富嘉花園業主立案法團 v. IN SMART LTD AND ANOTHER

LDBM 185/2022

[2025] HKLdT 18

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO.185 OF 2022

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J U D G M E N T

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A.  Introduction

1.  The Applicant (IO) is the Incorporated Owners of the Grandway Garden (富嘉花園) (the Estate) incorporated pursuant to the provisions of Building Management Ordinance, Cap.344 (BMO), on 8 September 1994. Mr Brian Lo of counsel (Mr Lo) appeared for IO.

2.  The Estate is built on Sha Tin Town Lot No.289 (the Lot) granted by the Government by way of New Grant No.12159 (the Grant). The Estate and the Lot was governed by a deed of mutual covenant dated 28 March 1989 registered at the Land Registry (the DMC).

3.  The 1^st Respondent company (R1) became the registered owner of Shop 7 on the ground floor of the Estate (Shop 7) by an assignment dated 26 March 2015 (R1’s 2015 Assignment) and has remained so until trial. The 2^nd Respondent (R2) is Madam Jackie Luk. Ms Lily Yeung of counsel (Ms Yeung) appeared for R1 and R2.

4.  R1 and R2 in their respective Amended Notice of Opposition and Notice of Opposition settled by the same counsel[1] admitted paragraph 2 of IO’s Amended Notice of Application.

5.  By the said paragraph 2 of Amended Notice of Application, IO alleges that, at all material times, R2 has occupied using Shop 7 as a fruit shop with particulars as follows:

(1)  By a tenancy agreement dated 11 March 2021 (R2’s 2021 Tenancy Agreement) executed by R1 and R2, Shop 7[2] was let by R1 to R2 for 2 years from 10 March 2021 to 9 March 2023.

(2)  By another agreement dated 5 March 2023 executed by R1 and R2 (R2’s 2023 Tenancy Agreement), the said lease of Shop 7[3] was renewed for 2 years from 10 March 2023 to 9 March 2025.

Hence, according to the said paragraph 2, R2 has at all material times been tenant of Shop 7.

6.  On 8 December 2022, IO commenced these proceedings at Lands Tribunal against R1 and R2 for alleged breaches of the DMC and BMO, seeking against them mandatory injunction, prohibitory injunction, damages for breach of the DMC and costs.

B.  IO’s Case

7.  In its Amended Notice of Application, IO’s case is that the all passageways (行人通道) within the Estate (the Passageways) are “common parts” of the Estate under Schedule 1 of BMO and the definitions of the DMC.

8.  Since about November 2021, R1 and/or R2 (using Shop 7 with express and/or implied consent of R1), has/have, in alleged breach of, among others, clause 14 of Subsection A of Section IV of the DMC (Clause 14),

(1)  allegedly placed goods and sundries on the Passageway outside Shop 7 for its/her business or private use;

(2)  allegedly occupied the Passageway outside Shop 7 such as to cause nuisance to the other owners and occupiers of the Estate; and

(3)  allegedly allowed the above actions having been taken.

9.  Further or alternatively, the above actions of R1 and/or R2 are, IO says, in breach of s.34I of BMO in that the Passageway outside Shop 7:

(1)  has allegedly been converted to one’s own use without consent of the manager of the Estate; and

(2)  has allegedly been used and/or permitted to be used in such a manner as unreasonably to interfere with the use and enjoyment of the said passageway by other owners and occupiers of the Estate.

C.  Case of R1 and R2

10.  In their Amended Notice of Opposition, and Notice of Opposition, respectively, R1 and R2 do not admit that the Passageways are “common parts” of the Estate as alleged.

11.  R1 in its Amended Notice of Opposition avers that it did not expressly or impliedly consent to R2 to act in contravention of the DMC.

12.  Both R1 and R2 averred that R2 placed, and places, her goods and sundries, which are movable, outside Shop 7B at ground floor of the Estate (Shop 7B) during business hours and kept, and keeps, the goods and sundries inside the shop thereafter, causing no nuisance to the other owners or occupiers of the Estate.

13.  If the area in question is “common parts” as alleged, R1 and R2 do not admit that their use thereof constitute(s) breach of Clause 14.

14.  If R1 and/or R2 is/are found to have breached the DMC, IO, said R1 and R2 in their respective Amended Notice of Opposition and Notice of Opposition, has acquiesced to R1 and/or R2’s breaches. The particulars of acquiescence provided are that: -

(1)  at least since the 1990s (and at the latest since 2015 for R1, or at the latest since 2021 for R2), “nearly all, if not all, of the other owners or occupiers of the ground floor units of [the Estate] have committed similar breaches”; and

(2)  IO has never taken any objection or enforcement action or proceedings against all the aforesaid owners and/or occupiers.

(3)  In the circumstances, it is “unjust and/or inequitable to grant injunctive relief against R1 and/or R2”.

15.  If R1 and/or R2 is/are found to have breached BMO, it is averred in their respective Amended Notice of Opposition and Notice of Opposition that IO has acquiesced to R1 and/or R2’s breaches. The above paragraph regarding acquiescence to R1 and/or R2’s breaches of the DMC is repeated.

16.  Both R1 and R2 finally deny that IO is “entitled to any of its claimed reliefs or any relief at all” against them.

D.  Issues to be resolved

17.  Considering parties’ case at section C above, it is, I think, necessary for this Tribunal to resolve the following issues, namely: -

(1)  Whether the Passageway outside Shop 7 is “common parts” under BMO and the DMC or not? (Issue 1)

(2)  Have R1 and R2, since about November 2021, acted in contravention of Clause 14 as alleged? (Issue 2)

(3)  Have R1 and R2, since about November 2021, been in breach of s.34I of BMO as alleged? (Issue 3)

(4)  Has IO acquiesced breaches of Clause 14 and/or s.34I of BMO committed by R1 and/or R2 such that it is unjust and/or inequitable to grant injunctive relief in IO’s favour? (Issue 4)

(5)  Is IO entitled to the reliefs it sought in Amended Notice of Application? (Issue (5))

E.  Assessment of witnesses called at trial

E1.  Leung

18.  IO called Mr. Leung (梁堅強) (Leung), assistant property officer of its management office, to testify.

19.  As shall be seen, Leung’s evidence suffers from one limitation. He only joined the management of the Estate in 2016. Thus, he has no personal knowledge of events happening within the Estate beforehand.

20.  Nonetheless, Leung claimed in the box that the management of the Estate has documents of other legal proceedings about G/F shops commenced prior to 2016 but they are not produced. He purportedly explained that, as he only joined the Estate in 2016, it was not appropriate for him to produce them. This explanation is, I think, unconvincing. Had those alleged documents existed, Leung could, I think, equally produce them into evidence at trial. I cannot accept this piece of evidence from Leung as Ms Yeung has submitted.

21.  Leung was also cross-examined by Ms Yeung on the number of complaints received by the manager of the Estate and IO about placing of merchandises and goods at the Passageway outside G/F shops of the Estate. He only produced at trial documents proving two instances, one by an owner in May 2024 and the other by four owners in July 2024. Again, he claimed to have received other similar complaints from owners but they were not produced either. I am, however, prepared to accept Leung’s evidence on this point for trial evidence disclosed that IO had taken proceedings against different G/F shop owners of the Estate starting from 2016 and had formed a task force to take enforcement action starting February 2024. It is, I think, likely that IO and the manager of the Estate took out these actions due to other owners’ complaints made to them prior to May 2024.

22.  Subject to a few points to be addressed below, the rest of Leung’s evidence is either unopposed or non-controversial, or supported by documentary evidence produced by IO. I am prepared to accept them and give such weight to them as they deserve.

E2.  R2 & Choi Senior

23.  R2 took to the witness stand after Leung finished his evidence.

24.  Afterwards, one director and shareholder of R1 i.e. Mr Choi Hon Lun (蔡漢粦) (Choi Senior) was called to testify (another director of R1 that appeared on documents produced at trial is his younger brother Mr Choy Hon Ping).

25.  I am afraid I do not find R2 or Choi Senior witness of truth. They both impress me as incredible and unreliable witness for the following reasons.

26.  They both gave, I think, misleading evidence that seeks to confuse the reader and this Tribunal. Both claimed that as much as “2m” remain for one to move around after goods were placed at the Passageway outside Shop 7. However, that 2m width is, as R2 later admitted, open government land/pavement that does not belong to owners of the Estate (i.e. not within the Lot).

27.  Regarding the so-called “common practice”[4] they both gave evidence, what matters, I think, most is the adverse effect, if any, goods and sundries placed on the Passageways had on residents and occupiers of, and visitors to, the Estate in the daytime when such persons are expected to be passing by. What happened in the nighttime when there is neither resident nor visitor around as claimed by Choi Senior and R2[5] is, I think, neither here nor there.

28.  Like Leung, Choi Senior also sought to give evidence of alleged “common practice” as early as in the 1990’s when he admittedly first came into picture to purchase Shop 7 only in 2015. He purportedly gave evidence on matters beyond his personal knowledge.

29.  The Google street photos R1 produced[6] and Choi Senior relied (and R2 also relied) in witness statement to support alleged 1990’s “common practice” are all, I must say, daytime photos and they do not show nighttime situation as claimed.

30.  Choi Senior’s so-called further support for such alleged “common practice” by way of alleged enquiries with nearby shop user(s) and estate agent(s) is, I must say, all “hearsay” with their source(s) “wholly unknown”. I cannot but give no weight to all such pre-2015 evidence given by Choi Senior.

31.  Even one takes to their highest what were captured by those Google street photos produced in the daytime in the years before 2015, they captured, I must stress, what happened on one single day in 2009 and another single day in 2011 (see below). Due to the limited number of years and dates these photos were taken, they could not, I think, prove continuous “common practice” over the years since 2009 as alleged by Choi Senior or by R2.

32.  Neither do these Google street photos show that “nearly all (if not all)” G/F shops occupants of the Estate placed goods at the Passageways in the daytime. They are all photos of G/F shops facing Mei Tin Road. Those shops occupants that practised the so-called “common practice” captured by them are limited to, one notes, no more than 7 shops facing Mei Tin Road.

33.  There are, I should stress, as many as 31 G/F shops at the Commercial Development of the Estate. R1 (and R2) produced no evidence of similar practice by G/F shops facing Tai Wai Road. Indeed, some photos of Shop 7B and other G/F shops facing Tsuen Nam Road produced by IO[7] positively showed that other shops facing Tsuen Nam Road did not have such practice[8] (see below for layout of the Estate) (the analysis in this paragraph applies with equal force, I think, to such evidence of alleged “common practice” given by R2 before she became tenant of shops at the Estate.)

34.  Indeed, evidence of alleged “common practice” and many other allegations in Choi Senior’s witness statement, including alleged acquiescence on the part of IO, were not raised at all in R1’s 2/4/2019 Letter to LT re 2018 Action (signed by Choi Senior), in R1’s Former Solicitors’ Letter dated 25/1/2022, or in R1’s Notice of Opposition filed by Choi Senior in person in January 2023 (see below). These many allegations of Choi Senior only surfaced, I note, for the first time in R1’s Amended Notice of Opposition filed by its solicitors as late as in January 2024 i.e. 7 months before trial.

35.  At one stage in the box, Choi Senior also gave evidence of R2 being tenant of G/F shop of the Estate as far back as 1996. With respects, that goes beyond, and is contracted by, evidence of R2, who said in her witness statement that she started renting Shop 7A of ground floor of the Estate (Shop 7A) selling fruit back in 2011 only (at the same time, R2 surprisingly made no reference of her renting Shop 7A at all in her Notice of Opposition settled by counsel).

36.  At the same time, R2’s evidence is also contradicted by contemporaneous documents. For instance, while she produced a business registration of a fruit business in name of Kam Nga Fresh Fruit (金雅鮮果) at Shop 7 as from 6 April 2011, she referred to her renting Shop 7A selling fruit as from 2011 in her witness statement. However, on documents produced at trial (and on Choi Senior’s evidence), Shop 7 was rented by R1 to one Tsui Ka Ping (徐家平) (Tsui) between September 2015 and March 2019. I cannot but reject R2’s contrary evidence in this respect in her statement and in the box.

37.  For similar reason, I also reject R2’s evidence in the box that she has continuously rented Shop 7A from 2011 until today. Plainly, Choi Senior on behalf of R1 had granted a licence of Shop 7A to Wong Wai Ming (黃偉明) (Wong) from November 2022 to May 2023. After Mr Lo referred to the said licence agreement in his cross-examination, R2 had no choice but to admit that she herself did not rent Shop 7A between November 2022 and May 2023.

38.  Furthermore, R2 gave incredible evidence by insisting under cross-examination that certain alleged footpath remains on the ground that allows pedestrians to move around inside the Passageway outside Shop 7 when fruit and boxes had been heavily and closely stacked together to its outer limit i.e. up to the drain covers on the ground facing Tsuen Nam Road (see below). On photos produced at trial before this Tribunal, any footpath alleged by R2 that remains, if at all, must be very narrow. Maneuver that pedestrians can allegedly make, if any, must also be very limited.

39.  Neither did Choi Senior nor R2 tell, I think, the whole truth to this Tribunal. For example, for likely, I think, tactical reason, R2 made no mention in her witness statement of occupying Shop 6 as a tenant and her moving away as a result of the 2019 Proceedings taken out by Bridge, which in turn was caused by 2018 Action against Bridge taken out by IO (see below).

40.  While R1 had, as Choi Senior said in his letter dated 1 August 2023 to IO’s solicitors, recovered possession of Shop 7A from Wong, Choi Senior had at the same time hidden in the said letter the material facts that R1 had thereafter let it to R2 until he gave evidence in the box (see below).

41.  Choi Senior’s evidence is also, I think, inconsistent with contents of R1’s own documents. Choi Senior claimed of not receiving letter dated 31 December 2021 from IO’s solicitors and of not knowing IO’s claim of placing goods and merchandise at the Passageway outside Shop 7 done in contravention of the DMC. But he was contradicted, and embarrassed, at once on both points when Mr Lo referred Choi Senior in his cross-examination to R1’s Former Solicitors’ Letter dated 25/1/2022 (see below).

42.  Plainly, contrary to Choi Senior’s claim of IO’s lack of enforcement until February 2024 in his witness statement, IO had in the past enforced (or sought to enforce) the DMC regarding goods and sundries placed at the Passageway outside Shop 7 against R1 and its tenant by way of 21/9/2015 Warning Letter and 2018 Action (see below). And, according to order made by Lands Tribunal in 2018 Action, R1 was jointly and severally ordered to pay costs of IO by its consent, contrary to Choi Senior’s denial in his witness statement (see below).

43.  Hence, unless otherwise stated below, I do not accept evidence given by R2 or by Choi Senior save those that are unopposed or non-controversial.

44.  In the event R2 and Choi Senior made admissions consistent with IO’ case, I give such admissions full weight and act on them accordingly.

F.  Facts proven at trial

45.  I find the following facts proven from admissions in R1’s Amended Notice of Opposition, admissions in R2’s Notice of Opposition, indisputable documentary evidence, unopposed factual evidence, and oral admissions given by parties’ witnesses, including R2 and Choi Senior, called at trial.

F1.  Conditions of the Grant

46.  According to the Grant, the Lot, located at Tai Wai, Sha Tin, is about 8,666 square metres in area and is “delineated and shown coloured pink, pink hatched black and pink crossed black (underline and italics supplied)” on a plan annexed to the Grant (the Lot Plan).

47.  Looking at the Lot Plan, the Lot is rectangular in shape. Its 4-side boundary is marked, among others, by points A to H. Tsuen Nam Road, and the railway, is to the Southeast of the Lot. Mei Tin Road is to its Southwest. Grendeur Estate is located to its Northwest. And Tai Wai Road is found at its Northeast.

48.  Special Conditions (11) of the Grant headed “Construction of a walkway” read as follows:

“(a) The Purchaser shall … at his own expense … construct … a continuous covered walkway on the area shown coloured pink cross-hatched black on the plan and shall thereafter at his own expense maintain the walkway in good condition and to the satisfaction of the Director.

(b) The Purchaser shall at all times during the day or night throughout the term hereby agreed to be granted permit all members of the public for all lawful purposes freely and without payment of any nature whatsoever to pass and repass on foot over and along the Walkway.

(c) The right to pass or repass referred to in sub-clause (d) of this Special Conditions is a right of pedestrian passage only and no vehicle shall have any right of access to or passage over the Walkway.

(d) The Purchaser shall not place or allow or suffer to be placed any merchandise, goods, stalls, carts or any other articles of any nature whatsoever on or within the Walkway or any part thereof. In the event of any merchandise, goods, stalls, carts or any other articles of any nature whatsoever being placed on or within the Walkway then … it shall be lawful for the Director … to forthwith remove such merchandise, goods, stalls, carts or other articles from the Walkway or any part thereof to such other place and by such means… and the Grantee shall pay to the Government on demand the costs… of removing any such merchandise, goods, stalls, carts or any other articles… (bold and italics supplied)”.

49.  On the Lot Plan, the said “covered walkway” in Special Conditions (11) above is a U-shaped narrow strip of land at the boundary of the Lot facing Mei Tin Road, Tsuen Nam Road and Tai Wai Road and marked by points F to E, E to D, and D to A (the Covered Walkway). Put another way, it is, as shall be seen, the margin between 31 ground floor shops of the Estate and the outermost boundary of the Lot.

F2.  Material provisions of the DMC

50.  The DMC includes the following definitions, namely: -

“Block’s Common Areas” shall mean and include the entrances and halls, lift lobbies, staircases, corridors, landings passages and the exterior walls of each Block and the space on the roof where the water pipes, drains, wires, cables, lift machine rooms and other mechanical rooms are installed, attached or erected and any other spaces on the roofs the use of which is not reserved to any Owner to the exclusion of other Owners.

“Car Ports” shall mean all of the car parking spaces on Ground Floor, 1^st to 5^th Floors (inclusive) of the Car Port Building in the Estate in accordance with the Plans.

“Commercial Development” shall mean all the structures erected or in the course of erection on parts of ground floor in the Estate intended for commercial use and the Cart Ports in accordance with the Plans.

“Commercial Unit” shall mean any part of the Estate which is intended for separate occupation and/or use for commercial purposes only and shall include the Car Ports if applicable.

“Conditions” shall mean the General and Special Conditions of Sale dated the 24^th day of March 1987 and registered in the District Land Office Sha Tin as New Grant No.12159 as varied or modified by a Modification letter registered in the said District Land Office by Memorial No.382295.

“Each Block” shall mean each of the said three residential buildings known as Blocks “1”, “2” and “3”.

“Estate’s Common Areas” shall mean the communal areas of the Estate and include:-

(a) The main entrance to and exit from the Estate including the main gate (if any).

(b) The main access road within the Estate.

(c) The boundary fences and gates (if any).

(d) The gardens, lawns, open space flower beds and planter boxes.

(e) Footpaths, steps and staircases not within each Block.

(f) Driveways and pavements.

(g) The children’s playgrounds.

(h) The other open spaces and areas not otherwise designated for any particular purposes.

(i) The Estate Office or Offices.

(j) The Central Garbage Disposal area.

(k) The pedestrian walkways.

(l) The loading and unloading areas.

(m) Those other parts of the Estate intended for the common use and benefit of all the owners and/or persons using or visiting the Estate in accordance with this Deed.

“Estate” shall mean the whole of the development known as GRANDWAY GARDEN (富嘉花園) constructed or in the course of construction on the Land including but not limited to all machinery and equipment in or upon the Land all foundations, roads, footpaths, footbridges, stairway, cables, pipes, drainage, sewerage and other structures, facilities or services installed in, under, on or over the Land for the use and benefit of the Estate or any part or parts thereof.

“Land” shall mean … Sha Tin Town Lot No.289.

“Owners” shall mean the owners of undivided shares and registered as such under the Land Registration Ordinance and their chargees or mortgagees in possession or one who has foreclosed including joint tenants or tenants in common.

“Plans” shall mean the plans for the development of the Land drawn up by Messrs. Chows Architects and Partners and approved by the Director of Buildings and Lands under the Conditions and the Building Authority under B.O.O. Reference No. BLD (B) 2/9045/87 (P) 661 as the same shall from time to time be amended.

“Residential Development” shall mean those three residential buildings erected or in the course of erection in the Estate in accordance with the Plans (bold and italics supplied).”

51.  In recital (2), the Lot and the Estate were notionally divided into 43,667 equal undivided shares as set out in the First Schedule. First Schedule in turn allocates different number of undivided shares to each of:

(1)  Flats A to M of 1^st to 24^th Floor of Block 1;

(2)  Flats A to M of 1^st to 24^th Floor of Block 2;

(3)  Flats A to M of 1^st to 24^th Floor of Block 3;

(4)  Shops No.1 to 31 of Commercial Development; and

(5)  260 car-parking spaces in the Car Port Building.

52.  Clause 1 in Section I sets out the exclusive use areas of the “Registered Owner” of the DMC. It reads: -

“The Registered Owner shall at all times hereafter subject to and with the benefit of the Conditions have the full and exclusive right and privilege to hold use occupy and enjoy to the exclusion of the First Purchaser All Those Residential Units Commercial Units and Car Ports of the Estate save and except only the said Flat M on 17^th Floor of the said Block 1 of the Estate assigned to the First Purchaser… (italics supplied)”

53.  Clause 2 in Section I sets out the exclusive use areas of the “First Purchaser” of the DMC. It reads:

“The First Purchaser shall at all times hereafter subject to and with the benefit of the Conditions have the full and exclusive right and privilege to hold use occupy and enjoy to the exclusion of the Registered Owner All That the said Flat M on 17^th Floor of the said Block 1 of the Estate…”

54.  Section II is headed “Easements, rights and privileges the benefit of which is held with each (residential or commercial) undivided shares of and in the Land and the Estate”.

(1)  Subsection A deals with “Residential Shares”. Its clause 1 provides that the “Owner of each Residential Share” shall have:

“Full right and liberty for the Owner for the time being his tenants, servants, agents and licensees (in common with all persons having the like right) to go, pass and repass over and along and use the Block’s Common Areas for all purposes connected with the proper use and enjoyment of his Residential Unit in that Block…(italics and bold supplied)”.

(2)  Clause 2 of Subsection A provides that the “Owner of each Residential Share” shall have:

“Full right and liberty for the Owner for the time being his tenants, servants, agents and licensees (in common with all other persons having the like right) to go, pass and repass over and along and use the Estate Common Areas and Common Facilities save those specifically reserved herein for all purposes connected with the proper use and enjoyment of the Residential Unit owned by the Owner… (italics and bold supplied)”

(3)  Subsection B deals with “Commercial Shares”. Its clause 1 provides that the “Owner of each Commercial Share” shall have:

“Full right and liberty for the Owner for the time being his tenants, lessees, servants, agents and licensees (in common with all other persons having the like right) to go, pass and repass over and use the Estate Common Areas and Common Facilities for all purposes connected with the proper use and enjoyment of his Commercial Unit …(italics and bold supplied)”

55.  Section IV is headed “covenants, provisions and restrictions to be observed and performed by the owners”. Subsection A is “provisions applicable to all owners”.

(1)  Its Clause 8 (Clause 8) reads:

“Each Owner shall be responsible to the other Owners for the acts omissions of all persons occupying with his consent expressed or implied any part or parts of the Estate owned by him … (italics and bold supplied)’’

(2)  Its clause 10 (Clause 10) reads:

“No Owner shall do or permit or suffer to be done and each Owner will take all possible steps to prevent his tenants, occupiers or licensees from doing any act, deed, matter or thing which will in any way interfere with or affect or which is likely to interfere with or affect the management and the maintenance of the Estate as herein provided (bold and italics supplied)”.

(3)  Its Clause 14 (i.e. Clause 14) reads:

“No part of the Block’s Common Areas and the Estate’s Common Areas shall be obstructed or incumbered nor shall any refuse or other matter or things be placed or left thereon nor shall any part of such Common Areas be used for any business or private purpose and no Owner will do or suffer or permit to be done anything in such Common Areas as may be or become a nuisance or cause annoyance to any other Owners or occupiers of the Estate. (bold and italics supplied)”

(4)  Subsection B are “provisions applicable to owners of residential shares only”. Its Clause 6 reads:

“No part of the Block’s Common Areas shall be obstructed or incumbered nor shall any refuse matter or other thing be placed thereon nor shall any part of such Common Areas be used for any business or private purpose and no Owner shall do or permit or suffer to do anything in such Common Areas as may be or become a nuisance or cause annoyance to any other Owners or occupiers of the Residential Block of which the Residential Unit owned by him forms a part (bold and italics supplied).”

56.  Section V deals with “management of the Estate”. Clause 1 of Subsection B thereof set outs “powers and duties” of “Manager”, including:

“… (3) To repair and keep in good repair and condition the main structure and fabric of the Estate (including the external walls of the Estate) and the Common Areas, their equipment, apparatus, services, facilities and if necessary to replace any part or parts thereof which require replacement.

…

(6) To keep all Estate’s Common Areas well lighted.

…

(8) To keep the Estate’s Common Areas including but not limited to the pedestrian walkway in a clean sanitary and tidy condition.

…

(10) To prevent the obstruction of all Estate’s Common areas and to remove any article or thing causing the obstruction.

…

(23) To prevent any person (including an Owner) from occupying or using otherwise than in accordance with the written permission of the Manager or the provisions of this Deed any of the Estate’s Common Areas.

…

(25) To prevent and to take action to remedy any breach by any Owner or other person of any provisions of the Conditions and of this Deed.

…

(34) To enforce the due observance and performance by the Owners or any person occupying any part of the Estate through under or with the consent of any such Owner of the terms and conditions of this Deed of Mutual Covenant and the … and to take action… to enforce the due observance and performance thereof …

…

(42) To do all such other things as are reasonably incidental to the proper management of the Land and the Estate (bold and italics supplied)”.

57.  Subsection D deals with “management expenses” payable by owner of each Residential Unit, Commercial Unit or Car Port in accordance with Second Schedule. It includes “(b) The cost of carrying out all or any of the duties of the Manager set out in Clause 1 of Sub-Section B of SECTION V hereof”.

58.  Section VII provides for “meetings of the owners” and “meetings of Estate Owners’ Committee”.

59.  Finally, clause 6 of Section VIII provides that “the Manager shall at all times keep in the management office in the Estate a set of plans showing the common parts of the Estate which plans shall be available for inspection by the Owners (bold supplied)”.

F3.  The Estate

60.  The Site Layout Plan, one of the Plans defined in the DMC, is produced at trial. Together with the DMC, they reveal that the Estate consists of:

(1)  three 24-storey residential blocks, called Block 1, Block 2 and Block 3 (each floor has flats A to M) abutting Mei Tin Road and Tsuen Nam Road.

(a)  Block 1 is located at the western corner of the Estate, whose ground floor entrance/exit to/from Mei Tin Road is next to Shop 1. Shops 1 to 7 all have their frontage along Mei Tin Road.

(b)  There is one walkway cutting across the entire Estate from one side to another, with ground floor entrance/exit at Mei Tin Road between Shop 2 and Shop 3, and the other entrance/exit at Tai Wai Road between Shop 27 and Shop 26.

(c)  Block 2 is located at the middle of Tsuen Nam Road side of the Estate. Shops 7 to 25 all abut on Tsuen Nam Road. Block 2 has its ground floor entrance in between Shops 13 and 14 (there is another ground floor entrance/exit to/from interior of the Estate between Shop 10 and Shop 11).

(d)  Block 3 is at the corner between Tsuen Nam Road and Tai Wai Road. Block 3 has its own ground floor entrance to/from Tsuen Nam Road in between Shops 23 and 24. Shops 25 to 31 all have their frontage along Tai Wai Road instead;

(2)  a commercial development at its ground floor (housing 31 shops in total) abutting Mei Tin Road, Tsuen Nam Road and Tai Wai Road;

(3)  a 5-storey Car Port Building providing 260 car parking spaces, with an access road leading to it; and

(4)  many other communal, including recreational, facilities like one roller skating rink.

F4.  Shop 7 and the Passageway outside

61.  Shop 7 is a corner shop (which is marked by the words ‘SH7’ in the above Site Layout Plan) facing Mei Tin Road at one side and facing Tsuen Nam Road on the other. It is at the Southern most of the boundary of the Lot, with boundary point E to its South. Further out from point E, columns are erected from the ground to build one long covered walkway leading to, I believe, Tai Wai railway station.

62.  On photos before me, the Passageway outside Shop 7 is “L” in shape. It is made of concrete and grey in colour, and it is directly underneath the canopy above. Its ground area is thus delineated by the concrete canopy above. Drainage covers on the ground mark its outer limit with pavement of Tsuen Nam Road.

63.  And the said L-shaped Passageway outside Shop 7 is easily distinguishable from the open pavement of Tsuen Nam Road and the open pavement of Mei Tin Road (they are of course, as Leung said, open government land not within the Lot) as the latter two are paved with bricks of different (pink) colour.

64.  The said L-shaped Passageway outside Shop 7 is thus, I find, part of the Covered Walkway within the Lot constructed pursuant to Special Condition (11) of the Grant. On the Site Layout Plan, the words “canopy above” repeatedly appears throughout the 3 sides of the Covered Walkway facing Mei Tin Road, Tsuen Nam Road and Tai Wai Road. It is distinct from the adjacent open government land (or open pavement) outside the boundary of the Lot.

F5.  First assignment of Shop 7

65.  On 4 April 1989, the “Registered Owner” named in DMC assigned Shops 7 and 13 to its first purchaser (First Assignment of Shop 7) and the said 2 shops were coloured Pink on two ground floor plans annexed thereto. The said First Assignment of Shop 7[9] was made subject to and with the benefit of DMC. The two shops were assigned

“together with the right in common with the vendor and other... persons to use for the purpose of access to and egress from the [2 shops] the lifts entrance hall staircases and landings in the Block of which [they] form part and such of the passages therein as are not included in any of the other residential and commercial units and car parking spaces … EXCEPTING AND RESERVING unto (1) the Vendor … such exclusive rights as are specified and contained in [DMC] including … the exclusive right to hold use occupy and enjoy each and every part of the Land and the Estate other than the [2 shops] save and except such areas (if any) as may be specified as common areas in [DMC]… (italics and bold supplied)”.

F6.  Division into Shop 7A and Shop 7B

66.  At an unknown time, Shop 7 was divided into Shop 7A facing Mei Tin Road and Shop 7B facing Tsuen Nam Road as R2 testified and described under cross-examination[10].

F7.  2009

67.  Three Google street photos taken, likely, in same day in April 2009[11] produced by R1 showed that the Passageway outside Shop 5, Shop 6 and Shop 7A at ground floor facing Mei Tin Road was fully[12] occupied by merchandise and other goods.

F8.  2011

68.  Three Google street photos taken, likely, in same day in June 2011[13] produced by R1 showed that the Passageway outside Shop 5, Shop 6 and Shop 7A at ground floor facing Mei Tin Road was fully occupied with merchandise and other goods[14].

F9.  2014

69.  On 8 October 2014, R1 entered into an agreement to purchase Shop 7 for $68,800,000.

F10.  2015

70.  On 26 March 2015, for consideration of $68,800,000, R1 purchased from three vendors (one of them being Tsui), and became registered owner of, Shop 7.

71.  R1’s 2015 Assignment was executed by, among other, Choi Senior for R1. It was subject to and with the benefit of the DMC. Shop 7 was said therein to be shown and coloured Pink and marked “SH7” on the Floor Plan annexed to First Assignment of Shop 7.

72.  For matters below, it is likely, I find, that Tsui had continued to occupy Shop 7 as tenant of R1 after the said sale of Shop 7 to R1 in March 2015.

73.  About 6 months later, on 21 September 2015, the management office of the Estate issued a letter to 金雅麵包, copied to owner of Shop 7, IO and District Land Office Sha Tin, warned that placing of merchandise and other goods outside Shop 7 obstructed Covered Walkway therein and caused nuisance to members of the public and referred to Clause 14, demanding that merchandise and goods be removed within 10 days or else legal action be taken without further notice (21/9/2015 Warning Letter).

F11.  2016

74.  In October 2016, Leung joined the management office of the Estate.

75.  Sometime in 2016, IO began DCCJ 3796/2016 against the 1^st and 2^nd defendants therein regarding Shop 5 at ground floor of the Estate (Shop 5).

76.  Two Google street photos taken in December 2016 produced by R1 show that the Passageway outside Shop 2 (or 3), Shop 6 and Shop 7A at ground floor facing Mei Tin Road was occupied by merchandise and/or other goods[15].

F12.  2017

77.  Sometime in 2017 prior to 16 March 2017, IO began at Land Tribunal 5 different proceedings i.e. LDBM 22/2017 to LDBM 26/2017 against the respondent(s) therein regarding Shop 4, Shop 3A, Shop 3B, Shop 2BC and Shop 2A all at ground floor of the Estate (Shop 4, Shop 3A, Shop 3B, Shop 2BC, Shop 2A) respectively.

78.  On 16 March 2017, in LDBM 25/2017, consent order was made by Lands Tribunal on consent summons 1) requiring respondent therein to remove goods from the passageway outside Shop 2BC and 2) prohibiting the respondent from doing so in future.

F13.  2018

79.  Sometime in 2018, IO commenced proceedings against one Bridge Services Limited (喜達有限公司) (Bridge) in LDBM 237/2018 at Lands Tribunal regarding Shop 6 (2018 Action against Bridge). Under cross-examination of Mr Lo, R2 admitted occupying Shop 6 as tenant, I think, from Bridge.

80.  On or about 26 March 2018, Tsui and R1 entered into a tenancy agreement over Shop 7 (this is likely, I find, a renewed tenancy agreement).

81.  In October 2018, Leung became assistant property officer of the management office of the Estate.

82.  On 13 November 2018, IO’s solicitors commenced LDBM 236/2018 (2018 Action) on IO’s behalf against R1 as the 1^st respondent thereof and Tsui trading as Kam Ngar Cakes Shop (金雅餅店) as the 2^nd respondent thereof, making similar allegations of breach of Clause 14 and s.34I of BMO by Shop 7 as from 2018 and seeking similar relief to those of these proceedings.

F14.  2019

83.  On 25 January 2019，Choi Senior on behalf of R1 and Tsui signed a 終止租約協議書 in Chinese whereby, R1 having let Shop 7 to Tsui by a tenancy agreement dated 28 March 2018, Tsui agreed to surrender the said shop to R1 on or before 25 March 2019.

84.  On 6 March 2019, R1 and Tsui signed an agreement for surrender agreement in English whereby, R1 having let Shop 7 to Tsui by a tenancy agreement dated 26 March 2018, Tsui agreed to surrender the said shop to R1 on or before 25 March 2019 (incorporating a Chinese 退租協議書 dated 25 January 2019 by the same parties on Shop 7).

85.  By 26 March 2019, Tsui had likely, I find, surrendered and returned possession of Shop 7 to R1.

86.  On 2 April 2019, Choi Senior on behalf of R1 wrote a letter to the Registrar of Lands Tribunal headed “LDBM 1236/2018”[16] (R1’s 2/4/2019 Letter to LT re 2018 Action), referring to summons (傳票) dated 13 November 2018 from Lands Tribunal, stating that it was owner of Shop 7 and, also, the followings in the 2^nd and 3^rd paragraphs of the said letter:

“本人收到有關傳票後，曾多次到訪鋪址與租客徐家平先生洽談，要求徐家平先生息事寧人，遵守法例，避免影響他人，將所有貨品及雜物搬回店舖內，但徐家平先生回應如果將貨品及雜物搬回店鋪內將做不到生意，更加影響收入，當中本公司惟有以律師商討要求對方跟進事項或遷出上址，基於此情況，本人最後和徐家平先生於2019年1月25日取得協議，並於2019年1月25日當天由我們雙方簽妥退租書，並於2019年3月26日正式將上述鋪址交吉給本人公司，而閣下亦結束營業（附上解除租約協議影印本[17]）。”

“而就有關本人之租客雜物阻街，本人知悉情況下也即時解決，故希望當局寬容處理。（粗體及斜線後加）”

87.  On 4 April 2019, in 2018 Action, Lands Tribunal made an order by consent, after hearing IO’s solicitors, R1’s representative and Tsui, whereby it gave leave to IO to discontinue 2018 Action, and R1 and Tsui became jointly and severally liable to pay costs of the action in sum of $15,000 to IO.

88.  After surrender of Shop 7 by Tsui in late March 2019, on Choi’s admissions, in 2019, R1 let Shop 7A to R2 and let Shop 7B to one estate agent by the name of “Hong Kong Property” for 2 years. R2 came to know that Tsui surrendered Shop 7 due to legal proceedings taken out by IO against him for placing merchandises at the Passageway outside Shop 7 (R2 claimed such action by IO as IO’s “harassment” of Tsui in her witness statement; and Choi Senior made similar claim in his witness statement).

89.  On 18 April 2019, orders were made by Lands Tribunal in LDBM 23/2017 on consent summons filed by IO, 1^st and 2^nd respondents therein giving leave to IO to discontinue as against 3^rd respondent therein and ordering the 1^st and 2^nd respondents therein to pay agreed costs of the action in the sum of $40,000 to IO (as new tenant of Shop 3A agreed, I accept from Leung, to remove all the goods placed at the passageway outside the said shop).

90.  On 18 April 2019, orders were made by Lands Tribunal in LDBM 24/2017 on consent summons filed by IO, the 1^st to 3^rd respondents therein giving leave to IO to discontinue as against the 1^st to 3^rd respondents and ordering the 1^st to 3^rd respondents to pay agreed costs of the action in sum of $40,000 to IO (as new tenant of Shop 3B agreed, I accept from Leung, to remove all the goods placed at the passageway outside the said shop).

91.  Sometime in 2019, IO began DCCJ 868/2019 regarding Shop 1 against the defendant therein.

92.  Sometime in 2019, Bridge began LDPE 438/2019 at Lands Tribunal, seeking to recover possession of Shop 6 from, I think, R2 (the 2019 Proceedings).

93.  On 23 May 2019, interlocutory judgment was entered by default in DCCJ 3796/2016 began by IO against the 1^st and 2^nd defendants therein removing them to remove obstructions at common parts of the Estate (this, I accept from Leung, means the Passageway outside Shop 5), for damages to be assessed and costs.

94.  On 8 July 2019, orders were made by Lands Tribunal in the 2018 Action against Bridge on consent summons and upon undertaking of Bridge to make best endeavours in the 2019 Proceedings to recover possession of Shop 6 and to remove all goods at the Passageway outside Shop 6 within 3 months thereafter, giving leave to IO to discontinue 2018 Action against Bridge and requiring Bridge to pay costs of the same in sum of $15,000 to IO.

95.  Two Google street photos taken in September 2019 produced by R1 show that the Passageway outside Shop 3, Shop 4, Shop 5, Shop 6 and Shop 7 was occupied with merchandise and other goods.

96.  On 11 October 2019, orders were made by consent by District Court Master in DCCJ 969/2019 whereby, upon defendant’s undertaking not to place or leave or allow goods outside Shop 1 of the Estate which area fell within common areas, leave was given to IO to discontinue the action and IO was awarded costs of $30,000.

97.  On 19 December 2019, judgment after trial was entered by the Lands Tribunal in LDBM 26/2017 began by IO on consent of the 1^st and 2^nd respondents therein 1) requiring them to remove goods placed at the Passageway outside Shop 2A and 2) prohibiting them to so place goods in future.

F15.  2021

98.  On 11 January 2021, orders were made by consent by the Lands Tribunal in LDBM 22/2017 on consent summons filed by parties requiring the respondent therein, among others, to remove goods placed at the passageway outside Shop 4 within 7 days and paying costs of the action in sum of $30,000 to IO.

99.  Four Google street photos taken in February 2021 (two of them likely taken on the same day[18]) produced by R1 show that the Passageway outside Shop 2, Shop 3, Shop 4, Shop 5, Shop 6 and Shop 7 was occupied with merchandise and other goods.

100.  After termination of Hong Kong Property’s tenancy over Shop 7B, on 11 March 2021, R1 also let Shop 7B to R2 for commercial use for 2 years (from 10 March 2021 to 9 March 2023) by way of R2’s 2021 Tenancy Agreement at monthly rental of $160,000. R2 thereafter carried on a fruit business thereon.

101.  As from March 2021, R2 thereby occupied both Shop 7A and Shop 7B (the entire Shop 7) as tenant of R1 carrying on her fruit business for the first time. By then, R2 should have already returned possession of Shop 6 to Bridge due to the 2019 Proceedings taken out by Bridge because of 2018 Action against Bridge.

102.  On 3 August 2021, District Lands Office (DLO), Shatin, issued bilingual warning letter by way of registered post to R1 at its registered office in Jordan, copied to Shop 7 occupant and IO, advising that recent inspection by officers of its Lease Enforcement Unit revealed that:

“merchandise and miscellaneous items are being placed on portion of covered walkway[19] on the ground floor as shown coloured pink cross-hatched black on the plan annexed to the New Grant No.12159 … in contravention of Special Condition No.(11)(d) ... (italics supplied)”

and calling upon R1 to purge the said breach within 28 days (with the said marked copy plan attached) while reserving government right to take further lease enforcement action (DLO 3/8/2021 Warning Letter).

103.  Two photos dated 26 November 2021 produced at trial show that fruit, boxes and sunshades[20] were placed at L-shaped Passageway outside Shop 7, which was not painted, or affixed, with any nameplate, likely done intentionally by R2 due to legal proceedings in the past (after all, R2 has had, since 2011, a trade name of Kam Nga Fresh Fruit in her business registration which she could lawfully disclose to others if she saw fit to do so).

104.  Since about November 2021, management staff of the Estate on their patrol discovered that (and on the admissions of R1 and R2 in their (Amended) Notice of Opposition) goods and sundries (including fruit and carton boxes) were, without consent of IO or manager of the Estate, placed by R2 at the Passageway outside Shop 7 (inclusive of Shop 7A and Shop 7B) during business hours in the daytime, attracting from time to time many shoppers to stay at and/or beyond the Passageway outside Shop 7.

105.  As is amply proven by, among others, many photos produced at trial, the above actions of R2 (and results thereof) persisted, I find, until trial (though it stopped for a short period as far as Shop 7A is concerned, see below).

106.  On 28 November 2021, DLO 3/8/2021 Warning Letter was registered against Shop 7 at the Land Registry.

107.  On 31 December 2021, IO’s solicitors sent by post a letter to R1 and occupier of Shop 7, warning that merchandise and other goods were placed on pavement in breach of Clause 14 by occupier of Shop 7 in November 2021 as per enclosed 5 photos (all taken on 26 November 2021 showing that merchandise were placed at the Passageway outside Shop 7) and demanding their cessation and remedy within 7 days or else legal action may be taken by IO.

F16.  2022

108.  In early January 2022, R1’s staff spoke to R2 urging her to “improve” in her business i.e. to move merchandises and goods back to interior of Shop 7.

109.  On 25 January 2022, R1’s former solicitors replied to IO’s solicitors on latter’s letter dated 31 December 2021, copied R1 (R1’s Former Solicitors’ Letter dated 25/1/2022), stating that:

“We are instructed that our client is fully aware of the clause of the Deed of Mutual Covenant and Management Agreement of the Grandway Garden cited by you in your said letter. Our client’s tenant is now in possession and control of [Shop 7]. As soon as our client’s receipt of your said letter, our client inspected [Shop 7] on 6^th January 2022. Our client was told by the tenant that the tenant only placed the goods and objects outside [Shop 7] for the purpose of avoiding overcrowded in [Shop 7]. It would be the way to maintain social distancing and to avoid customers in contracting the virus. Upon our client demanded the tenant to stop the obstruction of the common area of Grandway Garden, the tenant immediately moved the goods and objects back to [Shop 7]. The tenant was warned by our client not to place goods and objects at the common area causing obstructions. We enclosed herewith photos taken on 6^th January 2022 for your reference (bold and italics supplied)”.

and enclosing 4 photos of Shop 7 taken at 0640 to 0710 hours all on 6 January 2022 (with all goods put inside Shop 7 and nothing remaining on L-shaped Passageway outside).

110.  But photos taken by IO in January, February, May, July, August and December 2022 show that L-shaped Passageway outside Shop 7 were fully occupied by fruit, boxes and sunshade. Shop 7 was, of course, not painted, or affixed, with any nameplate in these photos.

111.  Two Google street photos taken in March and July 2022 produced by R1 also show that the Passageways outside Shop 4, Shop 5, Shop 6 and Shop 7 were occupied with merchandise and other goods.

112.  On 27 May 2022, IO’s solicitors sent a reply letter to R1’s former solicitors, copied to IO and occupant of Shop 7, stating, among others, that “little improvements” were made since their letter dated 25 January 2022 and tenant of Shop 7 continues to place goods and objects at the common areas of the Estate causing obstructions to the residents and the general public in violation of the DMC. Photos taken on 9 & 12 February and 1, 2, 16, 17 & 23 May 2022 were enclosed (all showing that the Passageway outside Shop 7 occupied by merchandise and other goods). IO’s solicitors demanded R1 and its tenant to cease above action and take remedial actions within 7 days, failing which they have standing instructions to take out legal proceedings.

113.  On 12 November 2022, instead of letting Shop 7A further to R2, Choi Senior on behalf of R1 granted a licence agreement of Shop 7A to Wong for selling drinks from 15 November 2022 to 14 May 2023 (i.e. a short period of 6 months) at a monthly license fee of $32,000.

114.  On 8 December 2022, IO’s solicitors sent letter to R1’s former solicitors asking the latter for any instructions to accept service of legal proceedings.

115.  On the same day, IO issued Notice of Application against R1 alone in these proceedings. I believe R1 was then sued alone as IO and the management of the Estate had no information about the identity of the occupant(s) or tenant(s) of Shop 7. After all, no nameplate of Shop 7 was affixed or painted at all.

116.  On 16 December 2022, Leung on behalf of IO sent a letter to R1, copied to tenant of Shop 7, demanding that goods and objects placed at common areas for private and commercial use causing obstruction (enclosing one photo of Shop 7A and another of Shop 7B, both of even date, showing that merchandise, sunshade and other goods were placed at the Passageway outside, with Shop 7 having no nameplate) be at once removed and returned to Shop 7, or else IO may exercise its power under DMC to remove or discard the same at R1’s expense.

117.  On 30 December 2022, Leung on behalf of IO sent a letter to R1, copied to tenant of Shop 7, in similar terms to IO’s letter dated 16 December 2022 and enclosing 2 photos of even date, one of Shop 7A and the other of Shop 7B, with fully occupied Passageways outside and Shop 7 having no nameplate at all.

118.  Apart from the above written letters, oral warnings, I accept from Leung, had previously also been given to owner and/or occupants of Shop 7 by management staff of the Estate requiring them to remove goods and sundries placed at the Passageway outside Shop 7.

F17.  2023

119.  On 20 January 2023, Choi Senior on behalf of R1 filed Notice of Opposition in these proceedings. The only ground put down was that R1 did not breach the DMC (答辯人沒違反富嘉花園大厦公契).

120.  Two photos taken on 31 January 2023 produced by IO show that fruit, boxes and sunshade were placed at L-shaped Passageway outside Shop 7, which had no nameplate.

121.  On 15 February 2023, Leung’s witness statement was filed.

122.  On 5 March 2023, R2 entered into R2’s 2023 Tenancy Agreement with R1 (signed by Choi Senior) to renew lease of Shop 7B for another 2 years of commercial use from 10 March 2023 to 9 March 2025 at a monthly rent of $160,000, pursuant to an option to renew in R2’s 2021 Tenancy Agreement.

123.  By then, R2 had come to know from Choi Senior about these proceedings then taken out against R1 alone.

124.  At hearing before Lands Tribunal on 8 March 2023, R1 provided IO’s solicitors with 1) copy licence agreement of Shop 7A until 14 May 2023 with Wong dated 12 November 2022 and 2) copy tenancy agreement of Shop 7B with R2 until 9 March 2023.

125.  On 21 July 2023, Wong and Choi Senior on behalf of R1 entered into a surrender agreement (終止租約協議書), agreeing to terminate tenancy of Shop 7A between the two (tenancy agreement dated 12 November 2022 and lasting) as from 31 July 2023.

126.  On 24 July 2023, IO’s solicitors wrote to R1 seeking updated information regarding tenancy of Shops 7A and 7B.

127.  In about late July 2023, R1 recovered possession of Shop 7A from Wong. However, R1 on the other hand let Shop 7A to R2 for her fruit business. The two did not see fit to enter into any written tenancy agreement over Shop 7A.

128.  On 1 August 2023, Choi Senior on behalf of R1 replied IO’s solicitors stating that it had recovered possession of Shop 7A but that tenant of Shop 7B had renewed for 2 years to 9 March 2025 (and disagreeing to return the same). R1 purportedly stated that it would take legal action to recover Shop 7B.

129.  Photos taken by IO in April, July and 3 to 7 August 2023 show that fruit, boxes and sunshade were placed at L-shaped Passageway outside Shop 7, which had no nameplate.

130.  Two photos taken in late August 2023 produced by IO also show that fruit, boxes and sunshade were placed at L-shaped Passageway outside Shop 7. Four more photos taken in August 2023 produced by IO showed that L-shaped Passageway outside Shop 7 was fully occupied by fruit, boxes and sunshades etc. The Passageway outside Shop 6 was similarly occupied.

131.  Two photos taken on 26 August 2023 produced by R1 also showed that merchandises and goods were placed at the Passageways outside Shops 2 to 7.

132.  On 27 September 2023, leave was given by the Lands Tribunal to join R2 to these proceedings.

133.  Two photos taken by R1 and/or R2 at night on 8 November 2023 showed that roller gates of Shop 7 (which had no nameplate) have been shut down with nothing placed at Passageway outside Shops 1 to 7.

134.  But four Google street photos taken in January, March and December 2023 (two of them likely taken on the same day[21]) produced by R1 show that the Passageway outside Shop 4, Shop 5, Shop 6 and Shop 7 was occupied by merchandise and other goods.

F18.  2024

135.  On 3 January 2024, Amended Notice of Opposition was filed by R1 and Notice of Opposition was filed by R2.

136.  Starting from February 2024, a task force formed by the manager of the Estate removed merchandises and goods placed at the Passageway outside G/F shops and demand payment for returning them to their owners.

137.  On 19 April 2024, R1 and R2 jointly made an interlocutory application in these proceedings for an interlocutory injunction until judgment against IO’s interference of their use and occupation of the “pedestrian walkway(s)” outside Shop 7B.

138.  On 4 May 2024, the management of the Estate received complaint from one owner from Block 1 about obstruction caused by placing of goods at the Passageway.

139.  On 14 May 2024, the above interlocutory injunction application taken out by R1 and R2 in these proceedings was dismissed by the Lands Tribunal after hearing.

140.  On 27 June 2024, Choi Senior’s witness statement, and R2’s witness statement, were filed.

141.  On 17 July 2024, IO received complaint from four owners[22] regarding occupation of the Passageway by shop occupants. Two photos taken by IO in the morning of 17 July 2024 show that the Passageway outside Shop 7 was still partly occupied by merchandise and cartoon boxes.

142.  On 29 July 2024, Leung’s supplemental witness statement was filed.

143.  On 27 August 2024, trial of these proceedings began.

G.  Material provisions of BMO

144.  Under s.2, “common parts” means “(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”.

145.  Paragraph 8 of Schedule 1 includes “passageways[23]”.

146.  Under s.18(1)(c), IO shall “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”.

147.  Under s.34C(1), Part VIA applies “, except where otherwise expressly provided, applies only to a building in respect of which a deed of mutual covenant is in force whether that deed came into force before or after the material date”.

148.  By s.34C(2), “In the event of any inconsistency between this Part and the terms of a deed of mutual covenant or any other agreement, this Part shall prevail”.

149.  S.34I(1) reads: “No person may —

(a)  convert any part of the common parts of a building to his own use unless such conversion is approved by a resolution of the owners’ committee (if any);

(b)  use or permit to be used the common parts of a building in such a manner as — (i) unreasonably to interfere with the use and enjoyment of those parts by any owner or occupier of the building; or (ii) to cause a nuisance or hazard to any person lawfully in the building.

150.  By s.34I(2), any person who contravenes subsection (1) shall be deemed to be in breach of an obligation imposed on him by the deed of mutual covenant in respect of the building.

H.  Issue (1) – is the Passageway outside Shop 7 “common parts” or not?

151.  It is a pity that IO has not produced such plans, if any, prepared pursuant to clause 6 of Section VIII of the DMC to assist in resolving the above issue.

152.  But I still agree with Mr Lo that the Passageway outside Shop 7 is “common parts” of the Estate within definitions of BMO and the DMC. I give the following reasons:-

(1)  “Passageways” have been specified in paragraph 8 of Schedule 1 of BMO;

(2)  “Passageways” have not been specified or designated in the DMC as being for the exclusive use, occupation or enjoyment of any owner. They are not exclusive use areas of the “Registered Owner” or “First Purchaser” as per clauses 1 and 2 of Section I of the DMC. They have not been allocated any undivided share in the First Schedule of the DMC. There is also no provision in the DMC that reserves their exclusive use to any owner.

(3)  To the contrary, “the Passageway” is, I think, apt to be included within definition of “Estate’s Common Areas” of the DMC, especially sub-paragraphs (e) (footpath), (f) (pavement), (k) (pedestrian walkway) and (m) (other parts intended for common use and benefit of all owners and visitors) (as opposed to “Block’s Common Areas” in view of some of their locations not within or near Blocks 1 to 3).

(4)  And “Estate’s Common Areas” are to be maintained and protected by the manager of the DMC for all owners and its expenses payable and shared by all owners.

(5)  Special Conditions (11) of the Grant makes it clear that the Covered Walkway (i.e. the Passageway) is, contrary to Leung’s restricted views in his statement, intended to be pedestrian passage for all members of the public to pass and repass on foot for all lawful purposes freely and without payment. Thus it could not have been exclusive use area of any owner(s) of the Estate.

I.  Issue (2) – were R2 and R1 in breach of Clause 14 or not?

153.  Pursuant to s.41 of Conveyancing and Property Ordinance[24], the benefits and burdens of covenants of the DMC run with the Lot and are enforceable against any “owners” of the Lot like R1. As against occupier of the Lot like R2, negative (as opposed to positive) covenants of the DMC remain enforceable under the said section.

154.  Clause 14 is, I think, a negative covenant. Thus, it is, I think, also enforceable against R2. It could, I think, be broken into 4 different prohibitions against different activities on different areas by different person(s), namely: -

(1)  No part of Block’s Common Areas and Estate’s Common Areas shall be obstructed or incumbered (Limb (1));

(2)  Nor shall any refuse or other matters or things be placed or left thereon (Limb (2));

(3)  Nor shall any part of such Common Areas be used for any business or private purpose (Limb (3));

(4)  No Owner will do or suffer or permit to be done anything in such Common Areas as may be or become a nuisance or cause annoyance to any other owners or occupiers of the Estate (Limb (4)).

155.  Looking at its Amended Notice of Application, IO only relies on Limb (3) and Limb (4) of Clause 14 against R2 and R1.

156.  Regarding R2, on my findings above, she had, I think, undoubtedly used the Passageway outside Shop 7 (be it Shop 7A or Shop B) for her business purpose since about November 2021 until trial. I find her in breach of Limb (3) of Clause 14.

157.  However, as R2 is not an “Owner” as defined in the DMC, she could not, I think, be guilty of breaching Limb (4) of Clause 14, whose prohibition is directed against “Owner”.

158.  Moving to R1, notwithstanding Choi Senior’s evidence of denial and his claimed ignorance of the DMC in his statement and in the box, I infer and find on balance from, among others, the following trial evidence that R1 had allowed R2 using the Passageway outside Shop 7 (be it Shop 7A, Shop 7B or Shop 7) for R2’s business purpose since about November 2021 until trial: -

(1)  The 21/9/2015 Warning Letter regarding Shop 7 to 金雅麵包 was copied to R1 as its owner;

(2)  The 2018 Action was taken out by IO in respect of Shop 7 against R1 and Tsui for similar reasons and relief to these proceedings;

(3)  From late March 2019, R2 had occupied Shop 7A as tenant of R1;

(4)  The DLO 3/8/2021 Warning Letter served on R1 (and later registered at the Lands Registry) was for breach of Special Conditions (11) in respect of Covered Walkway;

(5)  For (1), (2) and (4) above, if not incriminatory contents of R1’s Former Solicitors’ Letter dated 25/1/2022, R1 was plainly aware and/or ought to be aware of Tsui’s (and R2’s) actions of placing of goods at the Passageway outside Shop 7 and them being in breach of the DMC (if not Special Conditions (11) of the Grant);

(6)  As from March 2021, R2 became occupiers and tenants of both Shop 7A and Shop 7B from R1 after execution of R2’s 2021 Tenancy Agreement;

(7)  On 31 December 2021, IO’s solicitors had sent warning letter to R1 and its tenant of Shop 7 complaining of similar actions in breach of Clause 14 and demanding their cessation, and threatened legal proceedings in default;

(8)  But, as was said by IO’s solicitors’ letter dated 27 May 2022 (and proven by photos enclosed therein), “little improvement” on the Passageway outside Shop 7 was made by then;

(9)  In December 2022, IO had no choice but to take out these proceedings against R1 at Lands Tribunal;

(10)  Nonetheless, R1 saw fit in March 2023 to renew R2’s tenancy over Shop 7B by entry into R2’s 2023 Tenancy Agreement without ensuring R2 ceasing all the above actions in breach of the DMC;

(11)  In late July 2023, having recovered Shop 7A from Wong, R1 also saw fit to let it orally to R2 without ensuring R2 ceasing all the above actions in breach of the DMC;

(12)  In September 2023, R2 was joined to these proceedings on IO’s application;

(13)  But R2 had persisted to place goods and sundries at the Passageway outside Shop 7 until trial, causing task force of the management of the Estate to take enforcement action starting February 2024; and

(14)  Indeed, in April 2024, notwithstanding all the above matters, R1 joined R2 in applying for interlocutory injunction in these proceedings for R2 to continue placing goods and sundries at the Passageway outside Shop 7B until judgment.

I therefore find R1 in breach of Limb (3) of Clause 14. If necessary, I would also apply Clause 8 and/ Clause 10 to arrive at the same conclusion above.

159.  Based on, among others, the same evidence in the preceding paragraph and Leung’s evidence below, I am also satisfied on the balance of probabilities that R1, has since about November 2021, suffered or permitted R2 to place goods and sundries at the Passageway outside Shop 7, Shop 7A or Shop 7B (as the case may be) which caused or became a nuisance to other owners or occupiers of the Estate.

160.  On this point, I accept Leung’s unchallenged evidence that R2’s actions above had:

(1)  prevented other owners and occupiers of the Estate from using the Covered Walkway to protect them from sunshine and rain, and it had thereby posed danger to the elderly whose walking ability suffers for one reason or another and/or who are dependent on equipment to assist them in walking; and

(2)  caused rubbish and empty boxes being scattered around on and beyond the Passageway such that they posed hygiene problem to other owners and occupiers of the Estate.

161.  And R2’s actions above had, as one observes from photos produced, caused shoppers to gather together from time to time at and around the Passageway outside Shop 7 such that other owners and occupiers of the Estate were obstructed from using the said passageway for their own passage (or that of their customers to their shops[25]).

162.  These self-evident ordinary and foreseeable consequences in the two preceding paragraphs above could not, I think, have escaped R1’s attention in the past.

163.  Applying principles of private nuisance summarized in Cheng Lai Yin v Liu Yee Mui[26] quoted at paragraph 34 of Ms Yeung’s opening submissions, though no financial or physical damage is involved, the consequences in the preceding two paragraphs above are, I think, real interference with comfort and convenience of the living and business of other owners and occupiers of the Estate according to standards of average man, and the said discomfort is, I think, substantial to them, having regard to all the circumstances, including duration, extent and frequency, of such occupation of the Passageway outside Shop 7 by R2 for her own business. They therefore amounted to, I find, nuisance to other owners or occupiers of the Estate.

164.  I therefore also find R1 in breach of Limb (4) of Clause 14.

165.  Hence, I find both R1 and R2 in breach of Clause 14 due to R2’s placing of goods and sundries at the Passageway outside Shop 7 since about November 2021.

J.  Issue (3) – were R2 and R1 in breach of s.34I of BMO or not?

166.  Part VIA of BMO, including s.34I, applies, I think, to the Estate as the DMC is in force in respect of the Estate.

167.  Looking at its Amended Notice of Application, IO only relies on s.34I(1)(a) and s.34I(1)(b)(i) of BMO against R2 and R1.

168.  S.34I of BMO applies to any person, as the section began with the words “No person”.

169.  By placing goods and sundries at the Passageway outside Shop 7 (be it Shop 7A or Shop 7B) since about November 2021, R2 had, I think, converted such common parts of the Estate to her own use. There is no suggestion of her having approval by way of resolution of any owners’ committee.

170.  I therefore find R2 in breach of s.34I(1)(a) of BMO, as indeed Ms Yeung admitted in her written opening.

171.  By placing goods and sundries in the way as she did since about November 2021, R2 had plainly, I find, obstructed other owners and occupiers of the Estate from using the Passageway outside Shop 7. Put it another way, R2 had used the same in such a manner as unreasonably to interfere with its use and enjoyment by other owners and occupiers of the Estate.

172.  Hence, I also find R2 in breach of s.34I(1)(b)(i) of BMO, whose terms are, I think, clearly engaged in this case.

173.  By allowing R2 to act in the way she did since November 2021, R1 had, I think, permitted the common parts of the Estate to be used by R2 in such a manner as unreasonably to interfere with its use and enjoyment by other owners and occupiers of the Estate and is, I find, in breach of s.34I(1)(b)(i) of BMO.

174.  By the same reasoning above, R1 had, I find, allowed R2 to contravene s.34I(1)(a) of BMO.

175.  Hence, both R2 and R1 are, I find, in breach of s.34I(1)(a) and s.34I(1)(b)(i) of BMO.

176.  Accordingly, by reason of s.34I(2) of BMO, both R1 and R2 shall be deemed to be in breach of an obligation imposed on it/her by the DMC in force in respect of the Estate.

K.  Issue (4) – did IO acquiesce DMC and BMO breaches committed by R1 and R2 or not?

177.  This is the crux of Ms Yeung’s submissions in her written opening and closing for R1 and R2.

178.  According to paragraphs 15 to 17 of Ms Yeung’s opening, respondents’ case of acquiescence was said to be dependent on the following “indisputable facts”, namely: -

(1)  The prevalence of the act of placing goods on the passageway outside shop units situated on Mei Tin Road by all other co-owners since 2009 at the very least (the said practice, according to their case, existed since the 1990s), as is apparent from Google street photos since 2009 showing that the said practice of placing goods on the Passageway has existed continuously since 2009 at the latest;

(2)  That such practice was simply adopted by the respondents consistently with the conduct of all other co-owners upon R1’s acquisition of Shop 7 in March 2015;

(3)  Such practice would have been plain and notorious breach of the DMC by way of conversion of common parts;

(4)  Yet IO had not taken legal enforcement actions to restrain the said practice against any G/F shop until 2016.

179.  In reliance, it was said, of the above representation by inaction, R1, it was said, made the decision to acquire Shop 7 at a specific price and R2 rent it at a specific rental, which they would not have otherwise done but for IO’s conduct. Such detriment, it is said, is not diminished by any countervailing benefit of the respondents’ use of the trespassed area, because such usage was paid for by R1. It is thus unconscionable for IO to now enforce the DMC and deprive the respondents of the usage of Shop 7 that was paid for, which would cause a significant diminution in value.

180.  By way of legal submissions, Ms Yeung submitted at paragraphs 5 to 9, 21 to 23, 26 to 30 of her closing that:-

(1)  The necessary elements of acquiescence are that of representation (as implied by inaction), detrimental reliance and unconscionability;

(2)  All the necessary elements above are met by the time R1 purchased Shop 7 in March 2015, in that R1 (and R2) had relied on IO’s inaction since the 1990s to its (and their) detriment by paying a (substantially) higher price for its acquisition (and lease) of Shop 7 than it (or they) would otherwise have done such that it is now unconscionable to enforce the DMC against it (or them);

(3)  R1 (and R2) thus has/have, it was submitted, an estoppel equity (to which the rules of priority apply) of a proprietary nature which arose at the point in time when the above elements necessary for an acquiescence were met (i.e. March 2015), after which it is no longer possible to be retrospectively defeated by subsequent events (such as R1’s 2/4/2019 Letter to LT re 2018 Action, 2018 Action and R1’s Former Solicitors’ Letter dated 25/1/2022).

181.  In terms of local authorities on acquiescence binding on this Tribunal, Ms Yeung referred, among others, to the following Court of Appeal judgments, including one first instance judgment below: -

(1)  Cheung Yuet v Incorporated Owners of Oriental Gardens[27] (Cheung Yuet);

(2)  Hollywood Shopping Centre Owners Committee Ltd. v Wing Wah Building Mongkok Kowloon (IO) [28] and its first instance judgment[29] (Hollywood CA Judgment and Hollywood First Instance Judgment respectively);

(3)  Freder Centre (IO) v Gringo Ltd[30] (Freder Centre); and

(4)  Grand Power International Ltd v Chan Sing Hoi Enterprises Ltd[31] (Grand Power).

182.  In dealing with Ms Yeung’s submissions above, the starting point is no doubt, I think, paragraphs 25 and 26 of Freder Centre, which read:

“25. As to whether the applicant has in fact acquiesced in the respondents’ breach, there is no disagreement between counsel on the relevant legal principles. As stated by Thesiger LJ in De Bussche v. Alt (1878) 8 Ch D 286 at 314, the defence of acquiescence arises:

“If a person having a right, and seeing another person about to commit, or in the course of committing an act infringing upon that right, stands by in such a manner as really to induce the person committing that act, and who might otherwise have abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the fact.”

26. Hence, to succeed in a defence of acquiescence, it must be shown firstly, there was on the part of the plaintiff, an assent or lying by in relation to the acts of another person; and secondly, in view of the assent or lying by and consequent acts it is unjust in all the circumstances to grant the relief in question: see Spry, Equitable Remedies, 9^th edition, p.56 (bold and italics supplied).”

183.  Assessing all the evidence adduced at trial, Ms Yeung fails, I think, miserably in terms of facts on the first element of acquiescence referred to above. I say so because:

(1)  For reasons given in section E2 above, this Tribunal disbelieves Choi Senior’s pre-2015 evidence, R2’s pre-tenant evidence and their evidence of alleged “common practice”.

(2)  For reasons given in section E2 above, such pre-2105 Google street photos produced by R1 do not prove continuous placing of goods at the Passageway outside G/F shops facing Mei Tin Road over the years from 2009 to 2015 as alleged.

(3)  Had they so proven, as was also pointed out in section E2 above, they by no means prove that, from 2009 to 2015, nearly all (if not all) of the other G/F shops of the Estate have committed similar breaches as alleged in (Amended) Notice of Opposition filed by R1 and R2 (as the case may be) (see above).

(4)  Though there is no evidence of legal proceedings taken by IO or the management of Estate prior to 2015 to enforce (or seek to enforce) the DMC over the Passageways, having regard to (1) to (3) above, the respondents have not, I think, made good their claim in (Amended) Notice of Opposition filed by R1 and R2 (as the case may be) that there had been assent or lying by on the part of IO in relation to similar breaches of the Clause 14 and/or s.34I of BMO committed by other G/F shops of the Estate from 2009 to 2015. Any such pre-2015 breaches proven at trial were only isolated ones committed by some (and not nearly all) of the 31 ground floor shops of the Estate.

(5)  After 2015, though similar breaches of Clause 14 and s.34I of BMO regarding the Passageways were, on my findings above, committed by, at most, 7 G/F shops all facing Mei Tin Road, there is, one must stress, no evidence of similar breaches committed by the remaining 24 shops facing Tai Wai Road and Tsuen Nam Road (in this respect, the facts of similar post-2015 breaches proven in these proceedings are, I think, distinguishable or less serious from those proven in Cheung Yuet[32] or Freder Centre[33]).

(6)  Nevertheless, if not given earlier, by September 2015, the management office of the Estate had given 21/9/2015 Warning Letter to tenant, and owner, of Shop 7 regarding placing of merchandise at the Passageway outside the said shop, and referred to Clause 14.

(7)  If not taken out earlier, IO had also in 2018 taken out 2018 Action against R1 and Tsui to enforce the DMC and BMO against placing of merchandise at the Passageway outside Shop 7, which culminated in a consent order made against R1 and Tsui in April 2019.

(8)  If not taken out earlier, IO had further in 2018 taken out 2018 Action against Bridge to enforce the DMC and BMO against placing of merchandise at the Passageway outside Shop 6, causing in turn Bridge issuing the 2019 Proceedings against its tenant i.e. R2, and causing R2 to leave Shop 6 in the end.

(9)  In addition, IO had, since 2016, taken out other legal proceedings at District Court and Lands Tribunal against other G/F shops facing Mei Tin Road for placing of merchandises and goods at the Passageway outside.

(10)  Furthermore, IO (and the management of the Estate) had, since December 2021, and after these proceedings were issued in December 2022, given numerous warnings to R1 and R2 against placing of merchandises and goods at the Passageway outside Shop 7 in breach of Clause 14.

(11)  Starting February 2024, a task force formed by the management of the Estate took action to enforce the DMC by removing obstructions (i.e. goods and sundries) from the Passageways outside G/F shops of the Estate.

(12)  Having regard to (6) to (11) above, if one does not take into account letters written by R1 and R1’s former solicitors over the same period in response to the above actions and proceedings, there had not, I think, been any assent or lying by to breaches of Clause 14 and/or s.34I of BMO committed by R1 and R2 (or by owners and tenants of other G/F shops facing Mei Tin Road) on the part of IO for the period from 2015 to trial.

(13)  In terms of language of estoppel employed by Ms Yeung, on all evidence adduced at trial, the respondents have not, I think, proven the necessary element of representation by inaction on the part of IO (be it before 2015 or afterwards), if ever the respondents spelt out the contents of such representation at all in their (Amended) Notice of Opposition.

184.  Assuming I am wrong on the preceding paragraph regarding pre-2015 period or post-2015 period, R1 and R2 also failed, I think, to prove the second element of the defence of acquiescence set out by Court of Appeal in Freder Centre for the reasons below.

185.  Firstly, this Tribunal rejects respondents’ evidence of alleged detrimental reliance allegedly relied upon.

(1)  In terms of evidence, Choi Senior never said in his witness statement that he paid a higher price (or a substantially higher price) for purchase of Shop 7 in March 2015 due to alleged “common practice” he gave evidence (it was also not mentioned at all in Amended Notice of Opposition settled by R1’s counsel).

(2)  Had Choi Senior so said, he gave, I note, no particulars of the amount of increased price that he saw fit to pay for Shop 7 due to the alleged “common practice”.

(3)  There is not a single documents proving or supporting the above self-serving claim by Choi Senior.

(4)  As was pointed out in Section E2 above, the allegation of acquiescence was not raised by Choi Senior prior to January 2024 despite he had plenty opportunities to so raise.

(5)  Hence, had Choi Senior given evidence of any alleged detrimental reliance of having paid a higher price for Shop 7 due to alleged “common practice” at all, I have no hesitation to reject it as an “afterthought” as submitted by Mr Lo.

(6)  While R2 had claimed at paragraph 9 of her witness statement filed in June 2024 that she would not have rented Shop 7 at the rental she agreed had the Passageway outside not been available for her placing goods and sundries, the said allegation was also nowhere found in Notice of Opposition settled by her counsel.

(7)  This self-serving claim of R2 made lately in June 2024 shortly before trial is also not proven or supported by any documentary evidence.

(8)  Again, R2 gave no particulars which tenancy agreement(s) she referred to, the amount of rental she had agreed upon, and the amount of increased rental she saw fit to pay for the alleged “common practice” of placing goods at the Passageway.

(9)  Indeed, Ms Yeung’s submissions also fail to spell out the exact timing of such alleged detrimental reliance suffered by R2.

(10)  Had R2 had in mind R2’s 2021 Tenancy Agreement and/or R2’s 2023 Tenancy Agreement, her said reliance claim is, I think, most doubtful against the background of, among others, 2018 Action, 2018 Action against Bridge, the 2019 Proceedings, and these proceedings commenced in December 2022.

(11)  Hence, for reasons in (6) to (10) above, I have also no hesitation to reject such evidence of detrimental reliance given by R2.

(12)  Accordingly, there is, I think, nothing unjust to grant injunctive relief against R1 and R2 (or nothing unconscionable as submitted by Ms Yeung for any equity of estoppel to arise in favour of R1 in March 2015, or to arise in favour of R2).

186.  Secondly, this Tribunal fails completely to see why the equity, if any raised in March 2015 in favour of R1 (or any raised in favour of R2) as submitted by Ms Yeung, ought to be satisfied by the grant of a proprietary (as opposed to personal) interest.

187.  Indeed, this Tribunal has every reason below to think otherwise. Let me explain below.

(1)  The Court of Appeal had made it clear at [47] of Grand Power below that it was only in “special circumstances” that the equity in case of acquiescence ought to be satisfied by the grant of a proprietary (as opposed to personal) interest.

“47. Acquiescence and waiver can only give rise to defences which are personal in nature to the person who acquiesced and his heirs. Except in special circumstances, they cannot give rise to any proprietary interest capable of binding successors in title in that a personal contract relating to land does not run with the land …. Similarly, in the context of laches, this is treated as a personal disqualification on the part of the particular plaintiff and not a stigma on the title to land which, once impressed, necessarily affected all succeeding owners …. The same applies to estoppel by convention, which does not avail a stranger to the agreement of an assumed state of facts …. An estoppel will bind a successor to property only if it is an estoppel which the court will satisfy by the grant of a right in the property. If the antecedent equity is not satisfied by the grant of a proprietary interest, then the equity was purely personal and will not bind successors, even with notice, unless their consciences are affected … .(bold and italics supplied)”

(2)  The respondents have never suggested in their (Amended) Notice of Opposition that such representation, if any, given by IO’s inaction involve IO’s grant of an interest (or promise to grant an interest) in the Passageway outside Shop 7 to R1.

(3)  Indeed, R1 never counterclaimed nor alleged in its Amended Notice of Opposition that it had proprietary interest of any sort over the Passageway outside Shop 7 due to IO’s alleged failure to take enforcement actions against breaches committed by nearly all, if not all, G/F owners of the Estate since the 1990’s.

(4)  R1 and R2 sought only to assert in (Amended) Notice of Opposition that it is unjust and inequitable to grant injunctive relief against them.

(5)  Neither did Choi Senior say in this witness statement that he had so believed due to alleged “common practice” he had given evidence.

(6)  At best, Choi Senior had said in his witness statement that he thought that the placing of goods and sundries at the Passageway outside Shop 7 had IO’s consent or blessing (得到法團的同意及默許) due to IO’s inaction.

(7)  As was held on appeal at [48] and [49] of Grand Power, any equity in favour of R1 as submitted by Ms Yeung could well, I think, be sufficiently satisfied by a personal licence in favour of R1 over the Passageway outside Shop 7.

(8)  After all, R1 and R2 had free usage of the Passageway outside Shop 7 for such business carried out at Shop 7 (they in effect expand the business space of Shop 7 for free) at the expense of remaining owners of the Estate (and the general public who has right to go pass or repass the Covered Walkway on foot under Special Conditions (11) of the Grant). Such countervailing benefits to them should, I think, be taken into consideration as well.

(9)  IO, as a statutory body, has a statutory duty under s.18(1)(c) of BMO to enforce the DMC. This important statutory duty of IO cannot, I think, be overlooked.

(10)  Built into the DMC is the concept of mutuality. For this reason and others, the Court of Appeal at [61] and [62] of Hollywood CA Judgment rejected on appeal the argument that plaintiff’s uninterrupted use of the subject canopy for more than 20 years with the acquiescence of the defendant was sufficient to make out a case of “notorious and avowed acquiescence” to give rise to a proper inference that the defendant had long since abandoned any legitimate interest in the enforcement of s.34I(1)(a) against the plaintiff, in other words the acquiescence and waiver had become a waiver for all time.

(11)  Hence, there is no special circumstance in this case (and Ms Yeung has failed to identify any in her submissions) that suggests that any equity in R1’s favour as from March 2015 ought to be satisfied by a proprietary interest.

(12)  Indeed, Special Conditions (11) of the Grant could well, I think, be a substantial legal obstacle to (and good reason against) such alleged proprietary interest in R1’s favour over the Passageway outside Shop 7 as submitted by Ms Yeung.

188.  Thirdly, had (contrary to my conclusions above) the respondents proven any assent and lying by on the part of IO for breaches of the DMC and BMO committed by G/F shop owners facing Mei Tin Road before September 2015, considering the matters raised in sub-paragraphs (8) to (12) of the preceding paragraph and enforcement actions taken by IO and the management of the Estate against R1 and R2 since 21/9/2015 Warning Letter, it cannot, I think, be said to be unjust in all the circumstances to grant injunctive relief to IO for similar breaches of Clause 14 and s.34I of BMO committed by R1 and R2 after September 2015.

189.  At Hollywood First Instance Judgment, the learned Recorder also only upheld the raised defence of acquiescence for plaintiff’s breaches up to 30 November 2008 but not for breaches thereafter due to defendant’s objection: see [23] to [25] of Hollywood CA Judgment. This part of first instance judgment was not disturbed on appeal despite cross-appeal was filed.

190.  For the reasons in this section, I therefore totally reject respondents’ defence of acquiescence despite the interesting legal arguments raised by Ms Yeung by reference to a host of United Kingdom authorities and legislation in her opening and closing.

191.  In view of my conclusion above, I do not find it necessary to consider, and resolve, the rival contentions of Mr Lo and Ms Yeung as to whether or not breaches of Clause 14 and of s.34I(1)(b)(i) of BMO are within the power of IO to waive or acquiesce.

192.  By way of completeness, this Tribunal would also reject Ms Yeung’s complaint of alleged “arbitrary” enforcement on the part of IO. On my factual findings in section F above, I accept paragraphs 13 and 15 of Leung’s supplemental witness statement. IO had, I find, taken legal proceedings at one time or another against Shop 1, Shop 2A, Shop 2BC, Shop 3A, Shop 3B, Shop 4, Shop 5, Shop 6 and Shop 7 all facing Mei Tin Road for breaches of the DMC and/or BMO regarding the Passageway outside these shops. There is no merit at all in Ms Yeung’s aforesaid complaint.

193.  Accordingly, Issue (4) above should, I think, be answered in the negative.

L.  Issue (5) – what relief is IO entitled to as against R1 and R2 ?

L1.  Mandatory injunction

194.  All circumstances of this case and parties’ submissions having been considered, I find it appropriate to order R1 and R2 to remove all goods and sundries placed at the Passageway outside Shop 7 as sought by IO.

L2.  Prohibitory injunction

195.  I also find it appropriate to restrain R1 and R2 from placing any goods or sundries at the Passageway outside Shop 7 in future.

L3.  Damages for breach of the DMC

196.  I agree with Mr Lo that, on the authority of IO of Percival House v Fusion Advertising Solution Ltd[34] and Wing Ming Garment Factory Ltd v IO of Wing Ming Industrial Centre[35], R1 and R2 are liable to pay IO damages for breach of the DMC for R2’s wrongful use of the Passageway outside Shop 7 since about November 2021. The proper measure of such mesne profit is the benefit they received (or the market rent they ought to pay) for the use of the Covered Walkway outside Shop 7 since about November 2021.

197.  However, IO provided at trial no evidence, be it oral evidence, documentary evidence or expert evidence, proving the value of the above benefit or market rent.

198.  Mr Lo invited me to rely on assertions made by Choi Senior and R2 that the area of the Passageway outside Shop 7 is equivalent to 1/3 of that of Shop 7 to arrive at the above benefit or market rent.

199.  I cannot accept Mr Lo’s invitation.

200.  First, I find the above assertions made by Choi Senior and R2 doubtful and unreliable. They could well have exaggerated the size of the area in question to serve other purposes of them. Secondly, no tenancy agreement of Shop 7 was produced at all. Thirdly, the market rental that one pays for indoor space of a shop premises like Shop 7 could well, I think, be affected by many considerations different from those affecting covered pedestrian walkway outdoor like the Covered Walkway. One may not comparing like against like. Adjustment may be required if comparison is to be made. All in all, I do not find it safe, reliable or appropriate to act upon the above assertions.

201.  In my views, IO therefore fails to prove the quantum of this claim and the same is dismissed.

M.  Disposition

202.  On my findings and conclusions above, I therefore enter judgment as follows:

(1)  R1 and R2 do forthwith remove all goods and sundries placed at the Passageway outside Shop 7 at their own expense;

(2)  R1 and R2, whether by themselves, their employees, their agents, persons authorized by them or occupiers with their express or implied consent, be restrained from placing any goods or sundries at the Passageway outside Shop 7 without IO’s consent;

(3)  IO’s claim for damages for breach of the DMC be dismissed; and

(4)  IO’s Solicitors do draft, file and serve this judgment on R1 and R2. The said judgment shall be endorsed with penal notice against R2, R1 and its officers.

N.  Costs

203.  Costs normally follow the event after trial. IO has, I think, substantially succeeded, and obtained most of the reliefs it sought in these proceedings, against R1 and R2 after trial.

204.  As such, I make a costs order nisi that the costs of this application, including all reserved costs and the costs of trial, including certificate for counsel, be paid by R1 and R2 jointly and severally to IO, to be taxed on District Court scale if not agreed.

205.  The above costs order nisi shall become absolute if none applies to vary it within 14 days of the handing down of this judgment.

206.  Finally, I thank Ms Yeung and Mr Lo for their written submissions.