LAM PUI AND ANOTHER v. THE INCORPORATED OWNERS OF BEVERLY GARDEN

LDBM 360/2005

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Building Management Application No. LDBM 360 of 2005

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JUDGMENT

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Background

1. The Applicants are the owners of a shop premises known as Shop No. 110 on the Ground Floor, Beverly Garden, No. 1 Tong Ming Street, Tseung Kwan O, Sai Kung, New Territories, Hong Kong (“the Shop”).  The Shop forms part of the estate known as Beverly Garden (“the Estate”).  The Respondent is the owners’ corporation of the Estate and has appointed Kong Shum Union Property Management Co. Ltd. as the manager of the Estate (“the Manager”).

2. The Estate has a Deed of Mutual Covenant (“the DMC”) governing the rights and obligations of the owners of the Estate.  In addition, there is also a Sub-Deed of Mutual Covenant (“the Sub-DMC”) making further provisions for the management of the shops in the Estate.

3. In October 2004, pursuant to the DMC, the Manager made and promulgated a Decoration Guide for the Shops in the Estate (“the Guide”) requiring the owners of the shops in the Estate to submit applications in respect of decoration works carried out at their shops to the Manager for approval.

4. By a tenancy agreement in Chinese dated 22 April 2005 (“the Tenancy Agreement”), one Tse Kam Wan (“the Tenant”) agreed to rent the Shop from the 1^st named Applicant for a term of one year from 1 May 2005 at the rent of $15,000.00 per month (exclusive of rates and management fee).  The Tenant intended to run the business of an internet-bar at the Shop and had to decorate the Shop for such purpose.

5. In early May 2005, the Applicants submitted to the Manger an application for decoration work at the Shop pursuant to the Guide.  Nevertheless, the Manager refused to approve the application on the ground that the purported user of the Shop as an internet-bar would breach Clauses A6 and A12 of Section IV of the DMC.

6. Furthermore, when the Applicants applied to the Manager to have access to the transformer room of the Estate for the purpose of connecting power supply to the Shop, the application was also refused on the ground that the nature of the business at the Shop had not been approved.

7. As the Tenant was unable to carry out decoration work at the Shop, the Tenant requested the Applicants to cancel the Tenancy Agreement.  The Tenancy Agreement was then cancelled on 30 September 2005.

8. The Applicants contend that the refusals to approve the decoration work at the Shop and to allow the Applicants to have access to the transformer room were wrongful and have deprived the Applicants of the proper use and enjoyment of the Shop, as a result of which, the Applicants have suffered loss and damage.

9. The Applicants therefore commenced the present application against the Respondent for the following reliefs:-

(1)  a declaration that the purported user of the Shop as an internet-bar does not contravene the DMC and the Sub-DMC;

(2)  a declaration that the refusal of the Application by the Respondent is wrongful;

(3)  an Order that the Applicants or the electrical contractor authorized by the Applicants be allowed to have access to the transformer room for the purpose of connecting the power supply to the Shop;

(4)  damages;

(5)  costs of this Action; and

(6)  further and/or other relief.

10. The parties have agreed at the trial that the quantum of damages is to be tried separately from liability.  The Applicants have also withdrawn their claim for the first declaration order stated above.  Thus, I will only deal with the Respondent’s liability in respect of prayers (2) and (3) as stated above.

The issue

11. The parties have no dispute on the facts of the case and hence no witnesses were called.  The bundle of documents of the parties were produced as evidence and marked as exhibit “AR-1”.  The parties have also prepared the agreed facts, which is produced and marked as exhibit “AR-2”.  The parties then proceeded with the trial by way of submissions.

12. The only issue in this case is whether Clauses A6 and A12 of Section IV of the DMC prohibit the intended use of the Shop as an internet-bar.

The DMC

13. Clause A6 of Section IV of the DMC reads as follows:-

“No Owner shall use the Estate or any part thereof … for any purpose other than for non-industrial … purposes but excluding any trade or business of which in the opinion of the Director of Lands is noisy, noisome or offensive or which may constitute a nuisance or annoyance to the other occupiers of the Estate … or for any illegal or immoral purpose.”  (underline added)

14. Clause A12 of Section IV of the DMC reads as follows:-

“No Owner will use or permit or suffer the part of the Estate owned by him to be used for any illegal or immoral purpose nor will he do cause or permit or suffer to be done any act or thing which may be or become a nuisance or annoyance (including playing “mahjong” between 11:00 p.m. and 7:00 a.m.) …”  (underline added)

The Respondent’s arguments

15. The Respondent does not seek to argue that the intended use of the Shop as an internet-bar is an offensive, illegal or immoral trade, but contends that the intended use may constitute a nuisance or annoyance to the other occupiers.  The Respondent relies on the words “may” in Clause A6 and “may be or become” in Clause A12 to argue that the issue is not whether an internet-bar is or is not a nuisance, but whether the operation of an internet-bar at the Shop “may become” a nuisance or annoyance.

16. The Respondent submits that in an action for nuisance and/or annoyance, the question is always whether the use or intended use of the land by one of the owners will unreasonably interfere with the other owners’ (or occupiers’) use and enjoyment of the land or some right over or in connection with the land (see Kent, Merry and Walters: Building Management in Hong Kong, pp. 304-305).  The Respondent contends that unreasonableness is a question of fact and the court is entitled to take into account all the relevant factors in deciding this matter.

17. The Respondent relies on some of the incident reports of the Estate to submit that the customers of internet-bar tend to be unruly, noisy and had little regard for the occupiers or other shops and their customers and that they may even end up in gang fight.  The Respondent also submits that the Applicant has chosen not to reply to the Respondent’s evidence in this regard.

18. The Respondent refers to two cases, Wauton v. Coppard [1899] 1 Ch 92 and Tod-Heatly v. Benham (1889) 40 Ch 80, and submits that the present case is similar to these two cases.  In Wauton v. Coppard, the court held that running a boys’ school was capable of amounting to nuisance, whereas in Tod-Heatly v. Benham, it was held that the establishment of a hospital for the treatment of outdoor patients would bring annoyance to the inhabitants of neighbouring or adjoining houses.

19. The Respondent submits that the court is not dealing with an open-ended question of whether certain use of the land is or is not nuisance or annoyance, but the issue must be decided on the evidence before the court, and that there is sufficient evidence of nuisance or annoyance in the present case.

Any breach of Clauses A6 and A12

20. I accept the Respondent’s argument that the issue must be decided on the evidence before the tribunal.  However, I do not agree that there is sufficient evidence to establish that the intended use of the Shop as an internet-bar by the Tenant would constitute a nuisance or annoyance to the other occupiers.

21. First of all, the Tenant had not commenced business at the Shop, so there is no direct evidence that the operation of the intended internet-bar would cause nuisance or annoyance to the other occupiers.  The Respondent is merely relying on the evidence of some previous incidents concerning another internet-bar in the Estate.  The previous complaints were actually in relation to the conduct of the customers outside the internet-bar, rather than the operation of the internet-bar as such.  In fact, as pointed out by the Applicants, the “trouble-makers” were not just patrons to the internet-bar.  From the incident reports, it is clear that some of the “trouble-makers” actually gathered outside the Seven-Eleven shop and the snack shops in the Estate.  So the internet-bar should not be blamed for attracting these people to gather in the Estate.

22. It is not true that the Applicants have chosen not to reply to the Respondent’s evidence.  As aforesaid, the Applicants have actually made reference to the incident reports and pointed out that the “trouble-makers” were not just patrons to the internet-bar.

23. There should also be a distinction between the acts of the customers outside the internet-bar and the acts of carrying on the business of an internet-bar.  The acts of the customers outside the internet-bar are beyond the control of the operator of the internet-bar.  Clauses A6 and A12 are not in any way intended to restrict the behaviour of the customers outside the shops.  The evidence relied on by the Respondent only shows that there might be problems caused by the customers outside the internet-bar, but fails to establish anything wrong with the operation of the internet-bar.

24. The present case is also different from the two cases relied on by the Respondent.  In Wauton v. Coppard, the running of a boys’ school would have its inherent problem of noise generation, such as bell ringing, boys shouting at play or noise generated when the boys were let out from school, and that may cause nuisance to other people.  However, when the customers are using the facilities inside the internet-bar, they should not create too much a noise that would cause nuisance to the other occupiers.  There is in fact no evidence that the normal use by the customers inside an internet-bar or the letting out of customers in the normal course of event would cause any nuisance to the other people.  What the customers would do before they entered into the internet-bar or after they have left has absolutely nothing to do with the operation of the business there.

25. Likewise, the establishment of a hospital as in Tod-Heatly v. Benham is different from the carrying on of the business of an internet-bar.  In the situation of a hospital, there may well be a reasonable apprehension of the risk of infection to the neighbours and hence such use may amount to an annoyance or nuisance.  However, I think it is too far-fetched to suggest that there is a reasonable apprehension that the customers of an internet-bar would cause trouble.  The evidence does not support this contention either.  As aforesaid, the “trouble-makers” actually gathered at other shops as well.  If the Respondent’s contention were correct, it would mean that the Seven-Eleven shop and the other snack shops would cause annoyance to the other occupiers and should be closed down too.

26. The words “may”, “may be” or “become” in Clauses A6 and A12 must be referring to the nature or operation of the business rather than the customers.  If it were the latter, the Respondent would have power to stop any business from operating at the Shop, since there may be trouble-making customers in any business.  Such an interpretation is clearly unreasonable and must be wrong.

27. As the evidence in this case, put it to the highest, only suggests that the customers of an internet-bar may cause annoyance or nuisance to the other occupiers, I do not agree with the Respondent that the intended use of the Shop as an internet-bar would breach Clauses A6 or A12.

Conclusion

28. Thus, it is wrong for the Respondent, through the Manager, to refuse the Applicants’ application for decoration of the Shop and to refuse the Applicants’ access to the transformer room.  The Applicants are entitled to the orders sought.

29. I therefore order as follows:-

(1)  It is declared that the Respondent’s refusal of the Applicants’ application to decorate the Shop is wrongful.

(2)  The Respondent do allow the Applicants or the electrical contractor authorized by the Applicants to have access to the transformer room of the Estate for the purpose of connecting the power supply to the Shop.

(3)  Costs order nisi: The Respondent do pay costs of this application to the Applicants to be taxed on District Court Scale if not agreed.  If there is no application for costs within the next 14 days, this costs order nisi shall become absolute.