Land Law & Conveyancing

Case Excerpts for Lecture 2

Chan Yeuk Mui v. Ng Shu Chi, [1999] 2 HKC 702

In an action for a declaration that the Plaintiff had acquired a good
possessory title to a lot owned by the Defendant, the Defendant
alleged that the lot in question was rented to a third party for rice
farming in return for some rice for many years. It was alleged that
there was all along no written tenancy agreement. In delivering
judgment, Roger JA held that a tenancy made orally would only
operate as a tenancy at will. The only exception would be for a
tenancy created for a term of 3 years or less which was at the best
rent obtainable without a premium or a fine. The learned Justice of
Appeal held on the facts of the case that “it is highly dubious if the
payment in rice could be regarded as a payment of rent in view of the
fact that there is no reference to any fixed amount. But, in any event,
the rent was clearly only minimal and could not have satisfied the
requirement that it should be the best rent which could reasonably
have been obtained”.

Chen v Another and Lord Energy Ltd [1999] 1 HKLRD 205

This is a case in respect of certificate of compliance which has caused
great concern of conveyancing lawyers for a while. The vendors
Appellants and the purchaser Respondent, entered into a provisional
agreement for the sale and purchase of a flat and car park (the
property) in Baguio Villa.

Title to Baguio Villa commenced in 1973, when a Crown Lease was
granted to the developer pursuant to the conditions of exchange
executed between the government and the developer. The conditions
of exchange included special conditions for the development and
maintenance of car parking spaces. Respondent raised two
requisitions. First, Respondent asked for a certified copy of the letter
attaching the registered car park layout plans. These plans had been

1

inter alia. Secondly. in response maintained that the requisitions were invalid. Dismissing the appeal. Respondent maintained that this requisition had not been properly answered and then wrote to Appellants stating they were awaiting answers to the outstanding requisitions and for proof that the conditions of exchange had been complied with. as it was they who were in breach. and by failing to prove by other means that the conditions of exchange had been complied with. if a vendor or developer can prove on balance of probability that all such conditions have been fully complied. The Judge held that the requisitions had not been satisfactorily answered and granted specific performance. the equitable interest under the conditions of sale is converted into a legal estate.14(3) of the CPO. that by answering that there was no certificate of compliance. This allows a developer to start selling the units in a building before the certificate of compliance is obtained. Appellants. arguing that Appellants were not entitled to terminate the agreement. whether or not the conditions have been complied is a matter of fact. it is by virtue of section 14 of CPO. Respondent then commenced an action for specific performance. First. Appellants replied that no certificate of compliance had been issued to date.registered on the basis that these plans were in accordance with the special conditions. Even if there is no certificate of compliance. Appellants replied to this that they were not prepared to supply this letter as it did not affect title. This decision was upheld by the Court of Appeal (see [1998] 2 HKLRD 751) and Appellants appealed. Second. Appellants had only shown title to an equitable estate rather than the legal estate required under the agreement. Another point worth noting is that the certificate of compliance will not be issued until an occupation permit has been issued under s. Two things are important to note here.21 of the Buildings Ordinance (Cap 123). the legal estate can also be established. Respondent asked for a certified copy of the certificate of compliance pursuant to s. 2 . the Court of Final Appeal held. Respondent did not complete on the agreed day and Appellants terminated the agreement.

C6. The vendors alleged that in the 1950s modifications of the height restriction in the Crown lease were often done informally by correspondence. The vendors were not able to provide any evidence to show the Government’s consent to the building in excess of 35 feet. although the Director of Lands had reserved the right to review the policy in the future. The respondent acted as the agent of the government in its capacity as landlord. Director of Lands [1997] 1 HKC 373 The appellant developer sought declarations and injunction against the respondent on his alleged representation with respect to a restrictive covenant in a Crown lease for No. disposition and height of any building to be erected on the lot. The appellant’s case was that it had suffered detriment in reliance on the government’s land administration policy that he would not charge a premium for granting approval under the DD & H clause. The covenant provided that the lessee should obtain the approval of the Director of Lands to the design.Polorace Investments Ltd v. 1 Homantin Hill Road. The appellant also relied on legitimate expectation. there is no room for the application of public law. By a letter the purchaser’s solicitors raised a number of requisitions as to title including a restrictive covenant of the Crown Lease in respect of the Lot whereby no building erected on the lot shall exceed 35 feet except with the consent of the Government. The Court of Appeal held inter alia that the ground of estoppel failed because matters had not yet proceeded to the stage of approval being granted under the DD & H clause. Therefore no breach of the representation or promise had occurred and there was nothing to estop. Jumbo Gold Investment Ltd v. Leung Yuen Cheong Warren [2000] 1 HKC 539 The vendors (appellants) agreed to sell to the purchaser (respondent) a flat in Block C of Repulse Bay Mansions and car-parking space No. When the Director of Public Works had approved the building plans of the blocks in excess of 35 3 . As such.

Under the terms of the agreement. The vendor appealed to the Court of Final Appeal. Liu JA dissenting) allowed the appeal of the purchaser. the risk that the Government would now take enforcement action was remote if not fanciful. (3) There was a possibility of unwaived breach of condition which gave the Government a right of re-entry. Alternatively. Yeung J accepted the vendors’ argument that there was no real risk that the Government would enforce the restriction against the owners of the Blocks. the argument that there was a real risk of enforcement in the circumstances of this case was fanciful.424 under Head 1(2)(a) of the First Schedule to the Stamp Duty Ordinance (Cap. either party was entitled to 4 . the Court of Appeal by majority (Nazareth VP and Stock J. Held: (1) The majority view of the Court of Appeal was founded on erroneous basis.117).feet and granting an occupation permit in 1955 this should be taken that a modification of the height restriction was granted. Where concrete evidence of the Government’s knowledge and attitude was difficult to ascertain. The Collector of Stamp Revenue [1997] HKLRD 1168 The taxpayer appealed upon a case stated by the Collector of Stamp Revenue the assessment by the Collector that an agreement dated 29 December 1992 (“the agreement”) was chargeable as a lease to stamp duty in the sum of $303. granted to the occupier certain rights and licences for a sum of money payable by instalments. as the Government did not enforce the height restriction against the landowners of the Blocks for 40 years or so. the appellant. After three years from the date of the agreement. Guoji Transport Co Ltd v. the court must look at the larger picture and no take a narrow approach. However. On appeal. as the legal and beneficial owner of the property. At the trial. (2) There were some evidence to support the vendors’ contention that the lease modifications were in the 1940s and 1950s done informally by correspondence.

it was impossible to infer the duration of any periodic tenancy after the three years certain. The monthly payments made by the occupier were instalments of the consideration for entering into the agreement. (2) There was no uncertainty as to the date of commencement of the occupier’s interest which took effect immediately on signing the agreement. However. upholding the assessment of stamp duty in the amount of $303. (3) Under its terms. The questions submitted for the court’s opinion were: (1) whether the agreement was chargeable with any stamp duty under the Ordinance. (5) The fact that the occupier had been granted exclusive possession 5 . and (2) if so. the agreement was neither a periodic monthly tenancy nor a tenancy for a periodic term. inter alia that: (1) The agreement provided exclusive possession of a specified part of the property to the occupier and this was indicative of a tenancy. what amount of stamp duty was chargeable. (4) In construing the terms of the agreement. HH Judge Longley of the District Court held. and the number of instalments was unrelated to the length of the tenancy and the amounts paid were to be credited to the occupier on the sale of the property. but not decisive.424. The agreement specifically provided that no tenancy was created and that the agreement was personal to the parties. It was unlikely that the payments were in the nature of rent since interest was payable on the balance not yet paid.require that the property to be sold at a price proportional to the part of the property which the occupier occupied. the duration of the appellant’s reversionary interest (ie the remaining term of the government lease) provided the maximum term so as to satisfy the technical requirement of the law of landlord and tenant for certainty of term. subject to an adjustment relating to the unpaid balance of the total sum of money.

The fact that the agreements were with different terms and rents and having been made with four individuals on different dates were at the highest licence agreements. Taking these matters into account together with the fact that the agreement was for at least three years and that the occupier’s interest was only determinable after compliance with the complex provisions of the agreement. a servant of Lord Eglintoun and the steward of the course.C. [1990] 417 In return for a monthly payment. On account of alleged malpractices on a previous occasion. His action for assault and false imprisonment failed. Securities v Vaughan 1 A. (6) The agreement constituted a lease to the occupier of the portion to which it was granted exclusive possession.G. of part of the premises as part of a commercial transaction for a very substantial consideration made it more likely that something more than a licence. This interpretation was reinforced by the other obligations in the agreement. Leadbitter (1845) 13 M & W 838 The plaintiff bought a ticket entitling him to enter the grandstand at Doncaster racecourse. of a tenancy. the four occupants by four separate agreements made on various different dates had each been granted by the landlords the exclusive right to use a four-bedroom flat in common with three other occupants who had been or might from time to time be granted the like right. he was physically removed by reasonable force necessary. notwithstanding the provision which stated that a tenancy had not been created. Wood v. a mere personal privilege. the agreement bore all the indications. He was a licensee only. and satisfied all the requirements. A. On his refusal. 6 . and not a grantee or an interest in land. to leave the racecourse. The House of Lords held that the four agreements are independent of each other and did not confer a right of exclusive possession on any one occupant but merely a right to share the flat with others. he was ordered by the defendant. was intended.