ASIAN WELL TECHNOLOGIES LTD v. LEE YEE MAN AND OTHERS

CACV 595/2018

[2020] HKCA 521

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 595 OF 2018

(ON APPEAL FROM HCA NO. 467 OF 2013)

________________________

________________________

__________________

D E C I S I O N

__________________

Hon Cheung JA (giving the decision of the Court) :

I. Leave to appeal

1.1     The plaintiff applies for leave to appeal to the Court of Final Appeal against our judgment of 16 January 2020. It advanced seven questions which are said to be of ‘great general or public importance, or otherwise concerning the law pertaining to the easements obtained by the doctrine of lost modern grant, and adverse possession’.  The plaintiff asks for an oral hearing of the leave application.  Having considered the notice of motion and submissions, we see no reason to depart from the usual practice of determining applications for leave to appeal to the Court of Final Appeal on paper without an oral hearing.  We will now deal with the application on paper.

1.2     In relation to the easement claim over Land A :

1)     Whether the doctrine of non-derogation of grant precludes a predecessor in title (in this case Yau Senior) of the servient tenement from receiving an easement for right of way by lost modern grant over the same servient tenement, in his capacity as a licensee of the leasehold owner of the dominant tenement subsequently?

2)     Whether a bare licensee of the dominant tenement (in this case Yau Junior) is able to claim an easement by lost modern grant, either for himself and/or on behalf of his licensor, by virtue of the licensee’s 20 years’ continuous user of the servient tenement, assuming that there is such 20 years’ continuous user by the bare licensee himself?

3)     Whether the part of the time spent in continuous user by a bare licensee of the dominant tenement (in this case Madam Lee), who subsequently acquired title as a leasehold owner of the dominant tenement, counts towards the 20‑year period required for acquiring an easement by lost of modern grant? 

4)     In the operation of the doctrine of lost modern grant, what is the correct legal test for proving non‑acquiescence by a land owner (in this case Merrett Boyd Henry)?  In particular, what act(s), if any, amounts to sufficient protest against the acquisition of prescriptive rights by the easement claimant?

5)     Where the claimant to prescriptive rights himself adduces evidence to show his intention to possess and the factual possession of the land to support a claim for adverse possession over the entire subject land (which adverse possession claim has failed), in what circumstances if any, is the Court nevertheless entitled to find as a matter of law that a prescriptive easement could be received by the claimant by the doctrine of lost modern grant over the subject land?

1.3     In relation to adverse possession claim over Land X1 :

6)     In considering the question of factual possession, what weight, if any, should the Court attach to third party contemporaneous documents showing a predecessing landowner’s (in this case Madam Ko Wai Yee) exercise of control over the subject land during the limitation period, which evidence contradicts the squatter’s claim for sole possession during that period?  In particular, whether in those circumstances, the conclusion of lack of factual possession by the squatter must be drawn, so that the issue should be resolved in favour of the landowner as a matter of law?

7)     Where during the trial, a squatter claiming for adverse possession is given leave to amend his pleadings to rely on a specific 20‑year period [as] the sole basis for proving the factual possession and intention to possess required, to what extent and in what circumstances is the squatter permitted to subsequently depart from his amended pleadings in the later part of the trial, to shift his reliance on the specific 20‑year period to a different period of 12 years for the purpose of establishing the adverse possession claim?

II.      Our view

Great, general, public importance ground

1)     Question 1

2.1     In relation of the general principle of non‑derogation of grant, Ribeiro PJ in Rank Profit Industries Ltd v Secretary for Justice FAMV 8/2009 (25 June 2009, unreported), paragraph 12 held that :

‘ The application of that general principle to particular facts, as we there noted, requires identifying in the first place what obligations, if any, on the part of the grantor can fairly be regarded as necessarily implicit in the grant, taking into account the particular purpose of the transaction when considered in the light of the circumstances subsisting at the time it was entered into. Only then can one determine whether the grantor’s conduct constitutes a derogation from grant in violation of the implicit obligation identified.’ (emphasis added)

2.2     In this case this general principle was advanced as an argument without identifying the specific factors as required in Rank Profit Industries Ltd. The plaintiff is not permitted to take the point without the foundation being properly laid in the first place.  The question is academic and the great, general, public importance threshold requirement (‘the threshold requirement’) is not engaged.

2)     Questions 2 and 3

2.3     These two questions are academic and do not engage the threshold requirement.  The period between 1982 and 1987 was not raised as an issue before us at all.  The real issue as can be seen from our judgment is whether Madam Lee had acquired a prescriptive right of way over a 20‑year period.  This 20‑year period has been well accrued from 1987 onwards.

3)     Question 4

2.4     This question is fact-specific and the threshold requirement is not engaged.

2.5     The right of way in Area A is identified by the passage between G1 and G2 in Exhibit P1.  This passage does not fall within Land Z.  Further, the adverse possession claim of Land Z was abandoned at the trial.

2.6     The consideration of Mr Merrett’s demolition of the gate and wall in Area A goes only towards the question of weight, just like his evidence that after the demolition he had never stopped the Yau family from using the area as a means of access.  This is not a proper basis to upset a finding of fact.

4)     Question 5

2.7     Despite the wide wording of this question, the real question as can be seen from the plaintiff’s submissions is whether a prescriptive easement can be acquired where one of the purposes or the pre-dominant purpose of the easement was to trespass on Government Land. 

2.8     The plaintiff has not submitted that Loyal Luck Trading Ltd v Tam Chun Wah [2008] 4 HKLRD 681 was wrongly decided.  This is a fact‑specific issue depending on the circumstances of the case.  The threshold requirement is not engaged.

5)     Question 6

2.9     As the plaintiff itself recognized, this is a matter that goes to the weight of the evidence which is within the province of the tribunal of fact.  The matter is fact‑specific and the threshold requirement is not engaged.

6)     Question 7

2.10     The amendment of the defence was made with the consent of the plaintiff who also provided consequential amendments to its own pleadings.  We do not see how the threshold requirement can be engaged in the first place.

III.     ‘Or otherwise’ ground

3.     Although the ‘or otherwise’ ground is advanced, no particulars are given in the Notice of Motion as to how this ground is engaged.  It is only in Mr Ng’s reply submissions that he submitted that the ‘or otherwise’ ground is engaged in respect of Questions 6 and 7.  Consistent with the practice of this Court, we will defer to the Court of Final Appeal as to whether this ground is engaged.  However it must not be forgotten that the plaintiff was represented by senior counsel on appeal and points that could reasonably have been taken had indeed been extensively taken on the plaintiff’s behalf.

IV.     Conclusion

4.     Accordingly the application is dismissed with costs to the defendants.  We will summarily assess the defendants’ costs of the application at $150,000 which includes $90,000 for counsel’s fee.