SINO ESTATES MANAGEMENT LTD v. WONG PAK SUM AND OTHERS

[ENGLISH TRANSLATION – 英譯本]
CACV 50/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 50 OF 2008

(ON APPEAL FROM LDBM NO. 68 OF 2007)

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J U D G M E N T

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Hon Cheung JA (giving the judgment of the Court):

1.  The Applicant is the manager of a multi-storey building known as ‘Kwun Tong Harbour Plaza’ (hereinafter ‘the Building’). The present case concerns the ground and mezzanine floors of the Building.

2.  The Applicant alleged that the Respondents had, in breach of the Deed of Mutual Covenant of the Building, placed furniture and sundry items along the corridors and passageways on the ground and mezzanine floors. He applied to the court for an injunction restraining the Respondents from placing furniture and sundry items along the corridors and passageways.

3.  Having heard the case, Deputy Judge Frankie Yiu of the Lands Tribunal ruled in favour of the Applicant and made an order restraining the Respondents from occupying the corridors and passageways in question. The 1^st Respondent now appeals against the ruling of Judge Yiu.

Background

4.  In September 2003, three owners of the Building (i.e. Yesland Ltd, Sunco Group Ltd and Octerworth Enterprises Ltd (hereinafter ‘Octerworth’)) leased some of the units on the ground and mezzanine floors, as well as the entire 1^st and 2^nd floors, to the 2^nd Respondent. Subsequently, disputes arose among the parties over the tenancy, and the three owners applied to the Court of First Instance for repossession of the leased premises.                            

5.  In 2005, the 2^nd Respondent voluntarily surrendered possession of the 1^st and 2^nd floors to the Applicant. In June 2006, the Court of First Instance gave judgment against the 2^nd Respondent, holding that the owners were entitled to repossess the units on the ground and mezzanine floors. In September 2006, the bailiffs executed the possession order. The 1^st Respondent then removed the furniture and sundry items that had been placed inside the leased units on the ground and mezzanine floors and placed them along the corridors and passageways outside those units.

6.  The 1^st Respondent was a director of the tenant (i.e. the 2^nd Respondent) of the aforesaid units. In mid December 2007, the court made a winding-up order against the 2^nd Respondent.

7.  The 3^rd Respondent was the tenant of one of the units (i.e. Unit M03) on the mezzanine floor. The 1^st Respondent was also a director of the 3^rd Respondent. Unit M03 was leased by the 5^th Respondent to the 3^rd Respondent.

8.  The 1^st and 4^th Respondents were the same person. He was a sole proprietor trading in the name of B. G. Lamparas. From 2003 to 2007, the firm carried on business at two units (i.e. Unit M03, and then Unit M88) on the mezzanine floor of the Building.  

9.  According to the tenancy agreement between the owners and the 2^nd Respondent in respect of the ground and mezzanine floors, the locations of the leased units are shown in two plans (Plan A). The locations of the individual units on the ground and mezzanine floors are also shown in the revised building plans for Ground Floor and Mezzanine Floor approved by the Building Authority.

10.  On the Applicant’s case, when the bailiffs executed the possession order, the premises leased to the 2^nd Respondent were not laid out in a way that could indicate the locations of the various units as mentioned above. In any event, however, the Applicant claimed that the Respondents had placed furniture and sundry items at locations which were marked as the corridors on the plans.

11.  Judge Yiu ruled that the corridors were common areas of the Building and that the Applicant, being the manager of the Building, was entitled to apply to the court for an injunction against the Respondents and an order requiring them to remove the furniture and sundry items that they had placed in the common areas.

Grounds of appeal

12.  The 1^st Respondent argues that Judge Yiu had wrongly relied on the approved building plans. We do not agree. The Deed of Mutual Covenant (‘the Deed’) of the Building was executed on 10 November 1988, and the approved plans were signed and issued on 19 April 1998. There was no evidence to show that the plans approved by the Building Authority had been replaced by any other approved plans. As the approval date of the plans was in close proximity to the date of execution of the Deed, these documents were contemporaneous documents, and the Court was entitled to refer to the approved plans in construing the provisions of the Deed. These plans were the best evidence of the presence and locations of approved corridors and passageways on the ground and mezzanine floors.   

Common areas

13.  The 1^st Respondent contends, for the following reasons, that the corridors in question were not part of the common areas:

(1) According to the Deed, Octerworth is the owner of the Building. On the day the Deed was executed, Octerworth also assigned Unit No. 15 on 1^st floor of the Building to a purchaser. The Deed clearly states that there are ‘reserved areas’ in the Building, and the term ‘reserved areas’ is defined in the Deed as all parts of the Building not otherwise reserved for the Hong Kong Government or other public organizations or public use or assigned to an individual owner for his exclusive use. The ‘reserved areas’ are owned by Octerworth.

“Reserved Areas” shall mean all parts of the Building constructed or to be constructed not otherwise specifically reserved for the Hong Kong Government or other Government Authorities or public use by the Crown Grant or assigned for the exclusive use of any one Owner but reserved for use by the Registered Owner not in contravention with the provisions of this Deed.

(2) According to Clause 8(A)(c) of the Deed, Octerworth has the right to designate the ‘reserved areas’ as ‘building common areas’. If Octerworth decides to designate the ‘reserved areas’ as ‘common areas’, then, pursuant to Clause 8(B)(a) of the Deed, Octerworth has to publicize its decision on the notice board of the Building for 30 days.

(3) The 1^st Respondent argues that the corridors on the ground and mezzanine floors were part of the ‘reserved areas’ that were vested with Octerworth by the Deed, and that there was no evidence that Octerworth had designated those ‘reserved areas’ as ‘common areas’. Therefore, the corridors in question still belonged to Octerworth, and the Applicant, as the manager of the Building, had no right to manage the corridors which were land owned by individual owners.

Our opinion

14.  We do not agree with this argument. We do not think that Octerworth has to designate the corridors, being the ‘reserved areas’ that it owns, as ‘common areas’ before the court may regard the corridors as ‘common areas’. This is because, according to the definition of ‘Building Common Areas’ in the Deed, ‘common areas’ include not only ‘reserved areas’ which have been converted to ‘common areas’, but also ‘pedestrian walkways’.

“Building Common Areas” shall mean the areas of the Reserved Areas as shall from time to time be designated Building Common Areas by the Registered Owner in accordance with the provisions of this Deed and shall include but not limited to Pedestrian Walkway (if any), the Service Lifts, its Lift Shafts and its Motor Rooms, the Water Tank, Transformer Rooms, Meter Room, etc.

15.  In the present case, the corridors are plainly pedestrian walkways within the meaning of the Deed. It follows that, even if these pedestrian walkways are also part of the ‘reserved areas’, it does not mean that Octerworth has to designate them as ‘common areas’ before it can pass those areas on to the Applicant for management.

16.  Furthermore, according to the aforesaid definition of ‘reserved areas’, the ‘reserved areas’ should not contradict any other provisions of the Deed. Pursuant to Clause 8(B)(b)(iii) of the Deed, any area reserved by Octerworth shall not unreasonably obstruct any owner or his tenants’ or users’ reasonable access to his units.

8(B)(b)   Notwithstanding the provisions of Clause 8(A) above, the reservation by the Registered Owner of the Reserved Areas and the rights and privileges therewith shall not in any way:

(i) --; or

(ii) --; or

(iii) unreasonably impede or obstruct any Owner’s or his tenants’ licensees’ occupiers’ and customers’ reasonable access to his Unit or Units.

17.  The said corridors form the means by which the owners or tenants of the Building have access to their respective units. This serves to support the argument that even if the corridors fall within the ‘reserved areas’ owned by Octerworth, they are also the ‘common areas’ within the meaning of the Deed.     

Building Management Ordinance

18.  The above determination in respect of the ‘common areas’ is also consistent with the following definition of ‘common parts’ in the Building Management Ordinance (hereinafter ‘the Ordinance’) (Cap. 344 of the Laws of Hong Kong):

(a) the whole of a building, except such parts as have been specified or designated in an instrument registered in the Land Registry as being for the exclusive use, occupation or enjoyment of an owner; and

(b) unless so specified or designated, those parts specified in Schedule 1;

Under Schedule 1, ‘common parts’ include:

2.   Walls enclosing passageways, corridors and staircases.

…

8.   Passageways, corridors …

19.  The provisions in the Deed regarding ‘reserved areas’ and ‘building common parts’ have to be read together for the purpose of ascertaining the precise extent of the ‘reserved areas’. Therefore, it is not the case that all the ‘reserved areas’ of the Building that Octerworth owns are for its exclusive use, occupation or enjoyment. On the abovementioned definition of ‘building common parts’ in the Deed, the corridors and passageways are not for the exclusive use, occupation or enjoyment of Octerworth. They are therefore ‘common parts’ within the meaning of the Ordinance.

Past tenancy

20.  The 1^st Respondent alleges that since 1989, the owners of the ground and mezzanine floors had leased the entire two floors to a tenant for use as a supermarket, and there was no corridor on the two floors as shown in the approved plans. This, it is submitted, shows that the corridors in fact belonged to the owners and were not common areas over which the Applicant had management and control.

21.  We do not agree. The fact that the owners have leased out the corridors which include the ‘common areas’ does not mean that the corridors are not ‘common areas’. Similarly, the fact that the other owners in the Building have over the years never objected to the leasing out of the common areas by the owners of the ground and mezzanine floors does not mean that the corridors are not common areas. In the end, it is for the court to construe the relevant clauses of the Deed by reference to the provisions of the Deed (see paragraph 12 above for details).

22.  The 1^st Respondent also alleges that when the 2^nd Respondent rented the ground and mezzanine floors, the plan (i.e. Plan B) that he received in respect of the rented units also indicated that the areas where the corridors were located were rented to the 2^nd Respondent at the same time. This, it is submitted, also serves to support the argument that the corridors belonged to the owners and did not form the common parts of the Building.

23.  We refuse to accept his argument for the same reason as that set out above. In any event, even if the 2^nd Respondent had rented the area where the corridors were located, the owners terminated the relevant tenancy in 2006.

Other matters

24.  In support of its application for an order requiring the Respondents to remove the furniture and sundry items placed in the corridors, the Applicant has also relied on the House Rules set out in the 3^rd Schedule to the Deed. The relevant provision is:

9. No Owner or occupier shall use the corridors, staircases or other common parts of and in the Building for the purpose of drying laundry or hanging or placing or storing any dustbins, garbage, cans, furniture, machinery, goods or chattels or other things thereon or therein.

25.  As we have held that the corridors in question are ‘common parts’, it is not necessary for us to rule on the issue of whether, pursuant to clause 9 of the House Rules, the Applicant merely has to prove, for the purpose of making the application, that the articles in question have been placed along the corridors, without having to prove that the corridors are ‘common parts’.

Conclusion

26.  In our judgment, the decision made by Judge Yiu is correct. The appeal by the 1^st Respondent is dismissed with costs accordingly.