NG OI FUNG v. HUI CHUN KONG

HCA 155/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 155 OF 2011

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DECISION

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A. Introduction

1.  This action concerns disputes between the Plaintiff and the Defendant regarding properties known as Flats A, B and C on the seventh floor of Far East Bank Mongkok Building (“the Building”) at 11 Nelson Street, Mongkok, Kowloon. 

2.  When the writ was issued on 28 January 2011, the Plaintiff was the registered owner of the said Flat C, whereas the Defendant was the registered owner of the said Flats A and B.

3.  The action was settled.  The settlement agreement, which is set out at paragraph 10 below, provided for the reinstatement of Flats A and B (including portions of the flat roof adjacent to Flat B) by the Defendant, and the Plaintiff undertook to assist in the reinstatement.   The Defendant alleges that the Plaintiff had not rendered the assistance required (namely to remove an iron grille and a wooden door installed at a partition wall between Flats B and C, so that the Defendant can block up the openings where the iron grille and wooden door now are, so as to render Flats A and B separate and distinct units from Flat C) with the result that he was unable to effect the reinstatement. On 21 December 2012, the Defendant issued a summons (“the Summons”) asking for various reliefs including the removal of the iron grille and the wooden door by the Plaintiff, and other prohibitive injunctions against the Plaintiff and her agents and servants.

4.  Because of subsequent developments (as set out below), the Plaintiff has now consented to the Court making an order regarding the removal of the iron grille as prayed for in the Summons.  She also, through her solicitors, gave various undertakings to the Court at the hearing on 4 June 2013 (as recorded at paragraph 38 below).   

5.  The only issue outstanding now is the costs of the Summons.  To resolve this question, however, it is necessary to go into the facts in some detail.

B. Background facts

6.  The said Flats A, B and C, together with Flats D, G and H on the same floor and Flat H on the ninth floor of the Building, had been used for a guesthouse business under the name “Yuen Tung Chu Fong Po” (遠東住房部).  The guesthouse business had been managed by the Defendant.  There was a dispute between the Plaintiff and the Defendant as to the identity of the real owner of the guesthouse business but that dispute is irrelevant to the present application.

7.  According to the Defendant, and from a layout plan exhibited to the Defendant’s Affirmation of 21 December 2012 (referred to as “Plan A”, a copy of which is annexed to this Decision), Flats A, B, C and D on the seventh floor were operated as a single unit, with each of the flats being divided into a number of cubicles.  Some cubicles located in Flats C and D can only be accessed from the outside through a corridor in Flat B, by going through one of the two openings made at the partition wall between Flats B and C (that is, the openings marked “Y” and “Z” on Plan A). 

8.  The iron grille is installed at opening “Y”, and the wooden door is installed at opening “Z”.  The Defendant alleges, and the Plaintiff does not deny, that it was the latter who installed both the iron grille and the wooden door and who alone has the keys thereto.

9.  Parts of Flats B and C as shown on Plan A (towards the bottom of the plan) are in fact built on a flat roof adjacent to each of the two flats, without the approval of the Building Authority (“the BA”).  They, including a portion of the existing partition wall between Flats B and C which contains the wooden door at opening “Z”, are therefore illegal structures.  Building Orders requiring the demolition of those structures had been served by the BA.  The Defendant says that he has complied with the Building Order in relation to the illegal structures built on the flat roof adjacent to Flat B.  However, the Plaintiff has not done so regarding the Building Order in relation to the illegal structures built on the flat roof adjacent to Flat C, including the partition wall between Flats B and C erected on the flat roof.

C. The settlement

10.  The Plaintiff and the Defendant managed to settle the disputes after mediation and a Tomlin Order was made by consent on 19 September 2012.  The Schedule to the Order states as follows:

“1. The Defendant do pay the Plaintiff a sum of HK$300,000 (inclusive of interest) in the following manner in full and final settlement of the respective claim and counterclaim made by the parties herein:-

(a) A sum of HK$200,000 be paid by a cheque drawn by the Defendant’s solicitors in favor of the Plaintiff’s solicitors within one month from the date hereof:

(b) the balance of HK$100,000 be paid by a cheque drawn by the Defendant’s solicitors in favor of the Plaintiff’s solicitors upon completion of the decoration works of the reinstatement of Flats A&B on 7^th Floor, including portion of flat roof, Far East Bank Mongkok Building, No. [11] Nelson Street, Kowloon (the Properties) within 2 months’ thereafter;[1]

2. The Plaintiff undertake to render such assistance when it may be necessary to the Defendant in reinstatement of the Properties as referred to in paragraph 1(b) above”.

11.  In effect, it was agreed that the Defendant would keep Flats A and B, and the Plaintiff would keep Flat C, with a sum to be paid by the former to the latter.

D. The Defendant’s attempts to reinstate

12.  On 9 October 2012, the Defendant’s solicitors wrote to the Plaintiff’s solicitors at the time informing the latter that the Defendant intended to commence the reinstatement works for

“our client’s two properties (i.e. Flats A and B including portion of flat roof) according to the building plan[2] probably within the next week.

In this regard, the illegal partition concerning the initial passage through our client’s properties to your client’s properties shall be blocked and removed. Kindly therefore advise your client to build up the own passage according to the building plan of her own properties”.

13.  The Defendant’s contractors, however, were unable to perform any reinstatement work.  According to the Defendant, the contractors’ workers were threatened by some men coming out from Flat C when they attempted to work.  The Plaintiff denies this, but says that on the two occasions complained of by the Defendant (on 17 October 2012 and 1 November 2012) her assistant did, on her instructions, inform the contractors that the location of the existing partition wall between Flats B and C was different from that shown on the “building plan” (which is in fact “the Diagram” referred to at paragraph 16 below) she (through her assistant) obtained from the Land Registry (see below), and asked the contractors to bring to the attention of the Defendant “the plan” in her possession.

14.  I am of course not in a position to decide, on affirmation evidence, whether threats had been used by men coming out from Flat C in order to stop the work.  However, I do not think it is necessary for this dispute to be resolved because even on the Plaintiff’s version of events, it is clear that she did, through her assistant, put to a halt any intended reinstatement work to be performed by the contractors engaged by the Defendant.

E. The apparent differences between the Diagram/building plans and the actual state

15.  The Plaintiff’s case is that since the reinstatement work was to be done in accordance with the building plan, she could not allow the Defendant to proceed with the work without the Defendant showing her

“the proper and relevant building plans of the said Flat B and Flat C, and also as to how they were going to perform the reinstatement works” (paragraph 14 of her Affirmation of 17 January 2013).

16.  The Plaintiff says that she tried to ask the Defendant to show her “the relevant and proper building plans” before commencing work but the Defendant did not do so (by either not picking up her calls or ignoring her requests).  Therefore, she says, on 16 October 2012 her assistant applied and obtained “a large set of building plans” from the Land Registry, amongst which she located three pieces of drawings stated to be “Usable Floor Area Diagram” showing the layout of the seventh to the twelfth floors of the Building (“the Diagram”).  On the Diagram, Flat B is on the left, and Flat C is on the right.  The Diagram shows the partition wall between Flats B and C to be between two columns, not in the middle but closer to Flat B (i.e. the wall “flushed left” of the columns as one looks at the Diagram), whereas, according to the Plaintiff (and which is not in dispute here, as this is confirmed by Plan A produced by the Defendant) the actual existing partition wall between Flats B and C between the two columns is closer to Flat C (i.e. the wall “flushed right”).  

F. Events leading to, and after, the issue of the Summons

17.  It is because of these apparent differences between the Diagram and the actual state of the partition wall that prompted the Plaintiff, according to her evidence, to instruct her assistant to seek to bring to the knowledge of the Defendant (through the contractors) those differences when the contractors attempted to work at the premises.  The Plaintiff says that she again tried to discuss this with the Defendant and he did not pick up her calls or simply ignored her requests.

18.  I should mention that the Defendant denies the Plaintiff making the alleged calls or the alleged requests to him as referred to above (paragraphs 16 and 17 above).  Again it is not necessary to resolve this issue save I observe that the Plaintiff did not suggest that she, save on one occasion, ever instructed her solicitors at the time to write to those acting for the Defendant asking for the “building plans” or pointing out the apparent differences between the Diagram and the actual state of the partition wall.  This is despite:

(1) the fact that the parties were (and are) legally represented at all times;

(2) the fact that it was through his solicitors that the Defendant first raised with the Plaintiff’s solicitors at the time the question of the actual commencement of work (see the letter of 9 October 2012 (paragraph 12 above));

(3) the fact that on 5 November 2012 the Defendant’s solicitors wrote to the Plaintiff’s then solicitors making complaints of the alleged threats made by some men to the contractors on 17 October 2012 and 1 November 2012.  The reply thereto dated 12 November 2012 from the Plaintiff’s then solicitors simply denied the allegations, and did not raise the concerns of the Plaintiff regarding the apparent differences;

(4) the allegation that the Plaintiff was unsuccessful in her attempts to obtain the “building plans” from the Defendant, and to discuss with him the apparent differences, directly with the Defendant. (On this, assuming the Plaintiff’s allegation is true, I do not see why, given the history between the parties and the fact that both were legally represented, it is unreasonable or improper of the Defendant to refuse to talk to the Plaintiff directly.  The Defendant was fully entitled to insist on communicating with the Plaintiff through their respective solicitors.  It was suggested on behalf of the Plaintiff at the hearing on 4 June 2013 that the relationship between the Plaintiff and her then solicitors was not as good as it should be, but, in my judgment, apart from the fact that there is no evidence in support of this allegation (and the solicitors at the time were still acting for and advising her up to at least November 2012 according to the Plaintiff’s own evidence), this is purely a matter between the Plaintiff and her then solicitors, and cannot have any relevance on the question of costs);

(5) the fact that on 27 November 2012 the Defendant’s solicitors wrote to the Plaintiff’s then solicitors demanding, inter alia, the removal of the iron grille and the wooden door so that openings “Y” and “Z” could be blocked up by 10 December 2012, otherwise an application to the Court would be made.

19.  The only time which the Plaintiff, according to her evidence, instructed her solicitors at the time to write to the Defendant’s solicitors was that sometime in November 2012, after her attempts to talk to the Defendant directly about the apparent differences failed, she instructed those solicitors to write to the Defendant’s solicitors about the apparent differences.  However, she says, those solicitors at the time advised her to instruct a registered architect to prepare a proper report as to the accurate and exact layout of the partition wall before writing. 

20.  However, the Plaintiff did not instruct any such architect until 7 January 2013 (after the first hearing of the Summons on 4 January 2013).  The architect obtained from the BA the approved building plan of the seventh floor of the Building and concluded (in his report dated 17 January 2013) that according to the building plan the partition “is aligned to the right hand side of the columns”, and that the roof-overed construction was unauthorised building work.  In effect, the architect confirmed that the existing partition wall is correctly located in accordance with the building plan, but the structures on the flat roof (including a part of the partition wall which contains the wooden door) are illegal structures.

21.  In the meantime, between the Plaintiff’s allegation that she was advised by her former solicitors in November 2012 to instruct an architect to prepare a report, and the actual instructions given on 7 January 2013 by her present solicitors:

(1) on 27 November 2012, the Defendant’s solicitors wrote to the Plaintiff’s solicitors at the time as stated at paragraph 18(5) above.  There is no evidence of any reply to this letter;

(2) on 21 December 2012, the Summons was issued.  In his Affirmation in support, the Defendant purported to exhibit a copy of the approved building plan for the seventh floor of the Building, but a wrong plan was in fact exhibited.  This was corrected through an affirmation made by a solicitor acting for the Defendant on 3 January 2013.

22.  After receiving the architect’s report, the Plaintiff, for the first time (in her Affirmation of 17 January 2013), referred to the fact that part of the partition wall was an illegal structure. Further, while she was agreeable to an order to be made in relation to the iron grille, she insisted that there should be no order as to costs.

23.  On 14 February 2013, the Defendant’s solicitors wrote to the Plaintiff’s solicitors proposing terms of a consent order, including an undertaking by the Plaintiff that she removed the wooden door.  The Defendant also asked for costs of the application.

24.  There was no reply to this letter until 28 May 2013, when, inter alia, the Plaintiff’s solicitors agreed with an order regarding the removal of the iron grille, refused to agree on any order concerning the wooden door as it related to an illegal structure, and proposed that there be no order as to costs.

25.  On 29 May 2013, the handling solicitors of each party had a telephone conversation and the solicitor acting for the Plaintiff informed his counterpart that the Plaintiff had been summoned for her non‑compliance with the Building Order, and that she intended to demolish the illegal structure including the partition wall which contained the wooden door.  In a letter of the same date to the Plaintiff’s solicitors, the Defendant’s solicitors then proposed to resolve the wooden door issue by the Plaintiff undertaking to demolish the partition wall which was part of the illegal structure.  The Defendant also insisted on being paid 2/3 of the costs as a settlement proposal.

26.  On 30 May 2013, the Plaintiff’s solicitors replied repeating the arguments as to why the Defendant was not entitled to any order regarding the wooden door, and again said that there should be no order as to costs regarding the iron grille.  The Plaintiff’s solicitors did not deal with the proposed undertaking to demolish the partition wall, and did not make any proposal as to how to deal with the matter.

G.    Costs

27.  Even though the Plaintiff is now agreeable, and has consented, to an order requiring her to remove the iron grille, it is argued on her behalf that there should be no order as to costs insofar as the application concerns the iron grille.  Her ground is that if the Defendant had provided or disclosed to her the relevant building plan earlier (i.e. earlier than 3 January 2013, when the correct building plan was provided to her), the Summons would not have been issued.

28.  The premise of the Plaintiff’s argument is that the Defendant had a duty to provide her with the relevant building plan under the settlement agreement, and that even though she accepts in the end that the Defendant should be granted an order for the removal of the iron grille, it was the Defendant’s fault that the Summons had to be issued.  The alleged fault is the failure to produce the building plan as a reference point when the matter was settled in September 2012, or when the Defendant’s solicitors sent their letter dated 9 October 2012 to the Plaintiff’s solicitors at the time, or when the Plaintiff put to the Defendant’s contractors the Diagram, or when the Defendant’s solicitors wrote again on 5 November 2012 and 27 November 2012.

29.  I do not accept the Plaintiff’s argument:

(1) I do not see why the Defendant had a duty to provide the Plaintiff with any building plan under the settlement agreement, or to produce the plan as a reference point at the mediation, so as to prove what reinstatement work should be done properly.  Mr Fung for the Plaintiff at the hearing accepted that there is no such duty on the Defendant as a matter of law.   This must be correct.  The settlement agreement does not mention this at all.  The building plan is a matter of public record and available to the public, and both the Plaintiff and the Defendant were at all material times (and still are) owners of their respective flats on the same floor.  It is not the case that only one side to an agreement has possession of or access to a crucial document thereunder so that that party must be taken to have a duty (whether as an implied term or on any other basis) to provide the same to the other side.  They had equal access to the building plan;

(2) the Plaintiff could have easily obtained the (correct) building plan from the BA and saw for herself that the partition wall in the “legal” part was correctly located.  The fact that she (through her assistant, without asking her then solicitors for assistance) obtained, and relied upon, the Diagram which is not the building plan, and which for some reason is incorrect in showing the exact location of the relevant partition wall, is in my judgment the real cause of the dispute in relation to the iron grille, and this cannot be attributed to the Defendant at all.  While there is no suggestion that this is anything other than an honest mistake by the Plaintiff who was trying to understand what was going on, the Plaintiff cannot blame the Defendant (or any person for whom the Defendant is responsible) for this, especially when she took it upon herself to try to find and interpret “the building plan” without seeking professional assistance.  At the hearing some reference was made to her background and level of education (on which there is no evidence) to explain why she used the wrong plan and misunderstood the situation, but that could hardly be of any relevance on the question of costs to the detriment of the Defendant (and indeed, this is all the more reason why the Plaintiff ought to have sought professional assistance in sorting out this concern she had at the time);

(3) as stated at paragraph 14 above, on the Plaintiff’s own case, the Plaintiff did put to a halt the attempts of the Defendant’s contractors to perform the reinstatement work, on the basis of her mistaken understanding because of the fact that she was looking at the Diagram and not the building plan;

(4) on her own case, the Plaintiff did try to contact the Defendant directly to discuss her concerns, but the attempts were unsuccessful.  In the circumstances, and in the light of the matters referred to in paragraph 18 above, the Plaintiff should have instructed her solicitors to raise the matters with the Defendant’s solicitors (to request for the building plan and/or to raise the question of the apparent differences), which is much more likely to elicit a proper response.  She did not so instruct her solicitors save for the occasion referred to in paragraph 19 above, but no letter was sent as a result;

(5) as for the occasion referred to in paragraph 19 above, irrespective of whether the alleged advice given to her was sensible, and whether at least a holding reply to the letter of 5 November 2012 raising the concerns of the Plaintiff ought to have been sent, the position changed, in my judgment, with the 27 November 2012 letter from the Defendant’s solicitors which in effect gave an ultimatum to the Plaintiff to comply by 10 December 2012.   Yet no reply was sent, not even a holding one setting out her position, nor did the Plaintiff take any steps to appoint an architect as she had been advised. That is, the Plaintiff did nothing to deal with the situation in response.  It is therefore no surprise that the Summons was issued by the Defendant on 21 December 2012, and it is reasonable and justified for the Defendant to do so;

(6) given that the architect eventually instructed took no more than  ten days to produce a report, if the Plaintiff had given the instructions shortly after the 27 November 2012 letter was received, the report would have been available before the Summons was issued;

(7) the fact that an incorrect building plan was exhibited to the Defendant’s Affirmation in support of the Summons is, in my view, not relevant, as it had no effect on the events that happened before 21 December 2012 leading to the issue of the Summons.  At most if the correct plan was exhibited the Plaintiff might have been prompted to instruct the architect earlier, but the subsequent course of events is unlikely to be any different;

(8) on behalf of the Plaintiff, it is argued that while the Defendant might have no duty to provide her with the building plan, in the spirit of co-operation and mutual assistance in reinstatement, the Defendant ought to have done so.  I do not see how this can assist the Plaintiff, when she had not properly asked the Defendant for the plan at all but instead obtained for herself and relied on a wrong plan (and I have already dealt with the allegation of the Defendant refusing to talk to the Plaintiff directly at paragraph 18(4) above). 

30.  In the premises, I do not see why, insofar as the Summons relates to the iron grille and the opening “Y”, in relation to which the Defendant gets in substance what he asks for, there should be no order as to costs, or that the Defendant should not be given costs.

H.    The wooden door

31.  The question of the wooden door is now resolved by the Plaintiff’s undertaking to remove the entire illegal partition wall which contains the same.  The question is whether it has any impact on the question of costs.

32.  Had it been necessary, and despite the eloquence of Mr Chan on behalf of the Defendant, I would have declined to grant any order requiring the Plaintiff to remove the wooden door as prayed for in the Summons, for the following reasons:

(1) the purpose of an order requiring the Plaintiff to remove the wooden door is so that the Defendant can block up opening “Z”. That is, instead of a partition wall between Flats B and C with a wooden door allowing access between the two Flats, there would be a complete partition wall (being an illegal structure).  However, as the Plaintiff suggests, to make such an order to facilitate the blocking up of opening “Z”, the Court would have been condoning the existence of the illegal structure being that part of the partition wall erected on the flat roof, and to allow the Defendant to reinstate and reinforce an illegal structure.  Irrespective of whether the question of illegality matters between the Plaintiff and the Defendant, I would have, in the exercise of my discretion, declined to grant what is in effect a mandatory injunction in such circumstances. The Defendant cannot, under the guise of implementing the agreement, which he argues provided for Flat B to become a distinct and separate unit from Flat C, insist on having a complete partition wall on the flat roof with no opening which is an illegal structure, and to ask the Court to assist him to achieve that by an order;

(2) the Defendant also argues that the sealing up of opening “Z”, so that persons cannot no longer use Flat B for access to and from Flat C, is necessary for him to enjoy his right to the exclusive possession of his portion of the flat roof.  In my judgment, however, what the Defendant cannot insist on in order to protect his right to exclusive possession is a complete partition wall, which is what he wants by way of the order applied for, as any such wall is illegal.  On the other hand, without the partition wall, or with a partition wall with an opening, the Defendant’s such right exists and remains enforceable against all trespassers by whatever legal means available;

(3) as is accepted on behalf of the Defendant, the Plaintiff is free, and is indeed obliged as a matter of law, to remove the partition wall as it stands on the flat roof completely.  I do not think that it would have been a proper exercise of my discretion to order the Plaintiff to remove the wooden door so that the Defendant can block up the opening, only to have the entire portion of that wall demolished soon after. That would have been an inexcusable waste of time, money and materials.

33.  I do not think, however, that the fact that the Defendant has in the Summons asked for an order removing the wooden door affects the question on costs.  Even if the Defendant had not asked for any order regarding the wooden door, given what had happened since the settlement, and the parties’ respective stance so far on the iron grille and on costs after the Plaintiff accepted that an order ought to be made in relation thereto, the Summons would have to be issued, and the hearings on 4 January 2013 and 4 June 2013 would have to take place. 

34.  On the Plaintiff’s own case, she was not aware of the fact that the part of the partition wall on the flat roof was an illegal structure until she obtained the architect’s report in January 2013. Thus, before that time, no point was taken by her in relation to the wooden door in addition to the points taken by her in relation to the iron grille, and so it is difficult to see that there had been any extra costs incurred by either party which are attributable to dealing with the wooden door, on top of the costs which had to be, and were in fact, incurred for dealing with the iron grille. 

35.  As for what happened thereafter, while I am of the view that the Defendant ought not to be granted any order for the removal of the wooden door so that the Defendant could block up opening “Z” and thus reinforcing an illegal structure, any need to deal with the wooden door at all was due to the fact that the Plaintiff, after knowing that the partition wall on the flat roof was an illegal structure at least as from 17 January 2013, had failed to demolish it (leading to her being summoned for non‑compliance with the Building Order).  If, after knowing of the fact that the partition wall and all other structures on her portion of the flat roof were illegal, she did take steps to demolish them right away in the discharge of her legal duty, the question of the wooden door would have been resolved.  At the very least, given all the circumstances, the Plaintiff ought, in my view, to agree to give the undertaking as requested by the Defendant’s solicitors on 29 May 2013 as that is consistent with the Plaintiff’s legal duty and stated intention at the time, and represented a practical solution to the wooden door issue.   What the Plaintiff cannot do, for the purpose of costs in relation to the wooden door, is to hide behind her own failure to comply with the law.

36.  In the premises, I would not make any adjustments to the order on costs to take into account the fact that the Defendant had asked for an order for the removal of the wooden door which I would not have granted.   

I. Disposal

37.  I make the following orders:

(1) by consent, the Plaintiff do, at or before 4:30 pm on 6 July 2013, remove the iron grille at the opening of the partition wall between Flat B and Flat C on 7^th Floor, Far East Bank Mongkok Building, No. 11 Nelson Street, Kowloon, which opening is marked “Y” in the Plan annexed to the Order herein[3];

(2) the Plaintiff do pay the Defendant his costs of and occasioned by the Summons, including the hearings on 4 January 2013 and 4 June 2013, to be taxed if not agreed.

38.  For the sake of completeness, I record the undertaking given by the Plaintiff to the Court as follows:

“A. Whether acting by herself, her agents or servants, not to hinder or obstruct the Defendant or his agents from reinstating the partition wall by blocking with bricks the opening at spot ‘Y’ in the Plan annexed to the Order herein.

B. Starting from 7 July 2013, the Plaintiff, her agents and servants, shall not enter Flat B on 7^th Floor, Far East Bank Mongkok Building, No. 11 Nelson Street, Kowloon, for access to Flats C and D on the same floor of the said building.

C. To demolish, on or before 30 July 2013, the illegal structure now erected on the portion of flat roof adjacent to Flat C on 7^th Floor of the said building.” Plaintiff do by 6 July 2013 remove the entire partition wall now erected between the flat roof portions of Flat B and Flat C on 7^th Floor, Far East Bank Mongkok Building, No.11 Nelson Street, Kowloon”.

39.  Lastly, I thank the parties’ legal representatives for their assistance.