In the recent case of Leading Well Limited v Secretary for Justice (on behalf of the Director of Lands) [2024] HKCA 821, the Court of Appeal considered whether the approach road at issue could be regarded as a “specified street” under Regulation 18A(3)(a)(iv) of the Building (Planning) Regulations (Cap. 123F) (the “B(P)R”).
Its judgment on 27 August 2024 allowed the appeal of Leading Well (the “Plaintiff”), clarifying a regulation of considerable interest to developers and investors.
Background
The Plaintiff owns certain land (collectively “P’s Lots”) subdivided out of Lot No. 1469 (Lot 1469) in Demarcation District No. 189 (DD 189). Lot 1469 abuts an approach road known as Shatin Heights Road (the “Road”), which is also connected to Lot No. 1470 (Lot 1470) and Lot No. 1471 (Lot 1471) in DD 189.
As the Plaintiff plans to develop P’s lots, the parties’ dispute was whether they qualify as a “class A site” – which enjoys higher redevelopment potential and value. To qualify as such, P’s Lots must abut onto one or more “specified street(s)”.
Regulation 18A(3)(a)(iv) of the B(P)R
Pursuant to Regulation 18A(3)(a)(iv) of B(P)R (the “B(P)R reg. 18A(3)(a)(iv)”), “a street is to be regarded as a specified street” –
(a) if there exists, with respect to the street, any of the following circumstances –
(…) (iv) “the street is on land over which the owner of the site is expressly granted, by or by virtue of an instrument, a right of way exercisable at all times …”
The difficulty with the Plaintiff’s case is that there was no one single document or instrument which contained the written words that “a right of way” was granted to the owner of Lot 1469 over the Road. The Plaintiff nevertheless submitted that – on proper construction of the relevant facts and documents – the Land Grant of Lot 1469 was an instrument by virtue of which the Plaintiff had been expressly granted a right of way over the Road.
The Plaintiff sought a declaration that it had been expressly granted – by or by virtue of an instrument – a right of way exercisable at all times over the Road.
Proper construction of “by virtue of”, “an instrument” and “expressly granted”
The major issue considered by the Court of Appeal was the proper construction of B(P)R reg. 18A(3)(a)(iv), particularly the proper meanings of “by virtue of”, “instrument” and “is expressly granted”, which are first considered by Hong Kong courts.
The Court of Appeal held that:
- The words “by virtue of” did not carry the same meaning as “by” in the regulation, and instead should be taken to mean “in consequence of” or “because of” when given its plain and ordinary meaning.
- An “instrument” could include more than one document; and applying its plain meaning in the context of considering whether a right of way was granted over land, it could be a deed, agreement, plans and or formal correspondence.
- The phrase “is expressly granted” was not limited to the situation where the words “right of way” were expressly spelt out or stated in the relevant instrument (as this would already fall under the situation where a right of way is granted “by” an instrument). It also extends to cover the situation where there were other words, drawings and diagrams in the relevant instruments which, when read singly or together properly, showed clearly and unambiguously that the owner of the subject site was given a right of way over the relevant road or street.
Given the above proper construction, the right of way over the Road would meet the requirements under B(P)R reg. 18A(3)(a)(iv) if there are words, drawings, identifications or diagrams provide in the relevant instruments which show clearly and unambiguously that right of way was granted to the owner of Lot 1469.
Application of BPR Reg. 18A(3)(a)(iv)
Upon considering the relevant documents in tandem objectively and in proper context, the Court of Appeal found clear intention of the Government to grant to Hotel Edinburgh Ltd (“HEL”) – as the first purchaser of Lots 1469, 1470 and 1471 in 1953 (the “3 Lots”), a right of way over the approach road which shall provide access to Tai Po Road for the 3 Lots. In coming to this conclusion, the Court found that :-
- When HEL expressed its intention to purchase Lots 1469 and 1470 together, it also intended to construct an approach road linking both lots to Tai Po Road (as the lots were otherwise landlocked).
- Upon receiving the respective deposit agreements under which HEL applied to buy Lots 1469 and 1470, it was also the Government’s expressed intention to require the purchaser of Lot 1470 to construct that approach road; as intended and indicated by HEL in the deposit agreement and plan in respect of Lot 1470.
- When the Government offered Lots 1469, 1470 and 1471 for sale by auction after receiving HEL’s intention to purchase them (or at least Lots 1469 and 1470), it must again have been the Government’s expressed intention to require the purchaser of Lot 1470 to construct that approach road linking the 3 Lots to Tai Po Road.
- Further, given the factual context that the Government was offering to sell the 3 Lots together – and that they were completely landlocked without the approach road, as appearing on the plan – it must be plain and obvious that in requiring the purchaser to construct the approach road, the Government had expressed an intention to grant right of way over it for the use of the owner and occupiers of the 3 Lots.
- The lower court had erred in limiting itself to look at the plans of Lot 1469 only to see if there was a tracing of the Road, without considering documents related to Lot 1470 to determine if right of way was granted to the owner of Lot 1469 “by virtue” of a series or number of instruments. As a matter of principle, a right of way to a road can be granted with its location and alignment yet to be approved.
The right of way over the Road therefore satisfies the requirements of B(P)R Reg 18A(3)(a)(iv); being a street on land over which the owner of the site (i.e. Lot 1469) is expressly granted by virtue of various relevant documents a right of way exercisable at all times.
Alternative case
In the Plaintiff’s alternative case, the Plaintiff argues that the Government Lease for Lot 1469 (deemed to have been issued pursuant to s.14(1) of the Conveyancing and Property Ordinance (Cap.219)) was deemed to have included Clause 2 of GN364 (Clause 2).
Clause 2 expressly “included in [the Grant] … all the easements and appurtenances … whatsoever to the said premises …”. Among these “easements and appurtenances” was the right of way over the Road.
In other words, even if the right of way over the Road was implied by necessity (which was accepted by the Government), since the issue of deemed Government Lease it had become provided for expressly by way of Clause 2.
The Court of Appeal considered that Clause 2 is in the form of a standard catch-all provision, which amounts to an express grant of all the “easement” and “appurtenances” related to the land. Therefore, when the Government Lease of 1469 was deemed issued, the right of way (even if it was an implied one when created) was included as an easement under Clause 2 and expressly granted thereunder.
The right of way over the Road would also satisfy the requirements of B(P)R Reg 18A(3)(a)(iv) under the Plaintiff’s alternative case.
Welcome judgment
The Court of Appeal judgment in Leading Well clarifies the proper construction of B(P)R reg. 18A(3)(a)(iv), suggesting it is not the end of the story even if no single document or instrument bears the written words that “a right of way” was granted.
Instead, courts may consider all relevant documents independently and in tandem in context to yield a reading which satisfies the requirements under B(P)R reg. 18A(3)(a)(iv).
This appeal judgment brings a broader interpretation of B(P)R reg. 18A(3)(a)(iv) and should be welcomed by developers and investors in maximizing the (re)development potential and value of their land.
