THE INCORPORATED OWNERS OF YEE FUNG GARDEN v. BASIC TECH LTD

HCA6622/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.6622 OF 1998

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J U D G M E N T

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1. The plaintiff commenced action herein on 28 April 1998 seeking a mandatory injunction against the 1st and 2nd defendants to remove certain unauthorized structures and/or damages.

BACKGROUND

2. The plaintiff is the incorporation of owners ("IO") of Yee Fung Garden, Yuen Long under the Building Management Ordinance, Cap.344. Yee Fung Garden is comprised of a commercial complex on the G/F, carparks on G/F and 1/F, podium and recreational facilities on 2/F, and two residential blocks A and B above. The Occupation Permit of Yee Fung Garden issued on 5 May 1992 stipulated the user of shops, entrance hall, transformer room, refuse room and ancillary accommodation for non-domestic use on the G/F.

3. At the material time, Mr Tam King Yin ("Tam") was the Chairman of the Management Committee ("MC"), and Mr Sin Shu Kui ("Sin") was the Vice-Chairman. Homechant Limited ("Homechant") was the Manager. On 1 June 2000, Homechant was replaced by Hsin Cheong Real Estate Management Limited ("Hsin Cheong").

4. The 1st defendant purchased Shops 32 to 55 on G/F ("Shop 32") on 2 November 1996. The purchase price was $28,000,000. The 2nd defendant purchased Shop 76 on G/F on 7 November 1996.

5. Both the 1st and 2nd defendants are controlled by Mr Chung Wai Ping ("Chung"). The 2nd defendant operates the Tao Heung Seafood Hotpot Restaurant ("Tao Heung") at Shop 32. Shop 76 is used to house the air-conditioning water cooling tower for Tao Heung. The business hours of Tao Heung run from 7 a.m. to 2 a.m. The correspondence shows that Chung, Tao Heung, the 1st and/or 2nd defendants have dealt with the plaintiff interchangeably and no distinction is drawn at the trial.

6. Tao Heung commenced business in early December 1996. The restaurant licence was granted by the Regional Services Department on 16 January 1998. Before the commencement of business, the defendants have erected and installed the following structures :

(1) A green signage along the shop front of Shop 32 at G/F ceiling level on the southern side of Yee Fung Garden;

(2) A metal framed glass canopy above the green signage;

(3) A metal bulkhead covering the split type air-conditioning units along the eastern side of Shop 32 at G/F ceiling level;

(4) An air duct for exhaust of fume from the kitchen mounted on the outer wall of Shop 32 at G/F ceiling level starting from the north western corner and running along the western side to the south western corner, then turning upwards and terminating at 1/F;

(5) A town gas supply pipe emerging from underground of the common corridor near the south western corner of Shop 32 and rising vertically to G/F ceiling level and mounted on the outer wall running horizontally along the western side of Shop 32 and entering Shop 32 at the north western corner, with a metal louvered device covering the vertical part of the gas pipe;

(6) An air conditioning water cooling tower inside Shop 76, and a louvered metal air hood for the split type air-conditioners at G/F ceiling level at the front of Shop 76;

(7) The male and female toilets inside Shop 32 were relocated and the number of toilet bowls and/or unrinals increased, and a new sewerage pipe was constructed on the eastern side of Shop 32.

7. The tiles on part of the common corridor near Shop 32 were dug up by the defendants for the laying of pipes. The tiles were replaced but were slightly non-matching in colour. There is no claim as such in respect of the non-matching tiles, but the cleaning fee for the tiles is relevant to the defence.

8. On 14 April 1997, the exhaust air duct was categorised by the Building Authority as unauthorized building work ("UBW") against section 14 of the Buildings Ordinance, Cap.123. A building order for demolition of the exhaust air duct was issued on 29 August 1998. The 1st defendant was convicted of carrying out UBW under section 40(1B)(b) of the Buildings Ordinance by a magistrate. It appealed to the Court of First Instance against conviction and the appeal was dismissed on 4 August 1999. Thereafter, the 1st defendant submitted addition and alteration plans for the exhaust air duct to the Building Authority. The plans were approved and certain works had been done to the exhaust air duct, but final inspection by the Building Authority had not been carried out and the letter of satisfaction had not been issued.

9. In mid-2001, the defendants replaced the green signage on the southern side of Shop 32 with a new signage, and part of the bulkhead on the eastern side of Shop 32 was also replaced by another signage. Collectively, they are referred to as the signages.

THE PLAINTIFF'S CASE

10. The plaintiff alleged that the abovementioned works are in breach of the Deed of Mutual Covenants dated 10 June 1992 ("DMC"). The plaintiff never granted consent to such works, and had never accepted any fee in toleration of them.

11. The complaint of the air-conditioning cooling tower is two-fold : the cooling tower itself is allegedly noisy and a nuisance; and the metal air hood was an unauthorised alteration to the external appearance of the building. The plaintiff is not claiming damages for nuisance separately, but relying on it as evidence of breach of the DMC. It was suspected that cooling pipes run from Shop 76 to Shop 32 but there is no evidence as such.

12. The plaintiff is also claiming reimbursement of water flushing charges from the defendants. Fresh water is used in the flushing system at Yee Fung Garden. There is one flush water meter for Block A and Shop 32, and another meter for Block B and all other shops including Shop 76. The plaintiff alleged that before the opening of Tao Heung, there was virtually no need to pay for the flushing water of Block A. After the commencement, the charges were about $7,000 to $8,000 per month. The plaintiff is claiming on the basis of an agreement to pay or alternatively unauthorised alteration of the drainage work. Counsel for the defendants Mr Lai submitted that there was no liability to pay. However, subject to the determination of liability, the parties have agreed on the quantum of the water flushing charges.

13. The plaintiff relied on the following provisions of the DMC and/or other relevant regulations :

(1) Signages

Part A of Section IV (applicable to all owners)

(2) Canopy and bulkhead

Part A of Section IV

Clause 4 (Structural alterations)

Clause 14 (Breach of Ordinance)

Clause 20 (Projections or structures extending outside the exterior of the building)

Clause 21 (Alteration of external appearance of the building)

(3) Exhaust air duct

Part A of Section IV

Part C of Section IV

Clause 1 (Approval of design of façade)

(4) Gas pipe

Part A of Section IV

Clause 14: (Breach of Ordinance)

Clause 15: No part of the Communal Areas may be obstructed or incumbered save with the consent of the Manager ...

Building Management Ordinance

(5) Air-conditioning cooling tower and metal air hood

Part A of Section IV

Clause 13 (Nuisance)

Clause 21 (Alteration of external appearance of the building)

Part C of Section IV

Clause 1 (Approval of design of façade)

(6) Male and female toilets

Part A of Section IV

Crown Grant

PLAINTIFF'S EVIDENCE

14. The MC was unanimous in opposition to the idea of the opening of Tao Heung when they first heard about it in August 1996. The plaintiff agreed that there is no express prohibition in the DMC against the operation of a restaurant at Shop 32, except Shop 32 is not purposely fitted out for a restaurant.

15. On 3 October 1996, the 1st defendant submitted a decoration undertaking and the decoration deposit of $120,000. Chung crossed out all the standard terms in the undertaking and endorsed that his company would abide by the DMC.

16. On 24 October 1996, the MC received the decoration plans. The MC noted there were problems in the plans and decided to hold an extraordinary meeting of the IO to consider the matter.

17. On 8 November 1996, the meeting of the IO was held. At the meeting, only the matter of the electricity supply was discussed in details as it was the only item left undone by then. The impugned works were done or in progress and were left to the MC. On the same date, Homechant wrote to the 1st defendant complaining that the gas pipe and the toilet work were in breach of the DMC and without consent.

18. The defendants then produced to the plaintiff a letter dated 27 November 1996 from Henderson Real Estate Agency Limited ("Henderson") on behalf of the developers to the 1st defendant stating that subject to the approval of the relevant government departments and other relevant authorities, the developers did not object to the installation of the gas pipe and the exhaust air duct as per plans approved by the Environmental Protection Department. The 1st defendant also tendered a draft undertaking for all liabilities and insurance in respect of the gas pipe and the exhaust air duct, and a personal cheque of Chung for $100,000 as security for demolition of the exhaust air duct upon the cessation of business of Tao Heung.

19. On 11 December 1996 at the meeting of the MC, Mr Wong Wai Kin ("Wong") of Homechant proposed the following :

(1) To reduce the size of the exhaust air duct to 2 x 4 ft;

(2) Tao Heung to be responsible for the demolition and restoration of the gas pipe and the exhaust air duct in future;

(3) Tao Heung to pay for the water flushing charges pro rata;

(4) Tao Heung to be responsible for the costs of clearing the drainage;

(5) Tao Heung to give up installation of the large signage;

(6) Tao Heung to pay for the annual electrical inspection fee pro rata;

(7) Chung proposed to offer a bank guarantee in respect of the drainage system.

20. However, Chung stormed out of the meeting as he was dissatisfied with the IO requesting the gas company to cut off the town gas supply. Homechant was instructed to draft an agreement in writing for feasibility study by the MC.

21. On 22 December 1996, the MC wanted to add in the draft undertaking that Tao Heung would be responsible for the pipes going under the common corridor.

22. In December 1996, there were also discussions with Chung about the defendants increasing the deposit for the exhaust air duct from $100,000 to $150,000 and paying a special monitor fee of $2,000 per month for the cleaning of the wall soiled by the exhaust air duct. However, no agreement was reached yet as the plaintiff wanted to find out the authority of Henderson and also who was to bear the liability insurance of the exhaust air duct.

23. In the meantime, Homechant received letters from the Fire Services Department and the Regional Services Department that the gas pipe and the exhaust air duct were suspected UBW. On 23 January 1997, Homechant wrote to Tao Heung suspending the discussions on the special monitoring fee pending directions from the government. On 28 January 1997, Tao Heung replied that it agreed to suspend the discussions and to make other arrangement later.

24. On 28 February 1997, the MC agreed to come to a decision on the special deposit by Tao Heung within two weeks upon Chung's request. Eventually, Chung's cheque for $100,000 was returned without presentment.

25. In the meantime, there were complaints that the air-conditioning cooling tower was in operation after 11 p.m., thus making a lot of noise. The matter was referred to the Environmental Protection Department. Tao Heung later installed insulation devices as suggested.

26. There were also complaints from the residents that staff of Tao Heung were making a lot of noise at 4 a.m. or so when preparing for business. Tao Heung was notified and the noise level was reduced.

27. The water flushing pump which was situated on the roof top was also in heavy use, and also making a lot of noise because of the increased capacity of the toilets. Yick Man, the nominated contractor of Yee Fung Garden suggested a mid-way water tank be installed. As at 20 June 1997, Tao Heung was considering whether to pay for the mid-way water tank, allegedly because it still had not got the restaurant licence. The parties were also negotiating the water flushing charges. At some stage the plaintiff alleged that the defendants agreed to pay for the mid-way water rank, but Wong of Homechant said in cross-examination that the defendants agreed to consider the proposal only. At any rate, the mid-way water tank is not part of the plaintiff's claim.

28. The plaintiff alleged that Chung agreed to pay for the flushing charges pro rata in principle. The parties have not agreed the quantum.

29. The plaintiff alleged that the alteration of the toilets had caused slight blockage and flooding to another shop in the commercial complex. Compensation had been paid out of Yee Fung Garden's insurance scheme.

30. The original tiles at the common corridor dug up for the pipes were no longer in stock. It was agreed that Tao Heung would pay a special cleaning fee of $5,000 per month, partly as compensation of the non-matching tiles, and partly for cleaning of the greasy floor. The fee was to commence from 15 April 1997 for two years, subject to further agreement. The plaintiff accepted this fee for two years, but emphasised that it was not a fee to tolerate the impugned works. The plaintiff did not negotiate any renewal fee upon legal advice.

31. Mr Chui Wing Fai ("Chui"), an officer of Hsin Chong said that the defendants did give notice of the decoration in mid-2001 which involved the replacement of the green signage. However, he never told Ms Irene Wong of the defendants that if the IO did not object, the defendants could go ahead with the decoration.

32. The plaintiff called two experts, Mr Kenneth J.K. Chan, Authorised Person - Surveyor and Mr Daniel K.Y. Mok, Registered Structural Engineer to give an opinion on the status of the impugned works.

33. There is no dispute that the signages, canopy and bulkhead are all UBW contrary to the Buildings Ordinance. However, the plaintiff's experts disagreed with the defendants' experts that those items were structurally stable or safe. They said the defendants' experts' design calculations were technically correct but they were based on untested assumptions :

(1) The defendants' experts merely carried out calculations on the design sketches provided by the defendants;

(2) There was no tests verifying the integrity of the building materials used, workmanship or integrity of the host building carrying the structures.

34. The plaintiff's experts said that design sketches are only part of structural stability. If no structural plans were submitted and inspection carried out of the completed work, it would be difficult for a Registered Structural Engineer to confirm the structural safety.

35. The plaintiffs' experts agreed that the UBW might be tolerated by the Building Authority for the time being but it did not mean that they were authorised and it would be a matter of time that they be subject to enforcement. Further, according to the practice direction of the Building Authority, no retrospective approval for UBW will be granted. The Building Authority will only approve plans before any work has been carried out. That means the UBW have to be demolished first and replacement structures be built even if application for approval is made now.

36. Although addition and alteration plans for the new exhaust air duct had been approved and a new mounting for the air duct was apparently constructed, there had not been report of completion of work and submission of certificate of materials used with results of manufacturer's testing and site testing to the Building Authority by a Registered Structural Engineer, nor final inspection and the issuance of a letter of satisfaction that the work was done in accordance with the approved plans. Hence, the exhaust air duct cannot be regarded as approved by the Building Authority.

37. The gas pipe is not in breach of the Buildings Ordinance. But there is no evidence of compliance or approval by the gas company.

38. The housing of the air-condition cooling tower in Shop 76 does not contravene the Buildings Ordinance or occupation permit.

39. The relocation and expansion of the toilet was also UBW. It did not come within the exempted drainage work under section 41(3A) of the Buildings Ordinance as it involved structural alteration of the building and connection of additional drainage.

40. The plaintiff's experts said that a restaurant licence could still be issued even if there were UBW, unless imminent danger was posed.

THE 1st AND 2nd DEFENDANTS' CASE

41. The 1st and 2nd defendants alleged the following lines of defence :

(1) The external walls are reserved to the developers as vendors in the assignment to the first purchaser, and in particular to -

(a) to erect one or more pipes or smoke stacks or chimneys at the rear of any of the Blocks from G/F level or any other level to the roof thereof;

(b) to use all the external walls of the podium of the Building for advertising purposes;

(2) By the letter dated 27 November 1996, Henderson has given written permission to the defendants to erect the gas pipe and the exhaust air duct;

(3) The outer walls (including those of Shop 32) are not common parts and the signage, canopy and bulkhead are outside the jurisdiction of the plaintiff;

(4) Properly construed, Clauses 1(a) and 3 of Part A of Section II of the DMC give the owners of the commercial development the easements, rights and privileges to install new gas pipe, drainage and sewers for the proper use and enjoyment of the shop;

(5) Of all the impugned works, only the relocation and expansion of the toilets amounted to structural alterations;

(6) There is no breach of the Crown Grant, and even if so, the breach per se is no contravention of the DMC without the insurance of the building being rendered void or voidable or otherwise susceptible to loaded premium;

(7) The toilets were installed for the purpose of complying with government requirements for restaurant licence, and in practical terms citizens deal with only one and the same government and grant of the restaurant amounts to countenance by the government;

(8) The appearance of the structures on the external walls does not necessarily alter the façade of the building without the evidence of the original façade;

(9) Although the signages, canopy and bulkhead are UBW, they are all structurally stable and tolerated by the Building Authorities under the policy of prioritised enforcement;

(10) The exhaust air duct is not UBW as it has been dismantled and replaced pursuant to an addition and alteration application to the Building Authority;

(11) There complaints of nuisance were isolated instances and there had been abatement;

(12) The parties have entered into oral agreement whereby the plaintiff have consented to and/or waived and/or acquiesced the impugned works by the acceptance of a monthly fee;

(13) The installation of the new signages in mid-2001 was not objected to by the plaintiff.

DEFENDANT'S EVIDENCE

42. The defendants originally alleged that prior consent had been given by the MC before the construction of the impugned works. Upon cross-examination, Chung agreed there was no prior consent and this defence was later abandoned.

43. The defendants are now saying that all the impugned works have been tolerated by the plaintiff in accepting a monthly fee of $5,000 from the 1st defendant for two years. The defendants were willing to pay the fees but the plaintiff refused to accept it.

44. Chung said that at the end of 1996, he had two meetings with Sin representing the plaintiff at the Management Office. Staff members of Homechant were also present. Initially, he orally agreed with Sin that the deposit for the demolition of the exhaust air duct was to be increased from $100,000 to $150,000, together with a special monitor fee for the exhaust air duct of $2,000 per month. Neither the $50,000 nor the $2,000 was paid. Subsequently, the $2,000 special monitor fee was replaced by a special cleaning fee of $5,000 per month. Although it was described as special cleaning fee, only $3,000 related to the extra cleaning of the common corridor, where the replacement tiles were slightly non-matching. The balance of $2,000 was in fact a toleration fee. The fact was concealed because the plaintiff was not comfortable to describe it either as a special monitor fee or toleration fee, and it was disguised as a special cleaning fee of the common corridor.

45. The defendants referred to the draft minutes of the meetings of the MC dated 11 December and 22 December 1996 in support of the alleged oral agreement.

46. In the draft minutes for 11 December 1996, paragraph 3 stated that Tao Heung had complied with the requirements of the IO in altering the decoration specifications and could be regarded as being sincere and it was resolved that legal action be cancelled and Homechant be instructed to negotiate the terms of an agreement with Tao Heung and to submit a draft to the IO for feasibility study. In the signed minutes, the reference to compliance was omitted and it recorded that Tao Heung should comply with the requirements of the IO.

47. In the draft minutes for 22 December 1996, paragraph 3 stated that an oral agreement was reached with Tao Heung to increase the special deposit for the exhaust air duct by $50,000 and a monitor fee for the exhaust air duct of $2,000 per month, and Homechant be instructed to draft an undertaking to carry out the oral agreement, which would include the matter of the underground pipe(s) going through the common corridor. In the signed minutes, the reference to the oral agreement was omitted.

48. The defendants relied on the evidence of Wong of Homechant that at the meeting on 22 December 1996, Sin reported that an oral agreement was reached with Tao Heung in respect of the exhaust air duct but the other members of the MC did not agree and Tam did not sign the draft minutes and redrafted the signed version.

49. The defendants also produced a statement of Sin dated 23 November 2002, admitted on the basis that Sin was a servant or agent of the opposite party at the material time under the old Order 38, rule 29(2) of the Rules of the High Court (Cap.4A) applicable to action begun prior to 1 June 1999. Sin said the fact that matters were edited out from the draft minutes by Tam did not mean they were not discussed or passed. He felt that the original drafts were more complete, reasonable and congruent.

50. Chung said all along the plaintiff had accepted the $5,000 per month. Later, the plaintiff used the impugned works as a leverage to make him succumb to their demand to pay the water flushing charges and the building of a mid-way water tank.

51. The plaintiff demanded the defendants to pay the water flushing charges in full as they alleged that it was free before. Chung agreed with the principle of "user to pay", but not payment in full. He offered to pay 15%. The plaintiff refused to accept.

52. Chung said he neither agreed nor objected to building a mid-way water tank. He had to look at the costs first. The matter had been left pending the quotations by the plaintiff's nominated contractor.

53. Ms Irene Wong, assistant manager of the defendants said she handed the decoration of $40,000 to Chui of Hsin Cheong in mid-2001 and there was no objection to the commencement of work.

54. The defendants called two experts, Mr T.S. Tam, Authorised Person - Architect, and Mr W.K. Yau, Registered Structural Engineer, to show that the signages, canopy and bulkhead are structurally stable or safe, and all the UBW are tolerated under the Building Authority's prioritised enforcement policy.

55. The defendants' experts accepted that their opinion was subject to the following limitations :

(1) As the site inspection could not reveal all the construction details, the structural analysis would be limited to and based on the information given by the client;

(2) No testing was carried out to any of the existing building structure and materials used for the additional features, erection and installation.

56. The defendants' experts said even though no material testing was done, they were assured of the material integrity :

(1) From experience, 90% of building materials in use in Hong Kong would comply with the relevant minimum standards;

(2) Measurements taken of the structures showed no excessive deflection;

(3) The lowest figure in the range of the relevant standards had been used in the calculations to ensure the analysis was conservative.

57. The defendant's experts said that the expansion of the toilets did not exceed the maximum capacity of the manhole and there would be no adverse effect to the drainage system. Further, they said that the actual usage of flushing water would depend on the frequency of use rather than the facilities available.

58. There is no investigation of the gas pipe. The experts simply relied the defendants' instructions that it was approved by the gas company.

ASSESSMENT OF THE EVIDENCE

59. I shall first resolve the evidence on the alleged oral agreement and make the relevant finding of facts.

60. Chung said that he reached the oral agreement with Sin. On the contrary, Sin stated in the statement that he never reached any oral agreement with Chung, notwithstanding that he queried the minutes signed by Tam.

61. Mr Lai submitted that the evidence of Wong that at the meeting on 22 December 1996, Sin reported that an oral agreement was reached with Tao Heung in respect of the exhaust air duct was support for Chung.

62. Sin's claim that the draft minutes were more accurate than the signed minutes was neither here nor there if he denied any oral agreement with Chung. Further, on 14 June 1999, Chung wrote an open letter to all the owners of Yee Fung Garden. He asked the owners to read the minutes of the MC to get a full picture of the dispute. He referred to the signed minutes on 11 and 22 December 1996. By then, he had obtained the draft minutes through discovery. He never alleged that Tam had manipulated the minutes, or that the signed minutes were untrue.

63. I do not accept the evidence of Chung. The defendant's pleaded case of the oral agreement was that the additional special deposit of $50,000 and special monitor fee of $2,000 covered the exhaust air duct. The witness statement of Chung stated the sums covered the exhaust air duct, the plumbing works and the non-matching tiles. Chung's evidence was that the special cleaning fee of $5,000 per month covered all the impugned works. It was indeed a quantum leap of an agreement. Even assuming that $2,000 out of the $5,000 relate to the exhaust air duct, I fail to see why the additional $50,000 deposit has been dropped. Chung's explanation that the $50,000 was not tendered because Tao Heung had not opened a bank account is not plausible because the original cheque for the $100,000 was drawn by Chung personally. At any rate, the $100,000 cheque was returned unpresented. The bank guarantee referred to in both the draft and signed versions of the minutes of the MC of 11 December 1996 was never provided by the defendants. Further, I fail to see how the $5,000 should take care of every thing if the issues of the mid-way water tank and flushing charges were unresolved as in the mind the plaintiff, they related to the alteration of the toilets. Chung agreed that the mid-way water tank was suggested by Yick Man as early as the decoration period in October and November 1996, and it must have been in issue when the $5,000 was paid in April 1997.

64. The evidence and contemporaneous documents show that there were indeed discussions between the parties but they point to a halt in the discussions when the plaintiff found out that the exhaust air duct was UBW. Upon cross-examination, Chung was asked why he did not attempt to draft the agreement when Homechant failed to do so. He answered that he did not know what the IO wanted.

65. I find that the plaintiff has never reached any oral agreement with the defendants in respect of any of the impugned works. The special cleaning fee of $5,000 per month only related to the cleaning of the common corridor and the waiver of the non-matching tiles without more.

JURISDICTION OF THE IO

66. Section 18(1) of the Building Management Ordinance provides that the corporation of the owners shall :

"(a) maintain the common parts and the property of the corporation in a state of good and serviceable repair and clean condition;

(b) carry out such work as may be ordered or required in respect of the common parts by any public officer or public body in exercise of the powers conferred by any Ordinance;

(c) do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant (if any) for the control, management and administration of the building."

67. Under Clause 15 of Part C of Section IV of the DMC, the Manager has the power and duty to remove any structure, installation, signboard, sunshade, brocket, filling or other things in or on the Lot or the Building (including any roof and/or flat roofs) which have been erected in contravention of the terms of the Crown Grant or the DMC and/or without the written permission of the Manager.

68. It is clear that the jurisdiction of the IO is not confined to the management of the common parts of the building. When there is a breach of the DMC, it is both the right and the duty of the IO to enforce the DMC (see Incorporated Owners of Hoi Luen Industrial Centre v. Ohashi Chemical Industrial Industries (HK) Ltd [1995] 2 HKC 11, 13 per Godfrey JA).

RIGHTS IN THE OUTER WALLS

69. Mr Lai submitted that the clause reserving the outer walls to the developers is contained in the assignment to the first purchaser as well as in the assignments to the 1st and 2nd defendants. It is reasonable to infer that it exists in all assignments.

70. Be that as it may, there is no evidence that the developers still retain the title to the outer walls and it has not been assigned away prior to for the Henderson letter dated 27 November 1996.

71. Even assuming that the developers are still the owner of the outer walls of the building, they are also bound by the DMC. Clause 1 of Section I of the DMC stipulated that the Registered Owner, i.e. the developers, shall hold the entire building to the exclusion of the first purchaser (save and except the assigned flat) subject to and with the benefit of the DMC. Hence, the developers are subject to those provisions of the DMC concerning the outer walls or the exterior of the building. It is noted that the Henderson letter is carefully worded as subject to the approval of the government and other relevant authorities.

72. At any rate, the reservation clause stipulates that the chimney shall reach the roof top. Mr Lai conveniently omitted the reference to the roof top in quoting the clause in his written submissions, no doubt being conscious of the fact that it does not cover the exhaust air duct which only goes up to the 1/F carpark. The reference to the roof top must have been intended to minimise the disturbance to the occupants of the building along the path of the chimney.

73. As to advertising on the outer walls, the reservation clause refers to advertisement boards on the podium. The podium is situated on the 2/F. It does not cover the defendants' shop front at G/F ceiling level. In any case, the Henderson letter did not cover any advertisement board.

74. I do not find there is any substance in the outer wall defence.

SIGNAGES, CANOPY AND BULKHEAD

75. There is no dispute that the signages, canopy and bulkhead are UBW. I note that Mr Yau, the defendants' expert who did the design calculations on which opinion of structural stability was based was testifying for the first time as an expert in court. He agreed that there was no basis for him to make the assumption for due workmanship without site testing on the UBW and the host building. I accept the plaintiff's expert evidence that by reason of the untested assumptions and limitations in the analysis of the defendants' experts, they cannot be regarded as structurally stable or safe.

76. A complete statement of the prioritised enforcement policy of the Building Authority can be found in the first instance judgment of Deputy Judge Chung (as he then was) in Spark Rich (China) Limited v. Valrose Limited, HCMP No.3739 of 1997. In short, the policy is to categorise UBW into a high priority group for which enforcement action shall be taken as a matter of high priority if they are :

(a) UBW constituting an imminently danger's situation where there is an obvious danger to life or property.

(b) Significant new UBW irrespective of the date of completion of the building in which the UBW have been carried out.

(c) Such UBW or particular types of UBW in buildings, lanes, streets, areas, etc. as may be recommended for demolition or other remedial action by pubic bodies or government agencies.

(d) Major UBW which contravene the Buildings Ordinance and lease conditions at the same time.

77. On the other hand, UBW not covered by the High Priority group will fall into the Low Priority group for which no enforcement action will be taken for the time being. Cases in this group will, however, be upgraded when it is considered appropriate to do so. For UBW in the low priority group, enforcement action may be deferred.

78. Mr T.S. Tam, expert for the defendants agreed that prioritised enforcement does not mean a policy not to enforce against the low priority group and it is a question of time and resources. He said there is a procedure whereby one can seek the opinion of the Technical Secretary of the Buildings Department as to whether the UBW belong to the high or low priority group but it has not been done in this case . He agreed that his emphasis was on obvious and imminent danger when considering the prioritised enforcement policy. Since his opinion as to structural stability or safety is rejected, there also goes his opinion as to toleration by the Building Authority.

79. In Taikoo Shing (Management) Ltd v. Trillion (HK) Ltd [1997] 4 HKC 304 per Li, DJ sitting in the Lands Tribunal held that a prohibition in the DMC against altering the exterior appearance of the building without approval in writing by the management company applied to anything that alters the exterior appearance of the building, what ever aesthetic enhancement such thing might bring to the building.

80. By looking at the photographs produced, I also find that the signages, canopy and bulkhead amount to a alteration in the external appearance of the building. Mr Lai submitted that there were designated spaces for signages and advertising for all other shops except Shop 32. A fortiori, the absence of designated space means approval should be obtained.

81. Mr Lai argued that signages, canopy and hulkhead do not amount to structural alteration of the building.

82. In Pearlman v. Keepers and Governors of Harrow School [1979] QB 56, Geoffrey Lane LJ said at p.72 :

" 'Structural' in this context means, I believe, something which involves the fabric of the house as opposed to the provision merely of a piece of equipment. It matters not whether the fabric in question is load-bearing or otherwise, if there is any substantial alteration, extension or addition to the fabric of the house the words of the schedule are satisfied. I have no doubt that the works done here 'amount to' such alteration or addition. The system is connected in permanent fashion to the gas, water and electrical installations which are part of the fabric of the house. The walls, floors and ceilings have been drilled with holes to accommodate the piping. The flue is connected in permanent fashion to the chimney (part of the fabric) which has itself been altered by lining. This is not merely the provision of equipment, it amounts to alteration and addition to the structure."

83. And Eveleigh LJ said at p.79:

"In Pickering v. Phillimore, West London County Court, May 10, 1976, Judge White said:

'A house is a 'complex unity', particularly a modern house. 'Structural' implies concern with the 'constituent or material' parts of that unity. What are the 'constituent or material' parts? In my judgment in any ordinary sense they involve more than simply the load bearing elements for example the four walls the roof and the foundations. The constituent parts are more complex than that.'

He then suggested a definition of structural as being 'Appertaining to the basic fabric and parts of the house as distinguished from its decorations and fittings.' The judge said that it would be wrong to describe the central heating system as mainly fittings for throughout the house the system became built into it and became part of it in a layman's sense.

In my opinion Judge White has the right conception of what Parliament meant by structural."

84. In view of the findings by me above, the plaintiff needs not rely on the structural alteration point. At any rate, I find that the signages, canopy and bulkhead are substantial projecting structures affixed on to the building, relying on the host building for their support. They are extension or addition to the fabric of the building and have become part of the building, and are structural alterations of the building.

85. Mr Lai also submitted that the signages, canopy and bulkhead do not project beyond the boundary line of the building lot. Clause 20 prohibits projections extending outside the exterior of the building. The fact that they do not extend beyond the lot boundary is neither here nor there.

EXHAUST AIR DUCT

86. The defendant's experts did not dispute that the letter of satisfaction has not been issued by the Building Authority. Mr T.S. Tam agreed that upon the completion of work, the defendants should report to the Building Authority for final inspection.

87. Mr Mok for the plaintiff first said that the lack of the letter of satisfaction means that the exhaust air duct cannot be regarded as authorised. Under cross-examination, he said that it could be regarded as authorised provided that it was built according to the approved plans. He is not all that clear on his opinion.

88. The wording of section 14 of the Buildings Ordinance is as follows :

"(1) Save as otherwise provided, no person shall commence or carry out any building works or street works without having first obtained from the Building Authority -

(a) his approval in writing of documents submitted to him in accordance with the regulations; and (See Form 12)

(b) his consent in writing for the commencement of the building works or street works shown in the approved plan. (See Form 14)

(2) Subject to section 28B(4), neither the approval of any plans nor the consent to the commencement of any building works or street works shall be deemed -

(a) to confer any title to land;

(b) to act as a waiver of any term in any lease or licence; or

(c) to grant any exemption from or to permit any contravention of any of the provisions of this Ordinance or of any other enactment."

89. It seems to me that section 14 only relates to approval before commencement of work. Once approval is given, the exhaust air duct is no longer in breach of section 14. Whether the approved plans have been complied with is another matter. There may be other provisions in the Buildings Ordinance relevant to the matter but no submissions have made on such point. As such, I cannot say there is a breach of the Buildings Ordinance. On the other hand, I cannot be assured as to its structural integrity of the exhaust air duct as if a letter of satisfaction has been issued by the Building Authority.

90. Chung agreed that the exhaust air duct did smear the external wall of the 1/F carpark and special cleaning was required. The parties discussed about it but did not agree upon this special cleaning. I find that the claim of nuisance is made out.

91. The exhaust air duct must be a structural alteration as well as alteration of the external appearance of the building by reason of its substantial nature and being a building work under the Buildings Ordinance. As Mr Lai has sought to argue that the exhaust air duct was a chimney, I fail to see how it did not amount to alternation of the external appearance.

92. Mr Lai submitted that the defendants have been let down by the professional in not properly completing the addition and alteration works. I fail to see how it can be an answer to the plaintiff's claim.

GAS PIPE

93. The experts for both parties were not able to comment on the approval for the gas pipe by the gas company.

94. Mr Lai submitted that Part A of Section II of the DMC gives the owners of the commercial development the following easements, rights and privileges :

(a) to go pass and repass over and along and use the Commercial Common Area and Facilities for all purposes connected with the proper use and enjoyment of such Shop (Clause 1(a));

(b) The free and uninterrupted passage and running of water, sewage, gas, electricity and any other services from and to such Shop through the sewers, drains, watercourses, cables, pipes and wires which now are or may at any time hereafter be in under or passing through the Lot and the Building for the proper use and enjoyment of such Shop (Clause 3).

95. It was submitted that upon its proper construction, such rights extend to the installation of the gas pipe for the proper use and enjoyment of such shop.

96. It is clear that Clause 3 merely gives the owner the enjoyment of uninterrupted passage of, inter alia, gas through the pipes which are now or may at any time hereafter be in under or passing through the Lot and the Building. There is no mention of the right to construct additional gas pipe by the owner. Neither Clause 1(a) nor the words "the proper use and enjoyment" takes the matter further. I do not agree with the submission of Mr Lai.

97. The allegation that the gas pipe has travelled through and emerged from the common corridor was not challenged. I find that there has been a conversion of the common parts.

98. I also find that the gas pipe amount to the alteration of the external appearance of the building.

TOILETS

99. There is no dispute that the relocation and expansion of the toilets are UBW and structural alterations. Once it is admitted that there are structural alterations, they cannot come within the exemption under section 41 of the Buildings Ordinance. Indeed, Mr Lai no longer so argued.

100. Mr Lai submitted that there is no breach of Condition 28 of the Crown Grant. Properly construed, the provision governs the approval of the first design and laying of the drainage system in the development of the land lot under the grant. It is intended as a one-time compliance there is no continuing obligation. Once the development stage was past, it was history.

101. I do not agree. The wording of Condition 28 is "The whole of the drainage within the lot shall be subject to the approval of the Director (of Lands)" and not the original drainage or words to that effect. It means every item in the drainage system, whether original or additional, is included. I find that there is a breach of Condition 28.

102. Mr Lai submitted that even if there is of a breach of the Crown Grant, there is no contravention of the DMC without it resulting in the insurance of the building being rendered void or voidable or otherwise susceptible to loaded premium.

103. Clause 6, Part A of Section IV, of the DMC reads as follows :

"No owner may do or permit or suffer to be done any act or thing in contravention of the terms and conditions in the Crown Grant or whereby any insurance on the Building or any part thereof may become void or voidable or whereby the premiums for any such insurance may be increased and in the event of any breach of this Clause by any Owner, in addition to being responsible for any other liability incurred thereby, such Owner shall pay to the Manager the amount of any increase in premium caused by or on account of such breach."

104. Mr Lai submitted that the words "or whereby" should be interpreted as "and whereby", making the breach of the Crown Grant conjunctive with the voidable or increased premium of the insurance. I think this argument is wholly untenable.

105. Mr Lai submitted that the defendants was entitled to an easement to install the drainage and sewers for proper use and enjoyment of Shop 32. I have already dealt with this point in respect of the gas pipe. I disagree with such submission.

106. Mr Lai submitted that the toilets were built to comply with the requirement of the restaurant. It was apparent that the application was circulated to the Buildings Departments for comments. In practical terms citizens deal with only one and the same government and grant of the restaurant amounts to countenance by the government.

107. In Wong On v. Lam Shi Enterprises Limited, HCMP No.2549 of 1995, Le Pichon J (as she then was) said :

"Moreover, it is well-recognised that Government may act in different capacities: for example, as landlord and as Building Authority. See Hang Wah Chong Investment Co., Ltd. v AG [1981] HKLR 336. In what capacity it was acting and whether or not it was acting in more than one capacity depends on the circumstances of each case."

108. Section 14A(1) of the Buildings Ordinance provides as follows:

"The Building Authority is not deemed to have consented under section 15, if the authorized person has not lodged a supervision plan for the building works or street works."

109. No plans have been submitted in respect any of the UBW including the toilets. Further, the fact that the building order was issued after the grant of the restaurant licence meant that the Building Authority could not have approved all of the UBW. I find that there has been no countenance by the Building Authority to any of the UBW. I also do not accept the defendants' expert evidence that the UBW will be tolerated by the Building Authority. It is at best second guessing without seeking the available advice from the Buildings Department.

110. With regard to the evidence of blockage of the drain in the other shop, I do not regard the plaintiff's evidence is sufficiently strong to point the cause to the defendants. However, I accept the plaintiff's evidence and find that the changes to the toilets have put additional burden on the water tank and pumping system. Further, if there had been no effect on the pumping system, Chung would not have agreed to consider the quotations on the mid-way water tank.

AIR-CONDITIONING COOLING TOWER

111. The plaintiff relied on complaint letters by the residents and onward complaints to the Environmental Protection Department to prove nuisance. No complainant has been called. The minutes show that at some stage the defendants did install insulation devices at Shop 76 and nuisance was somewhat abated. No evidence was called on the effect of the insulation. Mr Li for the plaintiff conceded that the evidence is not overwhelming, but submitted that given the operation hours until 2 a.m., there is bound to be some nuisance by way of noise. I am not satisfied on the evidence that nuisance caused by the operation of the air-conditioning cooling tower at Shop 76 is made out.

112. There being no allegation that the user of Shop 76 per se is in breach of DMC, I do not find that the air-conditioning cooling tower is in breach of the DMC.

113. As to the metal air hood of Shop 76, I find that it has altered the external appearance of the shop front.

CONSENT, ESTOPPEL ACQUIESCENCE AND WAIVER

114. As mentioned, I have found against any prior consent or oral agreement to tolerate the impugned works.

115. It is trite law that for an estoppel to arise, there must be clear and unequivocal representations by one party, and reliance thereon by the other in acting to its own detriment. The impugned work were carried out before the plaintiff received the plans and found out what was going on, They were presented to the plaintiff as fait accompli. Chung knew that he had to comply with the DMC. It was he who crossed the terms of the decoration undertaking and stated instead to comply with the DMC. He knew that no prior consent in writing was obtained. To the contrary, the minutes show unequivocal objection by the plaintiff. Chung's thinking was that it was all a matter of negotiations. Further, all the impugned works were necessary for the purpose of the restaurant. I fail to see any reliance to the defendants' detriment.

116. As to acquiescence and waiver, rejecting the $5,000 toleration fee defence, I also fail to see what subsequent words or conduct of the plaintiff could have been taken to be condoning the impugned works, or that it is inequitable for the plaintiff to insist on the legal rights in the DMC. The matter must be looked at against the backdrop that plaintiff has raised an objection in the beginning, an extraordinary meeting of the IO was convened, legal advice on both sides were sought, and efforts to draft a formal agreement were suspended. I find against any acquiescence or waiver.

117. The defendants alleged that the installation of the insulation devices in Shop 32 amounted to acquiescence of the air-conditioning cooling tower. In view of my finding above, it is not necessary to deal with this point. In any case, the insulation related only to the noise issue, not the metal air hood at Shop 76. The position is clear from the minutes.

NEW SIGNAGES

118. I find against any allegation that Hsin Cheong had ever represented to the defendants that unless the IO raise any objection, the new signages were approved. The fact was there was neither approval in writing nor objection.

119. I agree with the obiter dictum of Li, DJ in Taikoo Shing (Management) Ltd v. Trillion (HK) Ltd (supra) that when explicit approval has not been given, the court must be slow to find waiver, acquiescence or estoppel on the basis of the silence or tardiness on the part of a manager of a private housing estate, bearing in mind the practical limit on resources available for the purposes of enforcement of the deed of mutual covenant. Although the question with the new signages was not so much resources and tardiness, it must be borne in mind that by mid-2001, the parties are already in litigation, and it is impossible that the plaintiff's stance that the green signage was without consent was unknown to the defendants.

WATER FLUSHING CHARGES

120. Mr Lai submitted that Chung only agreed to pay 15% of the water flushing charges. On the contrary, I find that he agreed to pay as per usage or "user to pay" principle. Now that the quantum is agreed, he must be taken to agree to pay that amount. Alternatively, I find that the defendants are liable to the water flushing charges by reason of the expansion of the toilets.

121. Mr Lai submitted that the increase in water flushing charges was not caused by the expansion of the toilets. There will be the same number of patrons using the toilets regardless of the cubicles. The less the number of cubicles simply means the longer the wait. Mr Lai likened the situation to the use of lifts. Residents on upper and lower floors share the costs of maintaining the lifts, notwithstanding that those on the upper floors must have made more use of the lifts.

122. Tam agreed that IO could not demand the charges by reason of the opening of the restaurant alone without the expansion of the toilets. It is non sequitur when there has in fact been expansion of the toilets. Mr T.S. Tam, defendants' expert agreed that toilets in a restaurant would be in more frequent use than in domestic units. I dare say it is so by reason of the higher consumption of beverages. The expansion of the toilets make it more convenient to use them, and it is more likely than not there will be more frequent use. I find that the increase in the water flushing charges is a direct result of the expansion of the toilet, which in itself is a breach of the DMC. The defendants are liable to reimburse the plaintiff as per the agreed quantum.

BREACHES OF THE DMC

123. I find that save and except the housing of the air-conditioning water cooling tower in Shop 76, the other impugned works are in breach of the DMC as mentioned:

(1)	Signages
	Clauses 4, 14, 19, 20 and 21 of Part A of Section IV;
	Clauses 1 and 2 of Part C of Section IV;
	Section 14 of Buildings Ordinance
(2)	Canopy and bulkhead
	Clauses 4, 14, 20 and 21 of part A of Section IV;
	Section 14 of Buildings Ordinance
(3)	Exhaust air duct
	Clauses 4, 13, 20 and 21 of Part A of Section IV;
	Clause 1 of Part C of Section IV;
(4)	Gas pipe
	Clause 14 and 15 of Part A of Section IV;
	Section 34I(1)(a) of Building Management Ordinance
(5)	Metal air hood
	Clause 21 of Part A of Section IV and Clause 1 of Section C of Section IV
(6)	Toilets
	Clauses 6, 14 and 25 of Part A of Section IV;
	Condition 28 of Crown Grant;
	Section 14 of Buildings Ordinance

REMEDY

124. Mr Lai submitted that even if there were breaches of the DMC, the court has a discretion whether to grant a mandatory injunction, and it should not be granted as the removal of the impugned works and restoration of the status ante is of little or no benefit to the plaintiff, but of huge if not devastating effect on the defendants. It would inevitably mean closure for business, and unemployment of the staff.

125. Mr Lai referred to referred to Shepherd Homes Ltd v. Sandham [1971] 1 Ch.340 where Megarry, J held that the principle stated by Lord Cairns LC in Doherty v. Allman (1878) 3 App.Cas.709 relating to the enforcement of a negative agreement by a prohibitory injunction did not apply to mandatory injunction in its full width but was tempered by a judicial discretion based upon whether granting the injunction would produce a fair result.

126. What Lord Cairns said in Doherty v. Allman at p.720 was :

"If parties, for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such case the injunction does nothing more than give the sanction of the process of the court to that which already is the contract between the parties. It is not then a question of the balance of convenience or inconvenience, or of the amount of damage or of injury - it is the specific performance, by the court, of that negative bargain which the parties have made, with their eyes open, between themselves."

127. Megarry J referred to the decisions of Sharp v. Harrison [1922] 1 Ch. 502 per Astbury J and Charrington v. Simons & Co. Ltd [1970] 1 W.L.R. 725 per Buckley J, and said at p.351 :

"I may summarise my conclusions as follows. First, Lord Cairns's statement of principle prima facie applies to mandatory injunctions; but it does not apply in its full width. The matter is tempered by a judicial discretion which will be exercised so as to withhold an injunction more readily if it is mandatory than if it is prohibitory. Even a blameless plaintiff cannot as of right claim at the trial to enforce a negative covenant by a mandatory injunction. Second, although it may not be possible to state in any comprehensive way the grounds upon which the court will refuse to grant a mandatory injunction in such cases at the trial, they at least include the triviality of the damage to the plaintiff and the existence of a disproportion between the detriment that the injunction would inflict on the defendant and the benefit that it would confer on the plaintiff. The basic concept is that of producing a 'fair result', and this involves the exercise of a judicial discretion."

128. Mr Lai referred to Morris v. Redland Bricks Ltd [1970] AC 652 where Lord Upjohn said at p.665-6 that :

"Every case must depend essentially upon its own particular circumstances. Any general principles for its application can only be laid down in the most general terms :

(1) A mandatory injunction can only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future. As Lord Dunedin said in 1919 it is not sufficient to say 'timeo'. [Attorney-General for the Dominion of Canada v. Ritchie Contracting and Supply Co. [1919] A.C. 999, 1005, P.C.]. It is a jurisdiction to be exercised sparingly and with caution but in the proper case unhesitatingly.

(2) Damages will not be a sufficient or adequate remedy if such damage does happen. This is only the application of a general principle of equity; it has nothing to do with Lord Cairns' Act or Shelfer's case [1895]1 Ch. 287.

(3) Unlike the case where a negative injunction is granted to prevent the continuance or recurrence of a wrongful act the question of the cost to the defendant to do works to prevent or lessen the likelihood of a future apprehended wrong must be an element to be taken into account:

(a) where the defendant has acted without regard to his neighbour's rights, or has tried to steal a march on him or has tried to evade the jurisdiction of the court or, to sum it up, has acted wantonly and quite unreasonably in relation to his neighbour he may be ordered to repair his wanton and unreasonable acts by doing positive work to restore the status quo even if the expense to him is out of all proportion to the advantage thereby accruing to the plaintiff. As illustrative of this see Woodhouse v. Newry Navigation Co. [1898]1 I.R. 161;

(b) but where the defendant has acted reasonably, though in the event wrongly, the cost of remedying by positive action his earlier activities is most important for two reasons. First, because no legal wrong has yet occurred (for which he has not been recompensed at law and in equity) and, in spite of gloomy expert opinion, may never occur or possibly only upon a much smaller scale than anticipated. Secondly, because if ultimately heavy damage does occur the plaintiff is in no way prejudiced for he has his action at law and all his consequential remedies in equity."

129. On the other hand, Mr Li for the plaintiff referred to Spry on Equitable Remedies (6th Edition, 2001) at p.547 :

"... In the case of mandatory injunctions the position is different in so far as the burden on the defendant that would be caused by the making of an order is often found to be greater than in the case where prohibitory injunction is in question. Indeed, it has been said, 'A mandatory injunction can only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future' (Redland Bricks Ltd v. Morris [1970] AC 652 at 665). But this view cannot be accepted without qualification, since it does not take account of cases where, for example, the apprehended damage to the plaintiff cannot be described as grave, but compliance on the part of the defendant, such as by removing a hoarding, would cause little if any inconvenience. In circumstances such as these a mandatory injunction ordinarily issues, in the absence of special circumstances such as laches or acquiescence. It is hence preferable to state generally that whenever an injury to the plaintiff is shown, being an injury that might, before it took place, have been enjoined by a prohibitory injunction if the court thought fit, a mandatory injunction may be granted unless consequent prejudice to the defendant is so disproportionate that that course is unjust in all the circumstances. Hence the extent of hardship that compliance with a mandatory injunction would cause the defendant and any other such matters are taken into account in determining, on the balance of justice, whether or not the particular relief that is sought should be granted rather than that the plaintiff should be confined to such remedies as he may have in damages. In analysing the authorities on these matters the early reluctance of courts of equity to grant mandatory injunctions should be borne in mind. In more recent cases this reluctance has been less evident, and mandatory injunctions have been granted with greater frequency, So in Kelsen v. Imperial Tobacco Co. (of Great Britain and Ireland) Ltd. [1957] 2 QB 334, the defendants were shown to have erected an advertising sign that projected into the airspace above the single storey shop owned by the plaintiff. It did not appear that the plaintiff had an intention to use that airspace in any particular way or that he suffered any grave injury or inconvenience through the continuance of the trespass. Indeed, it was observed by McNair J., 'It is true that the injury to the plaintiff's legal rights in this case is small. It has already been stated that this sign in his airspace does him no harm and does not diminish his enjoyment.' But nonetheless it was held that damages were not an appropriate remedy and that a mandatory injunction should issue. It should be noted that the balance of justice might have been different had, for example, more substantial considerations of hardship been established by the defendant."

130. Mr Li referred to JLW Management Services Ltd & Anor v. Chater Dragon Development Ltd [1995] 2 HKC 501 where the defendant encroached part of the office common area (the disputed area) and the plaintiff sought, inter alia, an injunction requiring the defendant to restore the disputed area and refrain from making further alterations to it. Findlay J said at p.507C-D :

"Of course, an injunction is a discretionary remedy, but it is one that should be granted where the defendant is continuing to breach an obligation undertaken in a deed of mutual covenant unless there are good reasons not to."

131. Mr Li complained that there is a lack of evidence of hardship save by way of submission of the likely effect of a restoration. It was also submitted that the defendants' conduct was appalling, to steal a march and present a fait accompli to the plaintiff and treat the DMC a matter of negotiations rather than compliance. The plaintiff was reactive and was willing to discuss, save when it learnt about the UBW, which might have implication of third party liabilities on the plaintiff as the IO.

132. Mr Li referred to Ta Xuong v. Incorporated Owners of Sun Hing Building [1997] 4 HKC 171 where the incorporation of owners were held liable for personal injuries to a workman resulting from the dilapidated state and dereliction and cluttering of obstacles of the external wall and scavenger lane of the building. The plaintiff fears that it may be liable to third parties as a result of injuries caused by the impugned works.

133. I have been referred to cases where the court has refused to grant a mandatory injunction notwithstanding breaches of the deed of mutual covenant. In incorporated Owners of Dragon View v. Nalpak Ltd. [1989] 1 HKC 549, the offending air-conditioning unit was minor alteration and could hardly be discerned and there was no effect on the appearance of the building. In Hon Hing Enterprises Limited v. Honolulu Land Investment Co. Ltd. HCA No.3357 of 1991, the offending door was simply larger in size than the one allowed in the deed of mutual covenant and it did not affect the general décor of the building. In Guardian Property Management Ltd. v. Lui Man Ho [1998] n2 HKC 244, there was delay of 13 years in enforcing against the offending iron gate, and there was no inconvenience to other users. The present case is very different from them.

134. From the nature of the works undertaken, I am prepared to infer that some expenses would be incurred in the restoration, save that the extent and time involved is unknown.

135. On the other hand, I must look at the nature of the impugned works. None of them is a minor or trivial item. The signages, canopy, the bulkhead and the toilets are all UBW and potentially liable to a building order, whereby retrospective approval will not be granted by the Building Authority without demolition first. There is no assurance as to the structural stability of metal air hood. The signages, canopy and bulkhead are structures projecting beyond the exterior of the building order areas when the public have access. The toilets have put additional burden to the existing pumping system, not to mention that breach of the Crown Grant may entail a right of re-entry under Condition 6. The letter of satisfaction for the exhaust air duct has not been issued and there is no assurance of the structural stability or safety. As to the gas pipe, there is no evidence of approval from the gas company. I must bear in mind that town gas is inherently dangerous, both as to toxicity and inflamability.

136. I am satisfied that the plaintiff's fear that if not remedied, the impugned works may accrue to it damage or liability in the future is real and probable. No undertaking has been offered to allay the fear of the plaintiff. I am satisfied that damages are not appropriate or sufficient remedy.

137. In the final balance of all the relevant factors, including the relationship between the parties, I am satisfied that a mandatory injunction should be granted as follows :

(1) to remove the signages;

(2) to remove the canopy;

(3) to remove the exhaust air duct;

(4) to remove the gas pipe;

(5) to remove the metal air hood;

(6) to remove and restore the male and female toilets and the attendant plumbing, drainage and/or sewerage pipes.

138. I shall also order the defendants to pay to the plaintiff the sum of $40,765.85 under paragraph (a) of the consent order made herein on 28 November 2002 and such further sum to be calculated in accordance with paragraph (b) therein.

COSTS

139. Mr Li asked for costs, if any, to be given on higher than the party and party basis on the ground that the defence was hopeless if not frivolous.

140. The defendants have lost on all points except on nuisance caused by the air-conditioning cooling tower and the clogging of the drainage. The time and efforts spent on these items is negligible. Subject to any costs order previously made, the plaintiff should be entitled to costs of the action.

141. Save for the consent order eventually made on quantum of the water flushing charges, the conduct of the defence at trial has been somewhat prolix and overreaching. However, I do not find it to be abusive, or dilatory and uncooperative, or there be any special reason for a higher scale. I shall order that costs nisi be on the party and party basis.