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Estates and Interests in Land

in Hong Kong

Lecture 2
Tommy Ho

1
Estate & Interest in Land
Question:
A owns a piece of agricultural land in Tai
Po. He wants to sell the land to B. B says
that A only occupies the land under a
lease but is not an owner, and therefore
the land is not worth the price A is asking
for.
Advise A.

2
Estate & Interest in Land
All land in Hong Kong was held by the
Queen of England before 1 July 1997 and
since then is held by the Government of
the Hong Kong Special Administration
Region on behalf of the State of PRC.
Individual owners of land hold their land
under government leases and are strictly
speaking tenants instead of landlords.

3
Estate & Interest in Land
A holder of land is entitled to a bundle of
legal rights in respect of his land. These
legal rights are measured by different
durations of time and are collectively
known as estates.
There are two main types of estates,
namely, freehold and leasehold.

4
Estate & Interest in Land
The meaning of freehold estate goes back to the
English feudal system. For practical purposes, a
convenient way to distinguish a freehold estate
from a leasehold estate is that freehold is of
indefinite duration whereas leasehold is always
for a fixed term, known as a term of years
absolute in legal jargon.
Land in Hong Kong is all on leasehold (except
the land on which St John Cathedral stands).

5
Estate & Interest in Land
Hong Kong Island ceded to Great Britain
under the Convention of Chuenpi (
) signed on 20 January 1841 between
the British Government and the Qing
Government.
Officially ceded under the Convention of
Nanking dated 29 August 1842.

6
Estate & Interest in Land
By the Convention of Peking signed in
1860, land south of the Boundary Street in
Kowloon was ceded to Great Britain.
In 1898, under the Second Convention of
Peking the area now known as the New
Territories (ie. land north of Boundary
Street to the Shum Chun River and 235
islands) was leased to Britain for 99 years.

7
Estate & Interest in Land
In 1841, when the British navy landed on the
Hong Kong Island, Hong Kong was made a
colony of England.
When the first land auction took place in May
1841, it was not clear then whether the land to
be sold should be on freehold or leasehold.
It was not until 1843 that it was finally decided
that the land sold since 1841 should be on
leasehold.

8
Estate & Interest in Land
Early terms of leasehold varied from 999,
to 99, 75 or 21 years.
Since 1898, the norm has become 75
years.
As a result of complaints of the lessees,
the later grants further give the lessees an
option to renew the lease for another 75
years.

9
Estate & Interest in Land
Land in the New Territories was leased for
99 years from the Qing Government.
Land holding there could not be anything
but leasehold.
The normal term for the leases in New
Territories was 75 years with a right to
review for 24 years less three days (ie. 99
years less 3 days).

10
Estate & Interest in Land
Before the British Government ruled the
New Territories, land in the New
Territories had been held under Chinese
customary tenure.
The Chinese office which was responsible
for regulating land titles and transactions
in Hong Kong was the Canton Magistracy
()

11
Estate & Interest in Land
Historically, many irregular transactions
had been going on for centuries before the
British rule.
As a result, there were many title problems
arsing from land in the New Territories.

12
Estate & Interest in Land
The Government decided to assume the
land in New Territories to cure such
problems.
Section 8 of the New Territories Ordinance
1910, provides that
All land in the New Territories is hereby
declared to be and to have been from 23
July 1900, the property of the
Government.
13
Estate & Interest in Land
The assumption of the property of land in
the New Territories was subject to the
Convention of Peking that
it further understood that there will be no
expropriation and that if land is
required for public purposes, it shall
be bought by a fair price.

14
Estate & Interest in Land
Cf. Article 105 of Basic Law
The Hong Kong Special Administrative Region
shall, in accordance with law, protect the right of
individuals and legal persons to the acquisition,
use, disposal and inheritance of property and
their right to compensation for lawful
deprivation of their property.
Such compensation shall correspond to the
real value of the property concerned at the
time and shall be freely convertible and paid
without undue delay.

15
Estate & Interest in Land
The purposes of the Government then
were not to confiscate land in the New
Territories but to regulate the titles by
assuming the property first and grant the
titles back to the original landowners.
The Hong Kong Government only had 99
years in the New Territories, so the titles it
could grant were necessarily a lesser title
for many landowners who used to holding
the land indefinitely.
16
Estate & Interest in Land
Among the many problems in the titles of
land in New Territories were the variations
of tenure and identities of landowners.
First of all, the demarcation of land was
not conspicuous.
The descriptions of the boundaries found
in some old Chinese title documents did
not tally with the land on site.

17
Estate & Interest in Land
Under the Qing law, the basic principle was that
land was held in perpetuity (similar to the
concept of freehold).
In relation to identities of owners, there was land
owned by individual owners, by clans or families
and also held under a specific trust which
prohibited alienation but was held in perpetuity
for some specific purposes such as ancestor
worshipping or other social purposes such as
providing education fund to clan members, etc.
18
Estate & Interest in Land
Problems of land dealings:-
1. land held on trust perpetually for a
specific purpose is not recognised in
common law;
2. customary mortgages (now known as
mortgage by way of Form C under New
Territories Regulations) were unknown to
the British legal system; and
3. claims of adverse possession were
19
difficult to verify.
Estate & Interest in Land
A Land Court was established by the New
Territories Land Court Ordinance (No.18
of 1900).
The Land Court was responsible for
creating a system of land in New
Territories, including the demarcation of
different lots, determining their ownerships,
and deciding on the titles to be given to
such lots.

20
Estate & Interest in Land
When necessary, the Land Court would
have to adjudicate claims of titles/interests
in land such as interests based upon
adverse possession.

21
Estate & Interest in Land
The Land Court decided to divide land in
New Territories into demarcation districts
which were then subdivided into blocks.
Block Crown (now Government) Leases
were then issued to a whole block of land
rather than to individual lots.
Individual ownerships of lots were
annexed in the schedule of these Block
Crown Leases.
Eg. Lot 123 in Demarcation District 10
22
Estate & Interest in Land
After ownerships were determined and
recorded in the Block Crown Leases,
administration of the land in the New
Territories was carried on by the District
Officers who were also responsible for
registration of the transactions in land
within their respective districts.

23
Estate & Interest in Land
Thus, dealings in land in the New
Territories were not registered in the Land
Office but the District Office.
Up until today, many land matters in the
New Territories are still the responsibilities
of the District Office, eg land relating to
small houses () and land held by tso
() and tong ().

24
Estate & Interest in Land
Land in the New Territories not only was
subject to the New Territories Ordinance
but also Chinese customary law, which
was recognised in the New Territories
Ordinance itself.

25
Estate & Interest in Land
Section 13 provides that in any proceedings in
the Court of First Instance or the District Court in
relation to land in the New Territories, the court
shall have power to recognize and enforce any
Chinese custom or customary right affecting
such land.
It has been decided by the court that the
recognition and enforcement of Chinese custom
is mandatory but not discretionary.

26
Estate & Interest in Land
There was express statutory protection
and recognition of succession right on
intestacy in the male line in Part II of the
New Territories Ordinance.
The protection of males succession right
on intestacy was only abolished by the
New Territories Land (Exemption)
Ordinance in 1994.

27
Estate & Interest in Land
Under the Qing Code, daughters had no
right to succession to intestate estates of
their fathers but only a right to dowry.
Now the Intestates Estate Ordinance
applies to New Territories land so that
both sons and daughters enjoy the same
rights.

28
Estate & Interest in Land
Land not exempted from Part II of the New
Territories Ordinance was also treated
differently from other land in Hong Kong.
Such land was not subject to the Town
Planning Ordinance or Buildings
Ordinance.

29
Estate & Interest in Land
In 1987,the Buildings Ordinance (Application to
the New Territories) Ordinance was enacted so
that nowadays Part III of the Buildings
Ordinance applies to the New Territories.
But under the Buildings Ordinance (Application
to the New Territories) Ordinance, it is still
possible to obtain a Certificate of Exemption
from Part III. This is actually how small houses
have been built after 1987.

30
Estate & Interest in Land
Land which can be exempted from Part II
of the New Territories Ordinance included
land purchased after 17 April 1899, land
held under a separate Crown lease (not
within a Block Crown lease) and a new
grant of land.

31
Estate & Interest in Land
Before 1997, there were also Letters A
and B which were important interests in
New Territories land.
Letters A and Letters B are not land but
land exchange entitlement. They were
issued by the Government to holders in
New Territories land on resumption of their
land between 1960 and 1983.

32
Estate & Interest in Land
The Letters were granted in lieu of
monetary compensation when the
landholders agreed to surrender their land
to the Government for public purposes.
Before 27 June 1997, both Letters could
be used to offset the price of land
purchased from the Government by
auction or tender.

33
Estate & Interest in Land
Letters A were issued Letters B were issued
when a speedy where notice of
resumption was resumption had
required so that already gazetted.
resumption was made
without the notice of
resumption gazetted

34
Estate & Interest in Land
New Territories Land Exchange
Entitlements (Redevelopment) Ordinance
(No.70 of 1996) has converted all such
land exchange entitlements into
entitlements for cash payment only.
The Letters are no longer able to be used
as payment of the premium of land.

35
Estate & Interest in Land
Tso () and Tong () are Chinese
family or clan institutions recognised under
the New Territories Ordinance.
They are also the vehicles that a Chinese
family or clan in New Territories used to
hold land property.

36
Estate & Interest in Land
In a nutshell, tso was a trust where land
was held for the benefit of the clan or the
lineage and was usually created
posthumously by the heirs of the
deceased land owner for various purposes,
particularly for ancestral worship.

37
Estate & Interest in Land
Tong was similar institution but usually
created by the landowner inter-vivos, with
the intention to ensure that the land was
held by the clan in perpetuity for various
purposes.

38
Estate & Interest in Land
There are other variations such as Wui ()
or Yuen () which may have been formed
by families of different surnames or as a
kind of co-operative society of clansmen to
hold land for various purposes such as
worship of certain gods like Tin Hau ().

39
Estate & Interest in Land
At common law, land property cannot be
held on trust in perpetuity for a special
purpose. The general rule is that land
can be held on trust for the duration of a
life plus 21 years.

40
Estate & Interest in Land
The Chinese customary trusts are alien to
the common law trust but are preserved by
common law as customary law applicable
only to land in New Territories not
exempted from Part II of the New
Territories Ordinance.

41
Estate & Interest in Land
The Chinese customary trust has the following
important features:-
Land is held by managers () on trust for
the benefit of a clan or lineage.
Every male descendant of the common ancestor
automatically become entitled at birth to an
interest in land and this is only a lifetime interest.
Such interest cannot form part of the estate and
be disposed upon a male descendants death.
Once the male descendant dies, the interest
extinguishes.
42
Estate & Interest in Land
Land is normally inalienable and indivisible
and held in such a way in perpetuity.
Under section 15 of the New Territories
Ordinance, disposal of the land by
managers must have the consent of the
Secretary to the Home Affairs, and in
practice the Secretary will not give consent
unless the alienation has the unanimous
consent of all the members.

43
Estate & Interest in Land
In theory if all members unanimously
consented to dispose of the land, the
disposition will be valid even without the
consent of the Secretary.
The difficulty is that in practice it may not
be easy to prove the unanimous consent
of all members in subsequently
conveyance. Eg. Whether those who
signed on the documents comprise the
entire membership. 44
Estate & Interest in Land
Section 15 of the New Territories
Ordinance provides a practical way for
managers to dispose the land as if the
managers were the sole owners:
1. The managers must be appointed by
the members and registered under the
New Territories Ordinance.

45
Estate & Interest in Land
2. The consent of the District Officer (DO)/
Secretary of Home Affairs.
3. The consent of all members of the tso
or tong. The consent will be inferred if no
objection is raised to the DO.
4. The instrument of assignment is
executed in front of the DO.
(in practice point 4 is not always required
as long as proof of consent of the DO is
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produced)
Estate & Interest in Land
Should the land concerned not be disposed of
according to section 15 by the managers, the
purchaser would not have a good title to the land.
The title of land so disposed is supposed to be
void.
However, it appears that the title of the land is
good if the disposal has the unanimous consent
of all members even if not executed under s.15
by the managers, subject to the practical
difficulty to prove that all existing members
actually consents. 47
Estate & Interest in Land
The Small House
Small House policy was officially
implemented by the Government in 1972.
One of the purposes was to allow male
indigenous villagers in the New Territories
to build houses for personal occupation.

48
Estate & Interest in Land
In order to facilitate the indigenous
villagers to build their own houses, they
are allowed to build houses on land
granted by the government for free or on a
concessionary premium and on
agricultural land within the relevant village.
Buildings Ordinance was not applicable.

49
Estate & Interest in Land
A special building licence or a new grant is
given to them to regulate the size, height
and style of the building.
The houses so built are now known as
Small Houses (): not exceeding 700
square feet in area and 27 feet in height.

50
Estate & Interest in Land
In the very first place, all indigenous male
villagers over the age of 18 were entitled to a
piece of land within a village area.
More recently, the grant of the Government was
at a concessionary premium.
If an indigenous villager had his own agricultural
land, he may be granted a free building licence
to build a small house or his agricultural land is
exchanged for another piece of land under a
new grant for the purpose of building a small
house.
51
Estate & Interest in Land
In some cases, the small house built cannot be
alienated until 3 years expires after the date of
the certificate of compliance.
After 3 years, the indigenous villager is then
entitled to pay a premium to the Government
and thereafter free to dispose of the small house,
subject to the conditions of the grant or the
building licence.

52
Estate & Interest in Land
The conditions include that the owner has
to create a deed of mutual covenants and
he can only dispose the small house as a
whole or by floors but cannot divided the
house vertically for disposal purposes.

53
Estate & Interest in Land
If the land is private land owned by the
indigenous villager himself, then once the
certificate of compliance is issued, he is
usually entitled to pay a premium to the
Government, and then sells the small
house, subject to the same conditions of
the grant.

54
Estate & Interest in Land
If the indigenous villager does not want to pay a
premium, then he will normally have to wait for 5
years after the issue of the certificate of
compliance; or
He can assign the small house or any part
thereof subject to the conditions of the grant to
another indigenous villager who is over 18 years
old and has not himself previously taken
advantage of the small house policy to build a
small house for himself.
55
Estate & Interest in Land
The size, height, etc of small houses
requires strict compliance. Any deviation
from them may bring the small house
constructed out of the protection of the
three certificates for exemption.

56
Creation of estates and interests in land

Section 2 of CPO defines a legal estate as


a term of years absolute in land, the
legal interest in any easement, right or
privilege in or over land for an interest
equivalent to a term of years absolute, and
a legal charge.

57
Creation of estates and interests in land

In the same section 2, equitable interest


is defined to mean any estate, interest, or
charge in or over land which is not a legal
estate or freehold
As such, any proprietary right in land
which is not legal must be equitable.

58
Table of Legal and Equitable
rights and interests
Legal Equitable
lease/tenancy/ lease/tenancy/
interests equivalent interests equivalent
easement easement
charge charge
mortgage
land covenants
etc

59
Creation of estates and interests in land

You can hold the legal/ equitable title to a


legal estate/ equitable interest in land. For
example, a person can hold a legal/
equitable title to an easement (which itself
can be either legal estate and equitable
interest).
But you can only have a legal title to a
legal estate and an equitable title to an
equitable interest.
60
Creation of estates and interests in land

When a right or interest is capable of


existing as legal estate, it must also
comply with the formal requirements in its
creation/disposition in order to become a
legal estate.
Section 4(1) CPO, a deed is generally
necessary to create, extinguish or dispose
of a legal estate in land.

61
Creation of estates and interests in land

A deed is a formal legal document which is


signed, sealed and delivered.
Section 4(2) CPO provides the main
exception to the requirement for a deed.
Any grant, disposal or surrender of a legal
lease taking effect in possession for a term
not exceeding three years at the best rent
reasonably obtainable without taking a
premium.

62
Creation of estates and interests in land

Section 3(1) CPO requires contracts for


the sale or other disposition of land be in
writing and signed by the parties, subject
to section 6(2).
Section 3(2) : This section applies to
contracts or other dispositions whenever
made and does not affect the law relating
to part performance or sales by the court.

63
Creation of estates and interests in land

Section 6(2): Nothing in section 3 or 5 or in


subsection (1) shall affect the creation by
parol of leases taking effect in possession
for a term not exceeding 3 years (whether
or not the lessee is given power to extend
the term) at the best rent which can be
reasonably obtained without a premium.

64
Creation of estates and interests in land

Section 5(1)(a) CPO provides that no


equitable interest in land can be created or
disposed of except by writing signed by
the person creating or disposing of the
same, or by his agent thereunto lawfully
authorized in writing or by will or by
operation of law.

65
Creation of estates and interests in land

Section 5(1)(b) CPO requires a declaration


of trust respecting land shall be
manifested and proved in writing signed
by the person capable of creating such
trust and section 5(2) provides that section
5(1) does not affect the operation of
resulting, implied or constructive trust.

66
Creation of estates and interests in land

Thus, any proprietary right capable of existing as


legal estate but not created/disposed by deed
can exist as equitable interest so long as the
creation or disposition was in writing and
properly signed.
If the creation or disposition is not in writing, then
the transaction is not enforceable in law, subject
to the few exceptions.
Any other proprietary right in land not covered
by section 2 of CPO (eg land covenants) must
be created or disposed of in writing.
67
Creation of estates and interests in land

There are three types of equitable


interests in land:
1. The proprietary rights which cannot
exist as legal estates, eg land covenants.
2. The proprietary rights which are capable
of existing as legal estates but were not
created by deeds, eg an equitable lease
which is created in writing.
3. The proprietary rights that a person
68
holds in equity under a trust.
Creation of estates and interests in land

Question:
X claims that he has orally agreed to rent
his agricultural land to Y for Y to carry on
rice farming on the land in return for some
rice as rent. Was there a binding tenancy
agreement?

69
Creation of estates and interests in land

The question is whether or not some rice


amounts to the best rent reasonably
obtainable.
See Chan Yeuk Mui v. Ng Shu Chi [1999]
2 HKC 702.

70
Government Leases
All land is now held on a government lease
(used to be called Crown lease).
In the past there is a real physical document of
Crown lease (an indenture which consists of
two documents of identical contents), but the
government no longer actually grants a lease.
Pursuant to section 14 CPO, a lease is deemed
to be issued once the conditions of sale have
been performed.

71
Government Leases
The most common way for the
government to sell land is by public
auction.
The successfully bidder will become the
lessee of the lot in question subject to
certain conditions of sale including general
and special conditions.

72
Government Leases
The general conditions set out terms of the
auction, completion of sale, payment of
premium, government rent, repair
obligations, right of government to re-enter
for breach.
The special conditions set out the specific
rights and obligations on possession, use
and development.

73
Government Leases
For example, the lessee may be required
to build a bus stop or a fly-over to connect
the land with another building, etc.
There are also building covenants which
impose a duty on the purchaser to build on
the lot by certain specific date and in
accordance with the conditions,
Ordinances, by-laws and regulations
relating to the building and sanitation.

74
Government Leases
After the building is completed, the Director of
Lands will issue a certificate of compliance of the
conditions upon application of the purchaser.
The certificate of compliance serves as the
documentary proof that all conditions of sale
have been performed.
Under this certificate of compliance, a
government lease is deemed to be issued under
section 14 CPO.

75
Government Leases
Question:
What would happen when no certificate of
compliance is obtained?

76
Government Leases
When no certificate of compliance is obtained,
the lease may fail to comply with the formal
requirements for creating a legal estate.
As such, the lessee holds the land in equity.
That is, he/she holds only an equitable interest
in the land but without a legal estate.
See Chen v Another and Lord Energy Ltd [1999]
1 HKLRD 205.

77
Government Leases
In respect of the building itself, there is a design,
disposition and height clause (DD & H clause),
which provides that prior approval in writing of
the Director of Lands of the building plan must
be obtained before any building work, can
commence.
Section 14 of the Buildings Ordinance provides
in effect that any building work without the prior
approval of the Director of Lands must be
demolished and no retrospective approval is
possible.
78
Government Leases
Under section 14, any illegal structures
(usually means building works carried out
without the approval of the Building
Authority) present in a land will render the
title to the land a bad title.
See Jumbo Gold Investment Ltd v. Leung
Yuen Cheong Warren [2000] 1 HKC 539.

79
Government Leases
The Director of Lands can charge a premium for
such approval under the Buildings Ordinance,
even though the practice is that the government
normally would not levy a premium for granting
such approval.
When exercising this authority, the Director of
Lands acts as the land agent of the government
in its capacity of private landlord.

80
Government Leases

When the government acts in the capacity of a


private landlord, the decision of the government
is not susceptible to judicial review.
It is therefore not possible to tie the government
to the existing policy of not charging a premium
based on the public law concept of legitimate
expectation.
See Polorace Investments Ltd v. Director of
Lands [1997] 1 HKC 373.

81
Government Leases
In addition to sell the land, the Government can
also dispose land by exchange, grant, re-grant
or extension. In any of these cases, the
government can set out some conditions for the
grantee(s) to observe and fulfill.
The standard conditions include a term of the
grant with or without a right to renew, a rent,
duty to repair, user of the land, compliance with
ordinances and regulations, and a right of re-
entry of the Government in case of serious
breach.
82
Government Leases
In addition of the right of re-entry, the
Government can resume any land under the
Lands Resumption Ordinance (Cap. 124) by
paying compensation to the lessees.
If the lessees are not satisfied with the
compensation, the lessees are entitled to make
a claim for compensation to the Lands Tribunal
pursuant to section 10 of that Ordinance.

83
Leasehold

Historically a lease is a personal property.


In the old days, lease was only a
commercial contract between landlord and
tenant. A contract could only be enforced
by an action in personam and remedies
available were damages.

84
Leasehold

Later, a tenant was allowed to enforce a


lease against the landlord or third party
(eg squatter) by an action in rem. That
means the tenant could obtain the re-
possession of the land.
But the classification of a lease as a
personal property remains up until today,
even though it actually confers a
proprietary right to the tenant.
85
Leashold
A lease consists of three main elements,
namely, a term at a rent with exclusive
possession, see Lord Templeman in
Street v. Mountford [1985] 1 A.C. 809, at
816F.

86
Leaseholds
In Ashburn Anstalt v. Arnold [1988] 2 All
ER 147, the English Court of Appeal held
that there was no need for the payment of
rent for there to be a lease.
The combined effect of these two
authorities is that a term and exclusive
possession are two necessary and
sufficient elements of a lease.

87
Leaseholds
A lease must have a certain beginning and a
certain ending when it is created. There must be
a term of year.
Thus in Lace v. Chantler [1944] KB 368, where a
lease purportedly said to be for the duration of
the war (ie the end of the lease was unknown at
the time the lease was created) was held to be
void but for the statutory provisions of the
Validation of Wartime Leases Act 1944 which
converted the lease to a term of 10 years.
88
Leaseholds
In Prudential Assurance Co. Ltd v. London
Residuary Body [1992] 2 EGLR 56, a lease said
to last until the landlord required the land for
road widening purposes was held to be invalid
for uncertainty.
In a leasehold property, the term of the lease
itself is uncertain. But the lease also provides
the maximum duration for a sublease. The
maximum duration for the sublease may save
the lease from being rendered invalid. See
Guoji Transport Co Ltd v. The Collector of
Stamp Revenue [1997] HKLRD 1168.

89
Leaseholds
It is the element of exclusive possession which
distinguishes a lease from a licence. Lord
Templeman in Street v. Mountford held that:-
An occupier of residential accommodation at a
rent for a term is either a lodger or a tenant. The
occupier is a lodger if the landlord provides
attendance or services which require the
landlord or his servants to exercise unrestricted
access to and use of the premises. A lodger is
entitled to live in the premises but cannot call the
place his own. . . .
90
Leaseholds
If on the other hand residential
accommodation is granted for a term at a
rent with exclusive possession, the
landlord providing neither attendance nor
services, the grant is a tenancy (at 817H-
818D).

91
Leaseholds
Whether an occupier was granted
exclusive possession is a matter of facts.
The court will look into the actual situation
before deciding whether there is exclusive
possession.
See A.G. Securities v Vaughan 1 A.C.
[1990] 417.

92
Leaseholds
In the old days when there were laws which
provided life-long security of tenure under a
controlled rent, it was very important for landlord
to distinguish whether he is granting a licence or
lease to an occupier.
If it is a licence, the grantee will have no
protection in respect of either security of tenure
or rent control. If it is a lease, then the occupier
becomes a tenant and is entitled to enjoy the
benefit of control of rent and security of tenure.
93
Leasehold
Nowadays, for most land in Hong Kong,
there is no longer rent control or security
of tenure for tenancy.
Whether an occupier of certain premises is
holding a lease/tenancy or a licence is not
really material (except perhaps a licence is
contractual and therefore not enforceable
against the successor in title).

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Licences

A licence is a permission to enter upon the


land of another person to do something
thereon.
There are four kinds of licences: a bare
licence, a licence implied by an interest, a
contractual licence, and a licence by
estoppel.

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Licences
The most important point to note is that a licence
is generally revocable unless coupled with a
proprietary interest in land or in chattel.
A customer of a supermarket is entering the
supermarket with an implied licence from the
owner of the supermarket. But this licence is
limited to permitting the customer to view the
merchandizes and to purchase the same.

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Licences
The owner or his/her agent can always
terminate the licence and invite the
customer to leave the supermarket.
If a person enters into a supermarket with
a view to stealing something, he has no
licence at all but enters as a trespasser.
(you will learn about this in your Criminal
Law in relation to the offences of theft and
burglary)

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Licences
Question:
What rights if any does a person entering
into a theatre with a ticket have?

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Licences
A person who enters a theatre or other
premises with a ticket is a contractual
licensee only and has no right or interest
in the land in question.
See Wood v. Leadbitter (1845) 13 M & W
838.

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Licences
A contractual licensee has more right than a
bare licensee as in the case of a customer
entering into a supermarket.
The proper remedy for revocation of a
contractual licence is to sue for damages for
breach of contract. If a licensee knows in
advance that the licensor is to breach the licence
agreement, he can go to court to get an
injunction or specific performance to force the
licensor to perform.
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Licences
In the case that a licence is coupled with an
interest, the licence is irrevocably as long as the
interest subsists. For example, X has a
contractual right to pick strawberry in Bs farm.
There is an implied licence that X can enter Bs
farm. B cannot stop X from entering the farm
while Xs right to pick has not expired.
This interest which allows a person to take
something from land belonging to another is
known as profits prendre in legal jargon.
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Licences
One important point to note is that a
licence will lapse if the licensor dies,
whereas a tenancy is not affected by the
death of the landlord.

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Easements
An easement () is an interest in land. It
is a right of a landowner over the land of his
neighbour for the enjoyment of his own land.
Common examples are rights of way, rights of
light and rights of support.
By virtue of section 2 of CPO, an easement can
be legal or equitable. An easement can also be
express or implied. A more thorough discussion
of easements will be in lecture 5.

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Covenants
A covenant is a promise by deed whereby the
person making the promise agreed to be bound
to do or not to do something.
In Hong Kong, land covenants are extremely
important in multiple storeys buildings in which
rights of the common owners are defined in a
special legal document known as Deed of
Mutual Covenant (DMC). More discussions of
covenants will be in lecture 5 and of DMC in
lecture 10.
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