COURT OF FINAL APPEAL, HKSAR
JUSTICE KEMAL BOKHARY PJ
JUSTICE PATRICK CHAN PJ
JUSTICE R.A.V. RIBEIRO PJ
JUSTICE BARRY MORTIMER NPJ
LORD MILLETT NPJ
30 OCTOBER 2009
Justice Bokhary PJ
I agree with Lord Millett NPJ’s judgment in its entirety. My contribution, which is in harmony with his judgment, is limited to two matters. The first is s.16(1)(g) of the Buildings Ordinance, Cap. 123. And the second is the nature of the common law of Hong Kong.
Section 16(1)(g) was discussed in the course of the argument. And I consider it helpful to say a word about it. I of course do so without prejudging anything that has yet to be decided.
By s.16(1)(g) it is provided that the Building Authority may refuse to give his approval of any plans of building works where the carrying out of the building works shown thereon would result in a building differing in height, design, type or intended use from buildings in the immediate neighbourhood or previously existing on the same site. Over the years, the Building Appeal Tribunal has often spoken of incongruity when discussing s.16(1)(g)’s application. Incongruity is not a word which appears in s.16(1)(g). It simply provides a convenient way in which to refer to such difference in height, design, type or intended use as provides grounds for disapproval under s.16(1)(g).
So far the tallest building in the immediate neighbourhood in the present case is a 16-storey building among 4 and 5-storey buildings. One of these proposals is for two 39-storey buildings while the other is for a 40-storey building. The tribunal thought that the presence of the existing 16-storey building precluded s.16(1)(g) disapprovals of these 39 and 40-storey proposals. One statement was quoted by the tribunal from the article by Mr Kemal Bokhary QC (as I then was) Section 16(1)(g) .... A Shooters’ Guide (1989) 19 HKLJ 314. It is the statement (at p.319) that “[t]he mere fact that a proposed building would differ in height from buildings in the immediate neighbourhood has never been regarded by the tribunal as a proper basis for rejection”. That statement is to be read in the context of what is said on the next two pages of the article about the tribunal’s decisions in the No.12 Bowen Road Case (3 July 1985) and the No.2A Mount Davis Road Case (10 December 1980).
No.12 Bowen Road is the site concerned in Attorney General v Mightystream Ltd  1 WLR 980, a decision of the Privy Council cited to this Court in the present case. And the No.12 Bowen Road Case arose when the Building Authority, having lost in the Privy Council, played his last (and unsuccessful) card, namely disapproval under s.16(1)(g). By then the No.12 Bowen Road proposal was for a 31-storey building. In contending – successfully – that such a building would not result in incongruity, the developer was able to point to three existing high-rise buildings in the immediate neighbourhood : two of 17 storeys and one of 24 storeys.
In the No.2A Mount Davis Road Case the existing buildings in the immediate neighbourhood were mainly of about 4 storeys with the tallest one rising to 12 storeys. The proposal was for a 42-storey building. It was disapproved under s.16(1)(g). The tribunal affirmed this disapproval. In the course of doing so, the tribunal said that to avoid possible misunderstanding in the future it felt that it should place on record that it did not necessarily consider that even a 20-storey building would be appropriate in that immediate neighbourhood.
Finally on s.16(1)(g), it should be mentioned that the article includes statements as to the town planning purposes for which it may be possible to use s.16(1)(g) or at least which it may not be fatal for the Building Authority to have at the back of his mind when invoking s.16(1)(g) in cases within its objective limits. Nothing more need be said about any of that at the moment.
Nature of the common law of Hong Kong
The emergence of a common law of Hong Kong can be traced to almost the earliest stage of British rule here. By s.3 of the Supreme Court Ordinance 1844 and later s.5 of the Supreme Court Ordinance 1873, the Hong Kong courts were empowered and required to apply English common law except where the same was “inapplicable to the local circumstances of [Hong Kong] or of its inhabitants”. One of the things which that exception did was to leave some room in certain spheres for ethnic Chinese domiciled in Hong Kong to resort to the laws and customs of traditional China, and some such room remains to the present day. Another consequence of the exception is that the Hong Kong courts had to develop what amounted to a common law of Hong Kong even though it was for the most part identical to English common law.
That Hong Kong appeals lay ultimately to the Privy Council did not hinder, rather did it assist, the proper development of Hong Kong common law. As befits a court of last resort which once exercised a jurisdiction covering a quarter of the world, the Privy Council always accorded the respect due to local habits and conditions. There are many illustrations of that. One is a Privy Council decision referred to in the course of the argument, namely Padman v Hanwanta AIR 1915 PC 111 (an Indian appeal from the Chief Court of the Punjab). Delivering their Lordships’ advice in the earlier case of Welch v Phillips  1 Moo PC 299 (an English appeal from the Prerogative Court of Canterbury), Parke B had said (at p.302) that “the rule of the law of evidence [is] that if a Will, traced to the possession of the deceased, and last seen there, is not forthcoming on his death, it is presumed to have been destroyed by himself”. Much stress was laid on that by the appellant in Padman’s case. But in delivering their Lordships’ advice in Padman’s case, Mr Ameer Ali said (at p.112, 2nd column) that “[i]n view of the habits and conditions of the people of India this rule of law, if it can be so called, must be applied with considerable caution.”
What the Hong Kong courts had been doing to develop Hong Kong common law was not altered in any practical sense by the enactment in 1966 of the Application of English Law Ordinance, Cap. 88 (which remained in force until the handover on 1 July 1997). Section 3 of that Ordinance provided for the application to Hong Kong of English common law so far as it may be applicable to “the circumstances of Hong Kong or its inhabitants and subject to such modifications thereto as such circumstances may require”. The courts of Hong Kong continued to develop the common law of Hong Kong through what had always amounted in reality to a modified application of English common law.
By art.8 thereof, our constitution the Basic Law maintains our common law (save of course to the extent that it may be adjudged unconstitutional or altered by local legislation). And since the handover on 1 July 1997, our courts’ development of our common law has been carried out under the “one country, two systems principle” with this Court at the apex of the judicial hierarchy. Not surprisingly, the development of our common law has been on the increase since the handover. But that is not to forget what we have gained – and continue to gain – from English common law, which has been described by a distinguished American jurist as “the grand reservoir of all our jurisprudence”. So spoke Story J, sitting as a Circuit Justice, in United States v Wonson 28 F Cas 745 (1812) at p.750.
As to the doctrine of precedent in Hong Kong today, it is fully covered by the judgment which Chief Justice Li gave – and with which the other members of this Court agreed – in Solicitor (24/07) v Law Society (2008) 11 HKCFAR 117.
Justice Chan PJ
I agree with the judgment of Lord Millett NPJ.
Justice Ribeiro PJ
I agree with the judgment of Lord Millett NPJ.
Justice Mortimer NPJ
I agree with the judgment of Lord Millett NPJ.
Lord Millett NPJ
Two questions of general public importance arise in these conjoined appeals. The first question, which has been described as “the Tai Hang Road access issue”, is whether it was open to the Building Authority (“the Authority”) to reject the Appellants’ development plans on the ground that the danger to traffic using or expected to use Wang Fung Road at the junction with Tai Hang Road would be exacerbated by the significant increase in the volume of traffic using the junction if either development were permitted. This turns on the true construction of s.16(1)(h) of the Buildings Ordinance, Cap 123 (“the Ordinance”). The issue arises in both appeals and raises a pure question of law; the facts are not in dispute.
The second question, which has been described as “the right of way issue”, is whether the fiction of lost modern grant, which has been described as the most common basis for a prescriptive claim to an easement in England, has any significant application in Hong Kong. The question is whether the supposed rule of English Law that the doctrine of lost modern grant does not apply as between leaseholders holding under a common landlord represents or should continue to represent the law of Hong Kong. It arises only in the appeal of Sun Honest Development Limited (“Sun Honest”).
The proceedings below
The appeals concern two properties in a residential area known as Wang Fung Terrace. With only one exception all the buildings in Wang Fung Terrace are of relatively low rise, none being more than 5 storeys high. The exception is No. 6 Wang Fung Terrace, which is 16 storeys high. The two properties with which these appeals are concerned are Nos 11 and 12 Wang Fung Terrace which China Field Limited (“China Field”) wishes to redevelop by constructing two new 39 storey buildings, and Nos 4 and 4A-D Wang Fung Terrace which Sun Honest wishes to redevelop by constructing a new 40 storey building. The proposed developments would increase the number of flats on the two sites from 43 to 231 and the number of flats on Wang Fung Terrace from 214 to 402. Either development would significantly increase the volume of traffic using Wang Fung Road and the junction with Tai Hang Road.
The developers duly submitted their respective building plans to the Authority for approval under s.16(1) of the Ordinance. The Authority rejected them. In each case it did so under s.16(1)(g) of the Ordinance (incongruity with the immediate neighbourhood) and s.16(1)(h) (giving rise to the Tai Hang Road access issue). Sun Honest’s application was also refused under s.16 (1)(d) of the Ordinance on the ground that the building plans exceeded the permitted plot ratio. In calculating the plot ratio, the Authority deducted an area of land which it found to be subject to rights of way acquired by the application of the doctrine of lost modern grant (giving rise to the right of way issue).
The developers appealed to the Appeal Tribunal (Buildings) (“the Tribunal”). The appeals were heard together. The Tribunal allowed both appeals under s.16(1)(g), dismissed both appeals in relation to the Tai Hang Road issue, and dismissed Sun Honest’s appeal in relation to the right of way issue.
The developers applied for judicial review of the Tribunal’s decision to dismiss their appeals. The applications, which were again heard together, came before Saunders J in May 2007 and were dismissed by him in July 2007.
The developers appealed to the Court of Appeal (Le Pichon and Cheung JJA and Hartmann J) which unanimously dismissed the appeals on the 16 August 2008. The Authority was a party to the proceedings at first instance and in the Court of Appeal, where it served a Respondent’s Notice, and argued in both courts that the Tribunal ought to have upheld its decision to reject the developments under s.16(1)(g). The developers objected that this argument was not open to the Authority as it had not brought proceedings for judicial review. Since the dismissal of the developers’ applications for judicial review entailed the rejection of their building plans in any event, neither court found it necessary to consider whether they should also have been rejected under s.16(1)(g) or whether the Authority was entitled to challenge the decision on this ground without first obtaining leave to apply for judicial review.
(1) THE TAI HANG ROAD ACCESS ISSUE
Wang Fung Terrace is situate on an elevated, elongated finger of land running from north to south, which is surrounded on the West and North sides by Tai Hang Road, on the South side by a steep bank of undeveloped Government land, and on the south side abutting but without access to other residential land. The only access to Wang Fung Terrace is from Tai Hang Road which runs along its western side. To reach it when travelling south along Tai Hang Road, it is necessary to make a very sharp left turn into Wang Fung Road. Wang Fung Road itself is steep and narrow and runs in a northerly direction, virtually doubling back along the same stretch of Tai Hang Road but at a higher elevation. The comparatively short section of the road from the junction with Tai Hang Road uphill to the midpoint of the 180ş hairpin bend is on Government land but is subject to a right of way in favour of the owners of Wang Fung Terrace. From that point, the road doubles back and runs in a southerly direction along the western side of the promontory past Nos 4 and 4 A-D until it eventually reaches the northwestern corner of No. 11 where it terminates.
The building plan for the development of Nos 11 and 12 shows that the property will have direct access to Wang Fung Road. The building plan for the development of Nos 4 and 4 A-D shows that the property will not have direct access to Wang Fung Road, but to a pre-existing paved lane (“the lane”) which feeds into Wang Fung Road. The lane lies between the site and an adjacent property and at right angles to Wang Fung Road, which continues past the property for a considerable distance. It is 18 feet wide, half its width lying within the development site and half belonging to the adjacent property.
Wang Fung Road and the junction with Tai Hang Road
Wang Fung Road is an unsatisfactory road in many respects. It is very narrow. It has no footpath for pedestrians. It has a hairpin bend that is too narrow for cars travelling in opposite directions to navigate simultaneously. The fall in Wang Fung Terrace towards Tai Hang Road also means that there is poor visibility at the hairpin bend. The junction with Tai Hang Road also has numerous problems. It affords poor visibility for vehicles joining Tai Hang Road. This is because of the steep gradient from the upper area of Wang Fung Terrace to Tai Hang Road and the fact that a short distance to the north of the junction Tai Hang Road bends sharply. Most seriously, Wang Fung Road joins Tai Hang Road at an acute angle, which means that southbound traffic on Tai Hang Road would usually have to execute a three point turn in order to enter Wang Fung Road.
Despite these shortcomings, the evidence which the Tribunal accepted was that Wang Fung Road itself is not dangerous or likely to be made dangerous by the increased volume of traffic due to the developments except at the junction with Tai Hang Road, where it would aggravate an already dangerous situation.
The Building Ordinance
So far as material s.16(1) of the Ordinance provides as follows:
Grounds on which approval or consent may be refused
The application of s.16(1)(h)
In applying s.16(1)(h) it is necessary to identify both the relevant street and the place where access to the development site opens onto the street. The Authority identified Tai Hang Road as the relevant street, but from an early stage in the proceedings it has been common ground that the relevant street is Wang Fung Road. It is not suggested, and there is no evidence, that the increased traffic generated by either development is likely to cause or exacerbate danger or inconvenience to traffic at the place where access is to be provided to Wang Fung Road from either site, or at any part of Wang Fung Road except at the junction with Tai Hang Road. The Tribunal and the courts below held that this was sufficient ground to reject the development plans under s.16(1)(h).
In doing so they followed the decision of Mayo J in Circumwealth Co. Ltd v AG  2 HKLR 193. He held that it was not necessary for the danger or inconvenience to traffic using or likely to use the street to arise in the immediate vicinity of the point of access to the development site. In that case the distance between the point of access and the place where danger or inconvenience to traffic was apprehended was some 11 metres, and the judge held that this was “sufficiently proximate”. In fact there is some reason for thinking that the decision to reject the building plan could have been upheld on the ground, which was not argued, that the manner in which access was gained to the site from the street caused danger or inconvenience at the actual point of access.
I agree with the decision in that case that the danger or inconvenience to traffic using the relevant street need not be located in the immediate vicinity of the point of access to the street. I also agree with the Judge and the Court of Appeal in the present case that the test of “proximity” which is to be applied is not spatial but causal. As Chung J put it in Sun Honest Development Ltd v Appeal Tribunal (Buildings)  3 HKC 652, 661-663, the relevant test is “direct causal connection”. Where I part company with the Tribunal and the Courts below is in the relevance of the causal link which they identified.
They correctly attributed the danger at the junction of Wang Fung Road with Tai Hang Road to the increase in the volume of traffic using the junction which would result from the increased density of occupation of the sites if the developments were permitted. Close analysis of the text of s.16(1)(h), however, shows that this is not a relevant cause.
The Authority’s function under s.16(1) is limited to approving or refusing approval of any plans of “building works”. The “building works” referred to at the beginning of paragraph (h) must be the same building works, that is to say, the building works shown on the plans submitted for approval. The next words show that those building works must include the construction, formation or laying out of a means of access or other opening to or from a street. So far, those conditions are satisfied, at least in the case of Nos 11 and 12 Wang Fung Terrace, where the building works involve the construction of an access way opening directly onto Wang Fung Road, though perhaps more doubtfully in the case of Nos 4 and 4 A-D, where the access way opens onto the lane. But the Authority would not be entitled to reject building plans which involved the addition of further floors above an existing building but no alteration to the existing access to the street, because the building works would not involve the construction, formation or laying out of any means of access but only the use of an existing one. The fact that the massive increase in the volume of traffic using the street would cause danger or inconvenience to traffic even in the immediate vicinity of the site would not be sufficient.
The critical condition in the present case is contained in the concluding words of the paragraph: “and the place at or manner in which such means of access or other opening opens on to the street is, in [the Authority’s] opinion, such as to be dangerous or likely to be dangerous or prejudicial to the safety or convenience of traffic using the street, or which may be expected to use the same.” (my emphasis)
It may readily be accepted that the danger or inconvenience may, at least theoretically, occur at any part of the relevant street however distant from the access point or opening involved in the building works. As Le Pichon JA observed, it is legitimate to consider the safety or convenience of traffic using or expected to use “the street”, and this means any part of the street. This is only another way of expressing the point that the necessary connection is causal and not spatial. But it is not sufficient that the danger is caused by the development generally or by the increased density of occupation of the site, as is demonstrated by the example in para.32 above. It must be attributable to “the place at or manner in which” the proposed means of access or other opening involved in the building works opens onto the street.
“The place at which” the means of access or other opening opens onto the street requires the Authority to consider “where” it opens onto the street, and “the manner in which” requires it to consider “how” it does so. Both refer to the physical features of the proposed works. “Where” directs attention to the location of the means of access or other opening to the street. If, for example, it is located at a blind corner, this would entitle the Authority to reject the building plan. “How” would cover such features as seem to have been present (though not relied on) in Circumwealth Co. Ltd v AG, where the works involved the creation of a car lift to give access to the street, the use of which might be expected to cause long tailbacks on the street.
Le Pichon JA reached her conclusion by giving paragraph (h) what she called “a purposive construction”. There can be no quarrel with the principle that statutory provisions should be given a purposive interpretation, but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of it context and the statutory purpose, is incapable of bearing: see HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574. Le Pichon JA took the statutory purpose to be the avoidance of danger or inconvenience to traffic entering or leaving the main road system of Hong Kong, when the language and context or the paragraph indicate a much narrower purpose, namely to permit the rejection of approval of building works involving the construction of a means of access to or from the street which, for particular and specified reasons, is likely to cause danger or inconvenience to traffic on the street.
In my judgment in both cases the Tribunal and the courts below erred in law by taking into account the impact of the increase volume of traffic at the junction between Wang Fung Road and Tai Hang Road when this is not attributable to the place at which or the manner in which the means of access to either site is gained from Wang Fung Road. In addition, in the case of Nos 4 and 4 A-D Wang Fung Terrace, the Authority and the courts below may have erred in treating access to the site from Wang Fung Road as located at the opening to the lane. Since the development of the site did not involve any works to the lane, this could be correct only if the lane formed part of Wang Fung Road, which it does not appear to do.
In my view, both appellants succeed on the Tai Hang Road Access Issue and are entitled to have the Tribunal’s decision thereon quashed. As no other issue arises on China Field’s appeal, I would allow its appeal and remit its case to the Tribunal for a re-hearing. It will be for the Authority to consider whether it wishes to invite the Tribunal to reconsider its decision under s.16(1)(g) and for the Tribunal to consider whether to do so. Should it become necessary, it will be open to the Authority at an appropriate stage to apply for leave to bring proceedings for judicial review. I would express no view on the approach the court should take to such an application, save to say that, in the light of the way in which the proceedings have been conducted hitherto, it would be strange if the application were dismissed merely on the ground that it was out of time.
(2) The right of way issue
The Authority rejected Sun Honest’s building plans in respect of the development of Nos 4 and 4A-D Wang Fung Terrace under s.16(1)(d) of the Ordinance on the ground that the proposed development exceeded the permitted plot ratio. In calculating the plot ratio of the proposed development it deducted an area of land consisting of the one half of the lane which lies within the site on the ground that it was subject to rights of way in favour of the owners and occupiers of the adjacent building abutting the lane to the north and other neighbouring buildings.
The Authority found that the rights of way over the lane had been acquired by lost modern grant, and the question is whether this doctrine is generally applicable in Hong Kong or is precluded almost everywhere by a long-standing rule of English law that it does not apply as between leaseholders holding under a common landlord. If this represents or continues to represent the law of Hong Kong then the doctrine of lost modern grant has no significant application in Hong Kong. With the sole exception of the Anglican Cathedral, all land in Hong Kong is either owned by or ultimately held under a lease granted by a single landlord. Before 1997 this was the Crown; since 1997 it is the HKSAR Government exercising its power in relation to leases of land conferred by Articles 7 and 120 to 123 of the Basic Law.
The acquisition of easements by prescription
In England rights of way and other easements may be acquired by
implied grant (which covers inter alia ways of necessity) or
Prescription is of three kinds:
common law prescription, which is based on user since time immemorial, that is to say since the accession of Richard I to the throne of England in 1189;
prescription under the Prescription Act 1832, which is based on user for at least 20 years next before action brought; and
prescription based on the fiction of lost modern grant.
Common law prescription is for obvious reasons not applicable in Hong Kong. The Prescription Act 1832 does not (if it ever did) apply to Hong Kong after the 1 July 1997. That leaves lost modern grant as the only method by which rights of way and other easements may be acquired in Hong Kong in the absence of an actual grant, express or implied.
The acquisition of rights by prescription is based on the well settled principle that where there has been long enjoyment of a right, the right should be presumed to have a lawful origin: see Clippens Oil Co. v Edinburgh and District Water Trustees  AC 64, 69 perLord Halsbury LC quoting Lord Herschell in Philipps v Halliday  AC 228, 231. The principle has always been regarded as a beneficial one. In Dalton v Angus (1881) 6 App Cas 740, 812 Lord Blackburn, referring to the fact that the doctrine of lost modern grant is based on a legal fiction, said that the fiction was admitted into the law “for a purpose and producing a result very beneficial”. In Reg. v Oxfordshire County Council  1 AC 335, 339 Lord Hoffmann observed “Any legal system must have rules of prescription which prevent the disturbance of long-established de facto enjoyment”, though he pointed out that the principles upon which different legal systems achieve the desired result may be very different.
In my judgment it follows that careful consideration must be given to restrictive rules which prevent the acquisition of rights of way and other easements by long enjoyment before they are applied in a jurisdiction where they would have near universal effect. Historical justification is not enough. The rules must be rational, that is to say inherent either in the nature of the right in question or in the particular means of acquisition relied on, and appropriate to the jurisdiction in which it is sought to apply them.
Lost modern grant
The history of the doctrine of lost modern grant is usefully recounted in the speech of Lord Hoffmann in Reg. v Oxfordshire County Council Loc. cit. at pp 349-351, where he described the development of the three methods by which private rights of way and other easements may be acquired by prescription. As he explained, the medieval real actions for the recovery of land were subject to limitation by reference to various past events. In the time of Bracton the writ of right was limited by reference to the accession of Henry I (1100). The date was brought forward by successive statutes and ultimately fixed by the Statute of Westminster I 1275 (3 Edw. 1, c. 39) by reference to the accession of Richard I in 1189, that is to say 86 years previously. The judges used this date by analogy to fix the period of use and enjoyment since time immemorial required by the common law for the acquisition of rights of way and other easements.
As time passed, the absence of evidence usually made actual proof of use and enjoyment since 1189 impossible, though juries were instructed that it might be inferred. After the Limitation Act 1623 (21 Jac. 1, c. 16), which fixed a 20 year period of limitation for actions to recover land, the judges appreciated that it was anomalous to require a longer period of enjoyment for the acquisition of a right of way or other easement over the servient land than was required (in effect) to acquire a possessory title to the servient land itself. One solution might have been to abandon the requirement that enjoyment must be since time immemorial and simply substitute a period of enjoyment for 20 years; but they did not do so. Instead they treated 20 years’ enjoyment as giving rise to a presumption of enjoyment since 1189. But this presumption could easily be rebutted by showing that that right could not have existed in 1189; for example, because it was appurtenant to a building which had been erected since that date.
By 1761 the judges had overcome this obstacle by recourse to a different presumption, this time of a grant made in modern times, that is to say after 1189 but before the period of enjoyment relied on, and which had since been lost. But they did not discard common law prescription based on user since 1189, which in England still maintains a shadowy existence alongside its younger and more vigorous sibling. Recounting the history of lost modern grant in Bryant v Foot (1867) L.R. 2 Q.B. 161, 181 Cockburn CJ (who clearly did not like it) said:
Juries were first told that from user, during living memory, or even during 20 years, they might presume a lost grant or deed; next they were recommended to make such presumption; and lastly, as the final consummation of judicial legislation, it was held that a jury should be told, not only that they might, but also that they were bound to presume the existence of such a lost grant, although neither judge nor jury, nor any one else, had the shadow of a belief that any such instrument had ever really existed.
For a long time the doctrine was controversial. Many judges disliked fictions, however beneficial, and were unwilling to extend them to situations not covered by previous authority. Others regarded the adoption of the doctrine as amounting to judicial legislation, a view with which Lord Blackburn did not disagree, though he considered it an insufficient reason to dispense with a doctrine which was productive of such beneficial results: In Dalton v Angus loc. cit. But the doctrine was considered in depth and approved by the House of Lords in Dalton v Angus supra and is now beyond question. Some restrictive rules, however, survive as a relic of the judges’ former reluctance to direct juries to find, on their oath, a state of affairs in which they did not believe.
Despite what was said by Cockburn CJ in Dalton v Angus supra, it was for a long time far from clear that the court was bound, and not merely entitled, to presume the grant from long enjoyment for the requisite period. The law was not settled even as late as 1893: see Wheaton v Maple & Co.  3 Ch 48 CA where all three members of the Court of Appeal dismissed a claim to an easement by lost modern grant because there was no evidence to support a grant. Lindley LJ found as fact that no grant had been made, Lopes LJ rested his decision on the improbability of any grant, and A.L. Smith LJ held that there were no facts from which a grant could be inferred. None of these grounds for rejecting the claim would be accepted today. It is now firmly established that evidence that no grant was in fact made is inadmissible: see Tehidy Minerals Ltd v Norman  2 QB 528, 552. The presumption cannot be rebutted even by an admission by the claimant that there was no grant. It can be rebutted only by proof that throughout the period of user relied on the servient owner was incapable of making the grant, as in Barker v Richardson 4 B. & A. 579, Rochdale v Radcliffe (1852) 18 QB 287 (where the owner of the servient land was a corporation with limited powers of grant) and Neaverson v Peterborough RDC  1 Ch 557 CA (where the grant would have been illegal).
Rules which defeat the application of the doctrine
It is a fundamental principle of law that a man cannot have an easement or other servitude over his own land. This is inherent in the very concept of servitudes, and is beyond question.
The rule that the doctrine of lost modern grant does not apply as between leaseholders holding under a common landlord, however, is not a fundamental principle inherent in the nature of servitudes. It applies only to the acquisition of easements by prescription. An express or implied grant may be made in such circumstances (and both in England and Hong Kong often is) and it is not easy to see why, if a grant can be made expressly, it cannot be presumed. The rule seems to be a special instance of a more general rule which prevents the doctrine of lost modern grant from applying as between leaseholders even when they hold under different landlords. Both rules are supported by the authority of some of the greatest common law judges of the past. Despite this, both rules have been strongly criticised, and neither has been considered by the House of Lords for well over a hundred years.
The fee simple rule
The first and more general rule is that in order to acquire an easement by any form of prescription, including lost modern grant, the user must be by or on behalf of the owner in fee simple against an owner in fee simple (or to put it more accurately in historical terms, by or on behalf of the owner of an estate of inheritance against the owner of an estate of inheritance). As a consequence the presumed grant must be a grant in fee simple. This rule has effect even where the dominant and servient tenements are occupied by lessees holding under leases from different landlords. It has nothing to do with the fundamental principle that a man cannot have an easement or other servitude over his own land.
The effect of the rule is that a claim, even by a freeholder, to an easement by lost modern grant must fail if user can be proved only during a time when the servient tenement was let. This is because throughout the period of user relied on the tenant of the servient tenement lacked capacity to make a grant in fee simple, while a grant by prescription will not be presumed against a reversioner who is not in possession of the land and may neither know of the user nor be able to prevent it: see Daniel v North (1809) 11 East 372.
A rule that no right of way or other easement may be acquired by prescription whenever either tenement was let would have a most serious effect in Hong Kong. It would mean that no such right could be acquired by long enjoyment over any land except the Anglican Cathedral.
The rule is both counter-intuitive and contrary to the policy of the law. It is counter-intuitive because it is difficult to see why it should be impossible to presume a lost grant of an easement by or to a lessee for the term of his lease when such a grant may be made expressly. The grant cannot prejudice the reversion to the servient land, for the right granted must expire with the term of the grantor’s lease; and user during the currency of the lease will not bind the reversion unless the reversioner knew of and acquiesced in it. It is contrary to the policy of the law, for if the disturbance of long established de facto enjoyment of a right is contrary to legal policy, then this is equally the case whether the enjoyment is by or against a freeholder or a leaseholder.
Until the publication of an article by V.T.H. Delany in 1958 (74 LQR 82) English textbooks on the law of real property were unanimous that in order to establish an easement by prescription, whether by common law prescription, under the Prescription Act, or under the doctrine of lost modern grant, the right must be claimed in favour of the freehold estate against the owner of a freehold estate. According to Cheshire 7th Ed. (1954) p.491:
An easement may be granted expressly for a lesser interest than a fee simple, but it cannot arise by virtue of a presumed grant.
But why not? No convincing answer has ever been given. It may be so as a matter of authority, but not as a matter of principle. According to Megarry & Wade, The Law of Real Property 7th Ed. (2008) p.1270:
There seems nothing in principle that necessarily excludes a lost modern grant by or to a person owning less than a fee simple.
Since the publication of Delany’s article the rule has come under both academic and judicial criticism. It has also been criticised in every succeeding edition of Megarry & Wade’s Law of Real Property since 1959.
The theory of prescription does not deal properly with cases where the servient land is in the hands of a limited owner. It seems irrational to allow prescription against land if occupied by an owner in fee simple but not if occupied under a 999-year lease, for example.
Or, one might add, in Hong Kong under a Government lease for 99 years, particularly where virtually every property in the region other than Government land is similarly occupied.
The haphazard consequences of the rule were described in Simmons v Dobson  1 WLR 720 CA per Fox LJ at p.724:
.... it is difficult to see if one were starting from scratch that there is serious objection to leaseholders prescribing against each other for the duration of their limited interests .... In a modern, urban situation it is hard to see why two householders on one side of the street should be able to prescribe for easements against each other’s land because each holds in fee simple while on the other side of the street one leaseholder under the residue of a 999-year lease can for 20 years or more walk along a path at the back of his neighbour’s garden (also held on a long lease) without acquiring any rights in respect thereof. That, however, is the way the law has gone in England.
Leave to appeal was refused by the House of Lords. This led one commentator (Peter Sparkes loc. cit) to observe that it was a matter for regret that the House of Lords would not have an opportunity to propound a coherent theory of prescription.
The authority on which the rule is usually based is the judgment of Parke B. in Bright v Walker (1834) 1 Cr. M. & R. 211 as applied by the Court of Appeal in Wheaton v Maple  3 Ch 48 CA. In Bright v Walker the jury negatived any grant to the plaintiff, and this made it unnecessary for the court to consider whether any such grant had been lost. The case turned entirely on the newly enacted Prescription Act. After admitting that the court (i.e. the Court of Exchequer Chamber) had considerable difficulty in coming to their conclusion on the point, Parke B. said that he thought that no prescriptive user could be acquired by a user which did not bind the freehold. Intriguingly, he said that before the Act enjoyment by a lessee would have been evidence of a lost grant, but that this was no longer the case after the Act. Unfortunately his statement is anecdotal, for no such case has ever been found. But, as Delany pointed out, Parke B misunderstood the Prescription Act. It is clear that if enjoyment by or against a lessee was sufficient to presume a grant before the Act, there was nothing in the Act which prevented it.
In Wheaton v Maple  3 Ch 48 CA the Court of Appeal unanimously refused to presume a lost modern grant on the facts, so that their observations on the limits of the doctrine, like those of Parke B. in Bright v Walker, were strictly obiter. We are concerned, however, less with authority than with principle. After finding that there had been no grant in fact, Lindley LJ proceeded:
But I am not aware of any authority for presuming, as a matter of law, a lost grant by a lessee for years in the case of ordinary easements, or a lost covenant by such a person not to interrupt in the case of light, and I am certainly not prepared to introduce another fiction to support a claim to a novel prescriptive right. The whole theory of prescription at common law is against presuming any grant or covenant not to interrupt, by or with any one except an owner in fee. A right claimed by prescription must be claimed as appendant or appurtenant to land, and not as annexed to it for a term of years .... This view of the common law is in entire accordance with Bright v Walker, where this doctrine of presumption was carefully examined.
But it was not. The subject which was examined in Bright v Walker was the Prescription Act. Moreover Lindley LJ was not being asked to introduce another fiction but to determine the limits of an existing one. Nor is it self evident that a presumed grant of a right of way or other easement for a term of years cannot be made appurtenant to the freehold when an express grant can. What the passage really demonstrates is his hostility to the legal fictions. His judgment has frequently been followed, but in my judgment Delany was right to say that no convincing reason has been advanced in any of the cases since Bright v Walker for denying the right to raise the presumption of lost modern grant by or against a lessee.
The only explanation of the fee simple rule which has been vouchsafed is contained in the passage of Lindley LJ’s judgment which I have emphasised above. It is a correct statement of the law in relation to common law prescription. Blackstone remarked on the absurdity of basing prescription on user from time immemorial for or against an estate which commenced within remembrance of time. He wrote (Point 2) that “A prescription must always be laid in him that is tenant of the fee” and (Point 5) that “nothing is claimable by this prescription, but such things as are incident, appendant, or appurtenant to lands”. But he was dealing with common law prescription, where the rule is logical, not with rights acquired by lost modern grant, where it is not.
All incorporeal hereditaments must have their origin in grant; common law prescription, no less than lost modern grant, rests upon a supposed grant. As Blackstone, Loc. cit. p.265, observed when speaking of common law prescription: “the law allows prescription only in supply of the loss of a grant, and therefore every prescription presupposes a grant to have existed”.
The question, therefore, is whether the doctrine of lost modern grant is “merely a form of common law prescription”: See Simmons v Dobson (supra) at p.725 per Fox LJ, being (Gale on Easements (18th Ed.) 202):
in reality prescription shortened by analogy to the period of limitation fixed by the Limitation Act 1623 and introduced into the law under a new name
It is therefore really a variety of prescription at common law, but it was a fairly late and distinct development and is always classified separately.
This is not correct (see Harpum loc. cit. p.222). It reflects the position between 1623, when the courts began to treat 20 years’ enjoyment as giving rise to a presumption of enjoyment since 1189, and 1761. But it does not reflect the true relationship between common law prescription and the doctrine of lost modern grant. The introduction of the presumption of lost modern grant changed everything. In both cases long enjoyment of a right gives rise to a presumption of lawful origin, and in both cases the origin consists of a presumed grant by the owner of the dominant tenement. But the grant is not the same in the two cases. In the one case the grant is presumed to have been made before 1189 and thus almost invariably before the commencement of the lease of either dominant or servient tenement; in the other it is presumed to have been made recently, quite possibly during the currency of the term of a subsisting lease. It would be all but impossible to presume a grant even in England by or to a leaseholder before 1189; no such difficulty attends a grant made in 1989.
In my judgment the rule is based on authority rather than principle, and the line of authority is deeply flawed. Statements of the rule in the leading cases are obiter andbased on the false premise that lost modern grant is merely a form of common law prescription. They cannot stand against the powerful tide of logical objection and academic criticism. The rule has been abandoned in Ireland; subject to what is said below, it should not be adopted in Hong Kong.
The common landlord rule
The second and more limited rule (that the doctrine of lost modern grant cannot apply as between leaseholders holding under a common landlord) is based on the principle that the possession of a tenant is considered to be that of his landlord. If the fee simple rule stands, then it follows that a claim by prescription cannot succeed where both dominant and servient tenements are held under a common landlord, for
if the proposition be correct that a prescriptive right of way [under section 2 of the Act] must be acquired by the owner of the fee in one of the tenements as against the owner of the fee in the other, then in this case the defendant’s contention would involve the result that the tenant of one of the tenements has acquired for his landlord a right of way over the landlord’s own land, which is impossible ....
(Kilgour v Gaddes 1 KB 457 CA at pp 460-1 per Collins MR.)
This was a case on the Prescription Act, but the reasoning is equally applicable to the acquisition of an easement by lost modern grant. The tenant of the dominant tenement cannot claim a right for and on behalf of and at the same time against his landlord: Gayford v Moffatt (1868) LR 4 Ch App 133 per Lord Cairns LC. The rule is perhaps best expressed by Holmes LJ in the Irish case of MacNaghten v Baird  2 IR 731 CA 746:
.... as it is the possession given by the landlord which makes the user possible, it cannot be relied on to establish a right against him.
But the rule is conditional on the first, as the court recognised in Kilgour v Gaddes, where Mathew LJ tested the matter by reference to the doctrine of lost modern grant, and asked:
What would the presumed grant be in such a case? It would be a grant by the owner of the fee to himself.
It is only the fee simple rule which requires that the presumed grant must be by the fee simple owner to the fee simple owner and for a fee simple estate. But for that rule, the presumed grant would be by the lessee of the servient tenement to the lessor of the dominant tenement (or his landlord) for the term of the lease of the servient tenement. There would be no question of infringing the fundamental rule that a man cannot have a servitude over his own land.
The principle that the possession of the tenant is the possession of his landlord is well established. It ensures that the benefit of any rights acquired by a tenant over neighbouring land should enure for the benefit of the reversion. The idea that it must enure for the benefit of the landlord alone and not both landlord and tenant also derives from the fee simple rule. Without that rule, such rights could properly be treated as enuring for the benefit of the tenant as well as that of the landlord. The idea that the tenant cannot be allowed to take advantage of a right granted by the landlord to acquire rights against him is based on a fallacious equation of two different rights with different origins. It is true that the tenant is only able to exercise rights over the servient tenement because he is in possession of the dominant tenement, and that his possession of the dominant tenement is with the consent of his landlord. But he does not derive the rights over the servient tenement from his landlord under his lease as part of the demised premises, nor does he acquire it with the landlord’s consent, but by a separate (albeit fictitious) grant presumed from long user against land not comprised in his lease and without his landlord’s consent.
But for the fee simple rule and the fallacy exposed above, there is no reason in principle why a right of way or other easement should not be acquired by long enjoyment on the part of a lessee of the dominant tenement against servient land held under a lease from the same landlord, provided that no prejudice is caused to the reversion in the common landlord. If the supposed grant is presumed to have been made by a lessee of the servient land, the right granted cannot endure for a term longer than that of his lease; it cannot bind the reversion. This would be bound only by a grant by the reversioner. But such a grant will not be presumed from long enjoyment of rights over the servient tenement while it is in the possession of a lessee unless the reversioner was aware of the user and in a position to prevent it.
The effect of discarding both rules can be simply stated. Where both servient and dominant tenements are in the possession of lessees holding under the same landlord, then if the lease of the servient land determines first, the right will come to an end unless the landlord can be shown to have acquiesced in the user. If the lease of the dominant tenement determines first, the right will continue to be exercisable by the common landlord against those in possession of the servient tenement for the residue of the term of the lease; but there can be no objection to this. As soon as both tenements come into the possession of the common landlord, the right will cease to exist, but it will not be needed.
Nothing in this judgment should be taken necessarily to apply to Government land, which is State land, and in respect of which we have not heard full argument. Unless such land is subject to special considerations, the abandonment of both rules would enable a lessee of adjoining land to acquire a right of way or other easement by long user against it. Such user must be as of right, that is to say not by force, stealth or licence of the owner of the dominant tenement, and must have continued without interruption for at least 20 years. Of course the right will expire when the lease of the dominant tenement comes to an end and the Government obtains possession, but in the meantime it is difficult to see why the Government should be free to disturb the long enjoyment of a right merely because it has been exercised by its lessee. Given that the Government could grant such a right expressly, there is no reason in principle why it should not be presumed to have done so if the circumstances warrant and if the special position of State land allows it.
I am satisfied that, once the fee simple rule is abandoned, the common landlord rule has no logical foundation. It is based on the premise that by assenting to his tenant’s possession of the dominant tenement the landlord has consented to the tenant’s user of rights over the servient tenement, so that the user is not “as of right”. The premise only has to be stated to be seen to be wrong.
What is the law of Hong Kong?
I have so far considered the English authorities. But the question we have to decide is not whether the rules under discussion represent the law of England, but whether they represent or should continue to represent the law of Hong Kong.
English law was first introduced into Hong Kong by the Supreme Court Ordinance 1844. This provided that:
the law of England shall be in full force in the said Colony of Hong Kong, except where the same shall be inapplicable to the local circumstances of the said Colony, or of its inhabitants: Provided nevertheless, that in all matters and questions touching the right or title to any real property in the same Colony, the law of England shall prevail ....
This was replaced by another Ordinance in 1873 which contained the same exception and which it is not necessary to consider. In 1966 this was replaced by the Application of English Law Ordinance which remained in force until the resumption of the exercise of sovereignty by China on the 1 July 1997. Section 3 provided:
The common law and the rules of equity shall be in force in Hong Kong, so far as they may be applicable to the circumstances of Hong Kong or its inhabitants and subject to such modifications thereto as such circumstances may require ....
Prior to 1 July 1997 “common law” was defined as “the common law of England”, but this was not limited by reference to any particular time. The common law as it was developed by the judges applied in Hong Kong provided that it was suited to local circumstances. This did not give Hong Kong judges a discretionary power to legislate by modifying the common law. They were required to apply English law, but a modified form of English law suited to local circumstances. On appeals to the Privy Council, the Board would defer to the views of the local courts on what was and what was not suited to the circumstances of Hong Kong.
On 1 July 1997 the 1966 Ordinance ceased to apply in Hong Kong as being contrary to the Basic Law. But the continuity of existing laws was of fundamental importance in the establishment of the Hong Kong Special Administrative Region under the principle of “one country two systems” and constituted a vital element of the Joint Declaration and the Basic Law. Article 8 of the Basic Law provides:
The laws previously in force in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary law shall be maintained, except for any that contravene this law, and subject to any amendment by the legislature of the Hong Kong Special Administrative Region.
Section 3 of the Interpretation and General Clauses Ordinance now defines “the common law” as “the common law in force in Hong Kong”.
The disappearance of any reference to local circumstances and the modification of English law was an inevitable consequence of the resumption by China of the exercise of sovereignty over Hong Kong. But it should not inhibit the courts of Hong Kong, and in particular this Court which has succeeded the Privy Council as the final appellate court of Hong Kong, from developing the common law in the context of Hong Kong. The language of the 1966 Ordinance was appropriate when Hong Kong was a British colony and Hong Kong judges were obliged to apply an occasionally modified version of English law. This is no longer the case. Just as Australian and New Zealand judges apply and develop their own versions of the common law, so in future our judges must develop the common law of Hong Kong to suit the circumstances of Hong Kong. It is well recognised that the common law is no longer monolithic but may evolve differently in the various common law jurisdictions.
The status of English and other common law decisions as binding precedents in Hong Kong was authoritatively set out by Li CJ in this Court in Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117 at pp 130-134. The effect of that case may be shortly stated. Decisions of the Privy Council on Hong Kong appeals before the 1 July 1997 remain binding on the courts of Hong Kong. This accords with the principle of continuity of the legal system enshrined in Article 8 of the Basic Law. Decisions of the Privy Council on non-Hong Kong appeals are of persuasive authority only. Such decisions were not binding on the courts in Hong Kong under the doctrine of precedent before the 1 July 1997 and are not binding today. Decisions of the House of Lords before the 1 July 1997 stand in a similar position. It is of the greatest importance that the courts of Hong Kong should derive assistance from overseas jurisprudence, particularly from the final appellate courts of other common law jurisdictions. This is recognised by Article 84 of the Basic Law.
In that case the Chief Justice made it clear that this Court has the power to depart from previous decisions of the Privy Council on appeals from Hong Kong and its own previous decisions, but observed:
The doctrine of precedent is a fundamental feature of our legal system based on the common law. It gives the necessary degree of certainty to the law and provides reasonable predictability and consistency to its application. Such certainty, predictability and consistency provide the foundation for the conduct of activities and the conclusion of business and commercial transactions. But at the same time, a rigid and inflexible adherence by this Court to the previous precedents of Privy Council decisions on appeal from Hong Kong and its own decisions may unduly inhibit the proper development of the law and may cause injustice in individual cases. The great strength of the common law lies in its capacity to develop to meet the changing needs and circumstances of the society in which it functions ....
On the resumption of the exercise of sovereignty by China the Privy Council ceased to be the final appellate court of Hong Kong and its place was taken by this Court. The jurisdiction to ascertain, declare and develop the common law of Hong Kong formerly exercisable by the Privy Council is now exercisable by this Court. It will continue to respect and have regard to decisions of the English courts, but it will decline to adopt them not only when it considers their reasoning to be unsound or contrary to principle or unsuitable for the circumstances of Hong Kong, but also when it considers that the law of Hong Kong should be developed on different lines.
The disturbance of settled titles
In developing the law, the courts must always be mindful of the need to avoid disturbing settled laws on which people have relied when arranging their business or other affairs. Sun Honest has urged us not to depart from the rules which limit and virtually defeat the application of the doctrine of lost modern grant in Hong Kong. This would, it is said, disturb settled titles. Any landowner who sought legal advice would be told that there was no need to stop his neighbour from exercising a right of way or other easement over his land, because however long he did so his user would not mature into a legal right.
There are, I think, two answers to this. In the first place, it can hardly be said that the law of Hong Kong was ever firmly settled in the sense for which Sun Honest contends. In a case (see Belilios v Ng Li Shi (Fielding Clarke CJ)  HKLR 202 (Supplementary Note)) at first instance decided in 1893 but not reported until 1969 the common landlord rule was assumed to apply in Hong Kong, but the question was whether the doctrine of lost modern grant applied at all in Hong Kong, not whether it applied shorn of the restrictions which limited its application. In another case (see Foo Kam Shing v Local Printing Press Ltd  HKLR 192 (Williams J) and  HKLR 201 (Full Court)) it was argued that a right to light had been acquired under the Prescription Act or by express or implied grant, but not by lost modern grant. On an interlocutory application in 1989 Godfrey J held that it was arguable that the Prescription Act could be applied as between Crown lessees (see Pang Kwan Lung v Ma Choi Hop  2 HKC 449). In 1992 (in Tang Tim-fat v Chan Fok-kei  HKLRD 373 per DHCJ Jerome Chan) a Deputy High Court Judge expressed the view that the common landlord rule prevented the application of the doctrine of lost modern grant, but this was obiter as counsel had expressly abandoned any reliance on the doctrine. In 1997 (in Chung Yeung Hung v Law Man Nga  HKLRD 1022) the Court of Appeal (Mortimer and Godfrey JJA) held that it was arguable that the system of land tenure in Hong Kong made it possible for a limited owner to acquire an easement by prescription against another limited owner. In a recent case (i.e. Kong Sau Ching v Kong Pak Yan  1 HKC 119 per Reyes J) the judge upheld a right of way over Government land based on acquiescence, but added that if he had not found acquiescence he would have been prepared to find that the right had been established by prescription. See also the subsequent cases of Chan Tin Yau v Tsang Kwok Kay  5 HKLRD 26, 32 and Wan Yuk Wing v Wong Kwok Hing Patrick  5 HKLRD 143, 153.
In the second place, the test does not depend on the view which an assiduous reader might derive from the law reports, but on what ordinary people may reasonably expect the law to be. The idea that long de facto and peaceful enjoyment of a right over another’s land is no doubt based on public policy, but it also accords with people’s reasonable expectations. There is no reason to think that landowners in Hong Kong have refrained from disturbing their neighbours’ enjoyment of a right over their land because of their belief that such enjoyment, however long continued, could never mature into a legally enforceable right. Rather the boot is on the other foot. People who openly and peaceably exercise a right over their neighbour’s land for more than 20 years without interruption surely expect to be allowed to continue to do so and may have made their arrangements accordingly.
There is a growing antipathy to the acquisition of legal rights by prescription or adverse possession, and it may be that, if and when Hong Kong moves to a comprehensive system of land registration, the acquisition of such rights by prescription will disappear. If so, this will have to be achieved by legislation. In the meantime, we must take the law as we find it, and seek to ensure that it is just, logical, coherent and meets the reasonable expectations of ordinary people.
I doubt whether either of the two rules under discussion would be upheld in England were they to be examined by the House of Lords. But that is not a question which we have to decide. We are called upon only to consider whether they represent or should continue to represent the law of Hong Kong. I am satisfied that they should not. A coherent system of prescription demands that, if an easement over land can be acquired by express or implied grant, it should be capable of being acquired by the fiction of lost modern grant (see Bakewell Management Ltd v Brandwood  2 AC 519), without being affected by restrictions wrongly imported from common law prescription (which never applied in Hong Kong) or based on a false premise.
It is accordingly my view that Sun Honest fails on the right of way issue and I would therefore dismiss its appeal.
Justice Bokhary PJ
The Court is unanimous. China Field’s appeal is allowed, and its case is remitted to the Building Appeal Tribunal for rehearing. Sun Honest’s appeal is dismissed. The costs here and below in both appeals will be dealt with on written submissions in respect of which the parties should seek procedural directions from the Registrar.
5 JANUARY 2010
Judgment On Costs
Justice Ribeiro PJ
On 30 October 2009, the Court handed down its judgment in this appeal. China Field’s appeal, which turned on the construction of section 16(1)(h) of the Buildings Ordinance, was allowed. Sun Honest’s appeal was dismissed on the basis that the Building Authority’s refusal to approve its building plans, applying the doctrine of lost modern grant, was sound. Written submissions on costs were called for and have now been received from the two appellant companies and from the Building Authority. This is the Court’s judgment as to costs.
While the Building Authority accepts that it should pay costs to China Field, it submits that a deduction of one-third should be made to reflect China Field’s failure to convince the Court on two arguments advanced. In our view, China Field should get its costs against the Building Authority without deduction. China Field’s reliance on those arguments does not justify departing from the usual rule that costs should follow the event in the present case.
China Field seeks a certificate for three counsel in respect of the hearing before the Court of Appeal. We consider that a certificate for only two, and not three, counsel is justified. China Field’s argument that three counsel should be certified because the Building Authority was represented by three counsel before the Court of Final Appeal is rejected. China Field was only concerned with the construction of section 16(1)(h), an argument of no great complexity. The Building Authority, on the other hand, had to deal both with that question of construction and with a complex argument concerning the doctrine of lost modern grant arising on Sun Honest’s appeal.
Having lost its appeal, Sun Honest should pay the costs of the Building Authority in the Court of Final Appeal. There is equally here no justification for departing from the usual rule that costs should follow the event. Sun Honest submits that the costs of the leave applications should be separately dealt with on the basis that it had not resisted leave to appeal on the ground on which it eventually lost, but had properly resisted leave on the ground on which the Building Authority has been unsuccessful. The Court’s practice has generally been to treat the costs of leave applications (before the Court of Appeal and the Appeal Committee) as part and parcel of the costs of the appeal. There is no reason to depart from that rule in this case. Given the complexity of the argument in relation to the lost modern grant doctrine, we consider a certificate for three counsel justified in favour of the Building Authority as against Sun Honest. The costs orders made against Sun Honest in the Court of First Instance and in the Court of Appeal should remain undisturbed.
Accordingly, we make the following orders, namely:
That the Building Authority pay China Field’s costs in this Court (including the costs of its written submissions as to costs) and in the courts below, with a certificate for two counsel in the Court of Appeal, to be taxed if not agreed.
That Sun Honest pay the costs of the Building Authority in this Court (including the costs of its written submissions as to costs), with a certificate for three counsel, to be taxed if not agreed, and with the orders as to costs made by the courts below in respect of Sun Honest left undisturbed.
 See “The acquisition of easements” by Charles Harpum (a former Law Commissioner) in  Cambridge Law Journal 220 at p.221.
 per Sir Anthony Mason NPJ at para.63 of his judgment, quoting R v A (No.2)  1 AC 45 at 67G-68H per Lord Steyn. The whole passage should be carefully considered when any judge embarks upon a process of “purposive approach” to statutory construction.
 Strictly speaking, adverse possession does not confer title on the adverse possessor, but merely prevents the dispossessed owner from recovering possession. But this does not affect the anomaly.
 The earliest reported case of prescription by lost modern grant is said to be Lewis v Price in 1761, referred to in a Serjeant Williams’s note to Yard v Ford 2 Wms. Saund. 504, Ed. 1871.
 See Dalton v Angus per Cotton LJwhen the case was in the Court of Appeal. sub nom. Angus v Dalton (1878) 4 QBD 162, 186.
 It should be noted that the right would survive a surrender of the lease, since this takes effect subject to the rights of third parties: see Coke on Littleton II 337b; Doe d. Beadon v Pyke (1816) 5 M & S 146; Barrett v Morgan  2 AC 264.
 For academic criticism, see Peter Sparkes (1992) Conveyancer 167; Charles Harpum  Cambridge Law Journal 220.
 See the current edition at p.1265.
 It has been repeatedly stated that it cannot be assumed from the refusal of leave that the Appeals Committee considered the decision of the Court of Appeal to be correct.
 Commentaries on the Laws of England (15th Ed.) Book II Ch. 17 pp 264-6.
 Certainly not in Hong Kong.
 This was applied in Simmons v Dobson (supra).
 See the passage emphasised above in the judgment of Collins MR.
 See para.52 above and note 25.
 Section 3 of the Interpretation and General Clauses Ordinance 1966.
 A good example of throwing out the baby with the bathwater.
Written submissions by Mr Edward Chan SC and Mr Liu Man Kin (instructed by Messrs William Sin & So) for the appellant in FACV No. 2 of 2009
Written submissions by Mr Liu Man Kin (instructed by Messrs William Sin & So) for the appellant in FACV No. 3 of 2009
Written submissions by Mr Joseph Fok SC, Mr Mok Yeuk Chi and Mr Alexander Stock (instructed by the Department of Justice) for the Interested Party in both appeals.
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