WONG WAN LEUNG AND OTHERS v. SECRETARY FOR TRANSPORT

CACV 289/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 289 OF 1999

(ON APPEAL FROM LDMR 33/1998)

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J U D G M E N T

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Hon Godfrey VP :

Introduction

1. This is the judgment of the court in an appeal from an order of the Lands Tribunal made on 17 September 1999, the effect of which was to deny a claim by the Wong Wai Tsak Tong for compensation, under section 29(7) of the Roads (Works, Use and Compensation) Ordinance, Cap. 370, for the resumption by the Government (acting by the Secretary for Transport) of part of Lot 241 in Demarcation District Cheung Chau, New Territories. The central question in the case concerned the Tong's title to this land. The Secretary for Transport refused to accept that the Tong had any such title; the Lands Tribunal agreed; and the Tong now appeals.

The facts

2. These are not in dispute and are very clearly set out in the judgment of the Lands Tribunal as follows :-

"The Tong was the Government lessee of the Lot under a Block Crown Lease dated 18th March 1905.

The portion of the Lot was resumed under Section 13(1) of the Cap.370, by a Gazette Notice Number 2608 dated 29th May 1997, effective on midnight of 26th June 1997.

Under Cap.370, compensation is payable to the persons who may make claims. These persons are specified in Column 3 of Part II of the Schedule to Cap.370 as follows:

'Any person who would be entitled to claim compensation for land resumed under the Lands Resumption Ordinance (Cap.124) as if the land had been resumed thereunder.'

The quantum of compensation is not in dispute. The amount is agreed to be $3,470,865.

There are no competing claimants. Only the title of the Tong is in dispute.

The Opposition

The Secretary for Transport opposed the application, on the grounds that the Applicants are not persons entitled to compensation, under Column 1 of Part II of the Schedule to Cap.370. The Secretary for Transport relied on the fact that there was a sub-lease, which had not been forfeited prior to the Gazette Notice. The Secretary for Transport also relied on the effect of the Block Crown Lease (Cheung Chau) Ordinance Cap.488 (Cap.488), which granted a Government lease to the sub-lessee as from 8th September 1995, the commencement date of that Ordinance. It was the Secretary's case that by Cap.488, the Tong's title in the Lot was extinguished as from 8th September 1995.

On or about 9th April 1914, the Tong sublet the Lot to Cheung Chau Kai Fong(CCFK), an unincorporated association. The sub-lessee was to pay an annual rent of $49, for a term of 5 years, from 7th November 1919, renewable on the same terms, until the termination of the Government lease. The sub-lease was registered in the Land Registry on 18th June 1920, under Memorial Number 17898.

On 11th June 1993, the Tong received a letter from the District Lands Officer Islands, complaining about a tree that might become dangerous. The District Lands Officer demanded that the tree should be trimmed.

On 1st July 1993, the Tong was advised by the Buildings and Lands Department to repair the buildings on the Lot.

The Tong, under Section 58(1) of the Conveyancing and Property Ordinance Cap.219, notified the manager of CCKF, Mr. Chu Pak Sang, to rectify the defects. There was no response. The Tong trimmed the branches of the tree at its own expense.

On 20th September 1993, the Tong issued a writ under High Court Action Number A8401 of 1993(The High Court action), against the manager of the CCKF. The Tong sought to forfeit the sub-lease due to the breach of covenant to repair. The writ was registered in the New Territories Lands Registry under Memorial Number 222241. The Tong sought a declaration order in its action against CCKF, that the sub-lease had been forfeited since 11th August 1993, or from such date as the Court thought fit, or from the date that the writ was issued.

On 20th October 1993, the Buildings and Lands Department wrote to the Tong, stating that most of the defects had not been remedied.

On 20th November 1993, CCKF filed a defence based on adverse possession, perpetual lease and that there was no breach of the covenant to repair.

On 8th September 1995, the Block Crown Lease (Cheung Chau) Ordinance Cap.488 (Cap.488) commenced. As from that date, a sub-lessee of the Tong is deemed to hold land under a sub-lease directly from the Government, as Government lessee, under Section 4(1) of Cap.488.

In reply to the Tong's request on 27th December 1996, for further and better particulars, the solicitors acting for CCKF informed the Tong that the manager of CCKF had died. The solicitors ceased to act for CCKF on 17th April 1997. Thereafter, no one took up the defence for CCKF.

The Tong obtained an order for the action against CCKF to be continued in the name: 'John Doe (on the demise of Chu Pak Sang) as a member of Cheung Chau Kai Fong'. The application was made on 8th April 1997, and the order obtained on 17th July 1997. In the meantime, the Gazette Notice under Cap.370 was issued on 29th May 1997. At midnight on 26th June 1997, the Government resumed the Lot.

The Tong has not obtained the declaration order sought under the High Court action A8401 of 1993.

All of the foregoing are not in dispute and are found to be the facts of the case."

The statutory background

3. It will be helpful, before turning to an examination of the merits of the Tong's appeal, to set out some extracts from those statutory provisions which are relevant for present purposes and are to be found in the Block Crown Lease (Cheung Chau) Ordinance, Cap. 488 ("the Ordinance"). This Ordinance, we were told, was passed so as to resolve a multitude of differences which had arisen between the Tong and its sub-lessees of land at Cheung Chau.

4. The preamble to the Ordinance reads as follows :-

"An Ordinance to provide for the termination of the Block Crown Lease of Cheung Chau granted to Wong Wai Tsak Tong and for sub-lessees under the Block Crown Lease to hold directly from the Government."

5. The expression "Block Crown Lease" is defined in section 2 of the Ordinance as follows :-

"'Block Crown Lease' (集體官契) means the Block Crown Lease of the survey district Cheung Chau dated 18 March 1905 and made between the 'Crown' of the one part and Wong Wai Tsak Tong of the other part, whereby certain lots in Cheung Chau were demised, and includes grants of lots in favour of Wong Wai Tsak Tong made after 18 March 1905 and other grants of lots made after that date which have been assigned to Wong Wai Tsak Tong;"

6. "Sub-lease" is defined in the same section as follows :-

"'sub-lease' (分租契) means a sub-lease granted by Wong Wai Tsak Tong which has been registered in the Land Registry before the commencement of this Ordinance of land or undivided shares in land held under the Block Crown Lease for a term of years specified in the sub-lease and renewable on the same terms until the termination of the Block Crown Lease, whether renewed or not, and includes such a sub-lease which has been assigned in whole or in part or has been retained in part following an assignment and which assignment has been registered in the Land Registry before the commencement of this Ordinance;"

7. Section 3 of the Ordinance reads as follows :-

"3. Termination of the Block Crown Lease

Upon this Ordinance coming into operation as provided by section 1(2), the Block Crown Lease granted to Wong Wai Tsak Tong is terminated."

The Tong's case

8. The Tong's case is that, by 8 September 1995, when the Ordinance came into operation, the sub-lease in favour of the Cheung Chau Kai Fong, although still registered, was on the facts found by the Lands Tribunal no longer subsisting or capable of taking effect; so the person entitled to compensation as a result of the resumption was, not the sub-lessee, but the Tong itself, as former owner of the land.

The Secretary for Transport's case

9. The Secretary for Transport's case is that, even if on 8 September 1995 this sub-lease was no longer subsisting or capable of taking effect, it was still registered, and would accordingly have fallen within the definition of "sub-lease" contained in section 2 of the Ordinance. The Tong's interest would thus have been terminated under section 3 of the Ordinance. (The Secretary for Transport was ready with other arguments concerning the forfeiture, or alleged forfeiture, of the sub-lease, if that was wrong; but we indicated that we would reserve these arguments for further consideration after we had reached a conclusion on the point first taken, since, if we were with the Secretary for Transport on this point, the further matters concerning the forfeiture, or alleged forfeiture, of the sub-lease would not call for determination.)

Conclusion

10. We have no doubt that the first point taken by the Secretary for Transport is correct. On 8 September 1995, the registration of the sub-lease was still subsisting, even if the term created thereby was liable to forfeiture, and even if it had, in fact, been forfeited. In our opinion, the Ordinance does not require any investigation into such, often difficult, questions as to whether, and, if so, when a forfeiture of a sub-lease took place or may have taken place. Either the registration had been expunged or it had not. In fact, here it had not. So the Block Crown Lease of the Tong covering the property in question was duly terminated under section 3 of the Ordinance on 8 September 1995; and therefore, the Tong has no interest in this property in respect of which it is entitled to compensation under the Roads (Works, Use and Compensation) Ordinance, Cap. 370.

Result

11. We will dismiss the appeal accordingly, and order (subject to the provisions of Order 42 rule 5B(6) of the Rules of the High Court) that the costs of the Secretary for Transport of this appeal be taxed (if not agreed) and paid by the managers of the Tong to the Secretary for Transport.