黄景廉 v. 牡丹大厦業主立案法團

DCCJ 2313/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2313 OF 2009

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D E C I S I O N

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1.  The Plaintiff (“Wong”) commenced the present action for declaration of his rights by way of two decades of adverse possession of the scavenging lane in question (“the Lane”) which was a common part of the building in question (“the Building”). The Defendant is the Incorporated Owners of the Building (“the IO”). The IO denied the alleged adverse possession; and put forward a counterclaim.

2.  After trial, I handed down my written judgment on 11 November 2011 (“the Judgment”).  I found for Wong; and granted the following declarations:

(1) That the IO ceased to have any right of action to recover possession of the Lane by virtue of section 7(2) of the Limitation Ordinance, Cap.347 (“LO”);

(2) That the owners’ title to and interest in the Lane has been extinguished pursuant to section 17 of the LO.

3.  I dismissed the counterclaim of the IO.

4.  By way of summons dated 8 December 2011, the IO seeks leave to appeal.

5.  Pursuant to section 63A(2) of the District Court Ordinance, Cap.336, leave to appeal shall not be given unless the appeal has a reasonable prospect of success or in the interest of justice should be heard by the appellate court.

6.  According to the draft notice of appeal, the IO does not seek to challenge this court’s finding of facts amounting to adverse possession.  Essentially the IO argues that it should nevertheless be entitled to its counterclaim because of section 34I.

7.  Section 34I of the Building Management Ordinance, Cap.344 (“BMO”) reads:

(1)   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.

(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.

[emphasis added]

8.  Based on section 34I of the BMO, the IO sought, among other things, an injunction compelling Wong:

(1) to demolish the structure erected at the Lane;

(2) to move out of the Lane;

(3) to hand over possession of the Lane; and

(4) to refrain from using the Lane.

9.  The authorities cited by counsel during the trial were considered (see §62 of the Judgment).  They are now repeated for the purpose of this application.

10.  In the case of Man Hong Apartments (2001), the party alleging adverse possession of the common parts of the multi-storey building was in fact a co-owner.  The incorporated owners made clear that its claim was not based on recovery of possession but breach of the deed of mutual covenants.  The co-owner was bound by the covenants (by virtue of section 41 of the Conveyancy and Property Ordinance, Cap.219).  Therefore he might not claim adverse possession in breach of those covenants.  The judgment, including why the judgment in Nisbet and Potts’ Contract (1906) was referred to, must be read in such context (see pp.8-9).

11.  In The Incorporated Owners of Kwan Sen Mansion (2002), again the party alleging adverse possession was a co-owner of the building in question.  As far as the incorporated owners’ recovery of possession was concerned, the court cited the principle that the incorporated owners has a cause of action in tort against the co-owner, if his occupation of any common part of the building actually amounts to ouster of the others.  As far as the right to claim pursuant to section 34I of the BMO was concerned, the court did not, as he was not required in the circumstances of that case to, go beyond what the court in Man Hong Apartments considered in the context of a co-owner occupying the common parts in breach, or deemed to be in breach, of the deed of mutual covenants (see §§35-38).

12.  九龍漆咸道27A號業主立案法團 (2002) was the only case involving a person who was not a co-owner but a mere trespasser of the common part of the building.  Whilst the appellate court construed section 34I to be conferring on the incorporated owners the right of action against any person including a stranger to the deed of mutual covenants, no issue of adverse possession by the stranger, and hence its effect, was raised or seriously argued though.

13.  In the present case, Wong was never a co-owner of the Building or a party to the deed of mutual covenants governing the Building.  There is no question of unity of possession of the common parts of the Building between the owners and Wong.  The incorporated owners had the right of action to recover possession of the Lane from Wong as a trespasser.

14.  I stated my observation (at §63 of the Judgment):

“In view of my conclusion on the facts against the IO, a conclusion on this question of construction is not called for. In any event, for the purpose of the claim for possession, occupation rent and mesne profit or damages for trespass, as prayed for in the IO’s pleading, reliance on section 34I is unnecessary, even if not inappropriate. The right of the IO to commence proceedings on behalf of all the owners of the Building is conferred by sections 16 and 18. The cause of action against a trespasser, who is not a co-owner, of the common part of the Building is in tort. These would have been all the IO needed.” [emphasis added]

15.  Mr Leung (who did not appear at the trial) for the IO somehow suggested that his client’s claim is not for the recovery of possession of the Lane, but an injunction.  In my view, what his client sought under the counterclaim as pleaded is clear; and framing the same all together as part of an injunction does not change that.

16.  In any event, what the IO contends in the present case is effectively that the consequences of adverse possession by a stranger (even if proved against the incorporated owners) can nevertheless be defeated by the application of section 34I.

17.  In 九龍漆咸道27A號業主立案法團 , the Court of Appeal held that whilst section 34I applies only if there is in force a deed of mutual covenants, its application is not limited to a party bound by the covenants (see §§20-21).  Effectively, a stranger to the building and the deed of mutual covenants is caught.  Several aspects of the judgment should be noted.

18.  First, in giving a literal construction of “no person” and “any person” in section 34I, the appellate court took the view that it could not be the legislative intent that the incorporated owners has no right of action against trespassing strangers (see §19).  At the same time, it was acknowledged that the incorporated owners does have the common law right of action to recover possession of the common parts occupied by trespassing strangers (see §23).  This was indeed the cause of action in tort that I explained in the Judgment (above).

19.  Mr Yin for the IO, of course with respect to the appellate court, submitted that the section was introduced to ensure that the co-owners have a right of action against the infringing co-owners (particularly in the absence of proof of ouster) in a situation of unity of possession among them.  Reading the section as being applicable to strangers other than a co-owner bound by the deed of mutual covenants would go beyond that.  I find the submission to be persuasive.

20.  Secondly, the appellate court held that any person (even a stranger) who comes to occupy the common parts of a building in whatever form becomes bound by the deed of mutual covenants (see §22).  The case of Man Hong Apartment was referred to in support. But in view of the context in which the court in Man Hong Apartment considered the relevant principles as mentioned above, I am concerned whether the court in that judgment indeed went as far as that understood by the court in九龍漆咸道27A號業主立案法團.

21.  九龍漆咸道27A號業主立案法團  is a higher authority to this court.  However that the discussion there without the benefit of proper legal arguments on behalf of the respondent, who was not legally represented, could not be ignored.  The intended appeal (as per the draft notice) raises one key question, namely, whether in view of the findings of adverse possession in favour of Wong (which is not and could not be reasonably challenged), the IO is nevertheless entitled to its counterclaim because of the application of section 34I of the BMO.  I am satisfied on both limbs of section 63A(2) that leave to appeal should be given in respect of the counterclaim.

Conclusion

22.  I give leave to appeal as mentioned above.  Acknowledged by counsel, the appropriate costs order should be one for the costs of this application to be in the cause of the appeal.  I so order.  Wong’s own costs shall be taxed subject to legal aid regulations.