the ongoing enlargement of its civil jurisdiction throughout the years is to divert more civil cases to the District Court from the Court of First Instance to the extent it is feasible and appropriate to do so. And there are two underlying reasons for the preference to offload cases to the District Court to the extent practicable. First, it enables the Judges of the Court of First Instance to focus on and devote their time and efforts to cases warranting their attention, such as cases where a large value is at stake or where complex issues are involved. Second, from a litigant’s point of view, where the value of the claim is small or the case is straightforward, he can benefit from the relatively low costs of litigating in the District Court, as a lower scale of costs applies and solicitors have full rights of audience.

28. To achieve the above purpose, the Ordinance has adopted two means to control what cases can be diverted to the District Court. The first is to confer jurisdiction by reference to the types of cases that will come within the District Court. The second is to specify monetary limits within the prescribed types of actions that will come within the District Court, to ensure that the “high value” cases would stay in the Court of First Instance.” (emphasis added)

49.  In other words, where possible, the Court should interpret the provision in a way that the claim falls within the jurisdiction of the District Court. Therefore, this liberal and purposive approach only reinforces the conclusion I reached above by literal interpretation, namely, that the land in question in the present case should be the area on which the easement is claimed.

50.  In the present case, it is the easement over the area of the Metal Gate that is called in question.

51.  There seems to be suggestion from the parties that it was impossible to know the rateable value of that little piece of area. Such suggestion is devoid of reality. In the present case, no one can realistically say that there might be a chance that that little piece of area may carry a rateable value over HK$320,000. For other cases, there can be some basis for a reasonable estimate of a certain part of the rated land in question, say, by apportionment or, if necessary and cost-proportional, some form of valuation. In borderline cases, the Court would certainly be reasonable to parties who would choose to err on the side of High Court. But the present case certainly is not such a borderline case.

52.  Mr Kwan (for the Plaintiffs) submits that my interpretation above would mean that most, if not all, of the cases of easement or quasi-easement would fall within the jurisdiction of District Court. This may well be so, but I do not see any problem in this. Nor do I see how this would offend, as Mr Kwan suggests, §36 of Ng Cho Chu Judy v Chan Wing Hung, supra, where Kwan JA referred to the lowering the monetary limit for rateable value to address the concern that the District Court would virtually be the only court in Hong Kong dealing with property disputes. I am concerned here with disputes over easements and quasi-easements, and there are still many property disputes that involve lands of value above the threshold chosen by the legislature. In my view, if this is the legislative intent (and I find that this is), there is nothing wrong that the practical effect is that most, if not all, of the easement and quasi-easement cases fall within the jurisdiction of District Court.

XII.  ORDER

53.  In the circumstances, I shall dismiss the Plaintiffs’ claim.

XIII.  COSTS ORDER AND PARTIES’ DUTY TO COMMENCE AND DEFEND IN THE CORRECT FORUM

54.  Costs should follow the event.

55.  In relation to the basis of taxation, as I find above, the claim is a District Court claim. Although it was the Plaintiffs who chose to commence the action here in the High Court, all the parties and their legal representatives have duty under Order 1A rule 3 of the Rules of High Court and Order 1A rule 3 of the Rules of District Court to further the underlying objectives set out in Order 1A rule 1. Pertinent to the choice of a correct forum, in my view, are the following objectives:-

“(c) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings…

…

(f) to ensure that the resources of the Court are distributed fairly”.

56.  In my view, commencing a claim in the High Court which should have been in the District Court as envisaged by the legislature is not promoting “a sense of reasonable proportion and procedural economy in the conduct of proceedings” and is a disturbance to a fair distribution of the Court resources. The two benefits of the District Court Ordinance as identified in §27 of Ng Cho Chu Judy v Chan Wing Hung, supra, quoted and emphasised in §48 above, reinforce my view.

57.  Therefore, while the Plaintiff started the present action in the wrong forum, the Defendant has all along had the duty to bring this jurisdictional matter to the Court and the Plaintiffs and make necessary applications for transfer. Although in §2 of the Defence, the Defendant pleaded its position that “the claim should have been commenced in the District Court”, it has never made any application for transfer, as if with this plea without more, the Defendant would have discharged its duty to the Court. Mr But, for the Defendant, submits that the Defendant was concerned that a transfer to the District Court would mean that all the proceedings would have to be re-started including filing and service of pleadings in the District Court. This all the more shows that the Defendant, if not the Plaintiff, should have made necessary application as soon as possible.

58.  In the circumstances, both parties are to blame. The scale for taxation, irrespective of who is the paying party, should hence be District Court scale only.

59.  Therefore, I make a costs order nisi that the Plaintiffs pay the Defendant costs of the action (including any costs reserved), with certificate for counsel, to be taxed on District Court scale, if not agreed.

60.  It remains for me to thank Mr Kwan (counsel for the Plaintiffs) and Mr Adrian But (counsel for the Defendant) for their assistance.