MEMORAN CO LTD v. THE INCORPORATED OWNERS OF MEI HING MANSION

CACV 48/2021, [2023] HKCA 841

On Appeal From [2021] HKCFI 154

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 48 OF 2021

(ON APPEAL FROM HCCT NO 18 OF 2020)

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J U D G M E N T

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Hon Au JA (giving the judgment of the court):

A.  INTRODUCTION

1.  This is the appeal brought by the defendant against the Order of Recorder Houghton SC (“the Recorder”) dated 8 January 2021 (“the Order”).

2.  By the Order, the Recorder granted the plaintiff’s application seeking summary determination of a question of law or construction and held that the reinforced concrete steel bars (“RC steel bars”) and the surrounding concrete in the slab between 3^rd and 4^th floors (“the Structural Concrete Slab”) of Mei Hing Mansion (“the Building”) is a common part of the Building.  The Recorder further granted declarations to the effect that the defendant is responsible under the Building’s Deed of Mutual Covenant dated 23 March 1985 (“the DMC”) and the Buildings Management Ordinance, Cap 344 (“the BMO”) to repair, replace, improve and otherwise remedy the spalled concrete and the steel reinforcement in the slab which has been exposed, seriously oxidized and/or damaged by rusting.

3.  After lodging this appeal, on 25 March 2021, the defendant made an application for leave to adduce new evidence on appeal and an application for leave to amend the Defence dated 1 August 2020.  They were rejected by this court (Au and Chow JJA) by its judgment on 10 August 2021 ([2021] HKCA 1146) (“the New Evidence Judgment”).

4.  At the end of the hearing of the appeal, we reserved our judgment to be handed down.  This is what we do now.

B.  BACKGROUND

5.  The factual background of this case has been set out at [3] ‑ [12] of the Recorder’s Reasons for Decision dated 25 January 2021 ([2021] HKCFI 154) (“the Reasons”) and at [3] ‑ [10] of the New Evidence Judgement and need not be repeated here.  For the present purpose, we will highlight the following.

6.  The defendant is the incorporated owners of the Building.  The plaintiff is the registered owner of the 3^rd floor of the Building (“the Premises”).  Since 2010, the plaintiff’s tenant has been operating an elderly nursing home at the Premises.

7.  Above the Premises are residential units on the 4^th floor of the Building and some separate roof areas.  Separating the Premises and the 4^th floor is a concrete slab, the underside of which forms the ceiling of the Premises.

8.  Insofar as the floor surface of the 4^th floor is concerned, it is common ground between the parties that those parts which form the floor of the residential units are in exclusive possession of the respective owners of those units, whilst those parts which form the roof areas are common parts of the Building.

9.  Since about 2016, the plaintiff’s tenant has been experiencing water seepage problems at the ceiling of the Premises.  Inspection of the Structural Concrete Slab further reveals concrete spalling around the RC steel bars and serious oxidation and rusting of the exposed RC steel bars.

10.  By a writ issued on 7 May 2020, the plaintiff commenced an action against the defendant seeking (a) a mandatory injunction to compel the defendant to carry out all necessary and proper repair, maintenance, remedial measures and improvements to the Structural Concrete Slab, and rectify the water seepage at the ceiling of the Premises, and (b) damages for breach of the DMC.  It is the plaintiff’s case that the Structural Concrete Slab is a common part of the Building for the purpose of the DMC and the BMO, and the defendant is under a duty to effect the necessary and proper repair and maintenance of the Structural Concrete Slab.

11.  By its Defence dated 14 August 2020, the defendant denies that the Structural Concrete Slab is a common part of the Building, and contends that it is not obliged to carry out the repair and maintenance works as claimed by the plaintiff.  The defendant also alleges that the cause or source of the water seepage at the ceiling of the Premises cannot be identified despite various inspections and other investigative steps taken, and thus it is not in a position to determine the requisite repair or maintenance works to be carried out.

12.  On 1 December 2020, the plaintiff issued a summons dated 30 November 2020 under Order 14 and Order 14A (“the O14/O14A Summons”) of the Rules of the High Court, Cap 4A (“the RHC”). In the O14/O14A Summons, the plaintiff asks for the following relief:

(1)  summary determination of a question of law or construction (“the Question”), namely:

“Whether, on a true construction of the Deed of Mutual Covenant and/or the Building Management Ordinance, Cap 344, the RC steel bars and the surrounding concrete in the floor slab between the 3^rd and 4^th Floors of Mei Hing Mansion (‘the Structural Concrete Slab’) constitute a common part of the building.”

(2)  The Question be answered in the affirmative.

(3)  Judgment be entered against the defendant for:

(a)  An order that the defendant do forthwith repair, replace, improve and otherwise remedy the spalled concrete in the Structural Concrete Slab; and

(b)  An order that the defendant do forthwith repair, replace, improve and otherwise remedy the steel reinforcement in the Structural Concrete Slab which has been exposed, seriously oxidized and/or damaged by rusting.

(4)  Costs of and occasioned by this application together with the costs of this action be to the plaintiff, to be taxed if not agreed.

C.  THE ORDER AND THE REASONS

13.  The O14/O14A Summons came before the Recorder for hearing on 8 January 2021 which was fixed for 15 minutes.  The plaintiff was represented by counsel while the defendant by solicitor.

14.  At the hearing, the defendant’s solicitor submitted that the application and relief sought under the summons were not appropriate for an Order 14A determination and asked for various directions for the filing of affirmation and amendment of the Defence.

15.  On the other hand, the plaintiff’s counsel contended that it was appropriate for the O14/O14A Summons to be determined at that hearing and in support, the plaintiff relied heavily on the following provisions of the BMO and the DMC:

(1)  Section 18(1) of the BMO, which reads:

“The corporation shall—

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

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

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

(2)  Section 2 of the BMO, “common parts” refer to:

“(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;”

(3)  Schedule 1 of the BMO further defines common parts including:

“1. External walls and load bearing walls, foundations, columns, beams and other structural supports.

2. Walls enclosing passageways, corridors and staircases.

3. The roofs, chimneys, gables, gutters, lightning conductors, satellite dishes and ancillary equipment, aerials and aerial cables.”

(4)  Section 3(u) of the DMC defines common areas as follows:

“(u) the common areas and common services and facilities referred to in this deed shall include the following:-

(i) The lobbies, lifts lobbies, entrances, staircases, landings, passages corridors and lifts which are not included in any part of the said Building exclusively owned by one owner or several co-owners.

(ii) The sewer, gutter, drains, watercourses, cables, walls, pipes, pumps, tanks, wires, sanitary fittings, fire lighting and refuse disposal equipment and other apparatus and equipment used or installed for the benefit of the said Building as part of the amenities thereof and not by any individual owner for his own use or purposes.”

16.  The Recorder found it appropriate to proceed to deal with the application substantively and at the conclusion of the hearing, the Recorder made the Order and held that the Question be answered in the affirmative.  He further entered judgment against the defendant for the following declaratory relief (collectively “the Declarations”):

(1)  A declaration that the defendant is responsible under the DMC and the BMO to repair, replace, improve and otherwise remedy the spalled concrete in the Structural Concrete Slab; and

(2)  A declaration that the defendant is responsible under the DMC and the BMO to repair, replace, improve and otherwise remedy the RC steel bars in the Structural Concrete Slab which has been exposed, seriously oxidized and/or damaged by rusting.

17.  The Recorder further granted the costs order as sought under paragraph 4 of the O14/O14A Summons, in that, costs of and occasioned by this application together with the costs of this action be to the plaintiff, to be taxed if not agreed (“the Costs Order”).  See paragraph 4 of the Order.

18.  The Recorder later handed down the Reasons to explain why he made the Order.  Those reasons can be summarised as follows.

19.  First, the Recorder held that the plaintiff’s application under Order 14A of the RHC was an appropriate one as he considered that the clarification of the party bearing the legal responsibility for the maintenance of the concrete slab in question provided assistance to the parties in the present case: [17] ‑ [18] of the Reasons.

20.  Second, the Recorder concluded that, as a matter of construction, the Structural Concrete Slab is a common part of the Building as:

(1)  Although the term “slab” was not used expressly in the BMO, the formulation in Schedule 1 was to be read inclusively and in such a way to encompass matters of a similar nature and function.[1]  Accordingly, the Structural Concrete Slab fell within the definition of a “common part” in part as a “structural support” (item 1 of Schedule 1) and in part as a roof (item 3 of Schedule 1) under the BMO: [22] and [23] of the Reason.

(2)  As the Structural Concrete Slab functioned both as the “ceiling” of the plaintiff’s premises and also as a roof, or in part a floor of the 4^th floor, it had not been allocated to the exclusive occupation of the plaintiff or anyone else.  Accordingly, the Structural Concrete Slab constituted a “common part” under the DMC or section 2 of the BMO: [24] ‑ [25] of the Reasons.

21.  Third, the Recorder was of the view that the relief sought at paragraph 3 of the O14/O14A Summons were orders to the effect that the defendant should act on its responsibility to make good the defective and damaged concrete in the relevant slabs which was in effect an Order 14 judgment.  He therefore regarded this not suitable for summary and final determination given that the underlying cause and extent of such damage was fact‑sensitive and triable.  At the suggestion of the Recorder, the plaintiff through counsel then agreed to “amend” this part of the summons to seek instead a “simple” declaration of responsibility on the part of the defendant to repair the RC steel bars and the spalled concrete within the Structural Concrete Slab.  See: [19] ‑ [21] of the Reasons and pp 8E ‑ 10G of the transcript of hearing before the Recorder[2].

22.  In those circumstances, the Recorder was of the view that, as a matter of construction, the defendant must have the “responsibility” under the BMO and the DMC to “to repair, replace, improve and otherwise remedy” the unserviceable conditions of the Structural Concrete Slab (which is a common part of the Building), even though the cause and extent of the damage of the Structural Concrete Slab has yet to be tried and determined.  He therefore made the Declarations.  See: [19] ‑ [26] of the Reasons.

D.  EVENTS AFTER THE ORDER

23.  Subsequent to the Reasons, on 23 December 2021, upon the plaintiff’s application on the basis that the defendant had not carried out the repair under the Declarations, Deputy High Court Judge Winnie Tsui (“DHCJ Tsui”) granted an interlocutory mandatory injunction against the defendant requiring it to repair the Structural Concrete Slab ([2022] HKCFI 50) (“the Injunction Decision”).  On 3 May 2022, DHCJ Tsui further varied the injunction order such that the plaintiff would have the carriage of the repair works instead of the defendant as no repair works had commenced after the injunction was granted ([2022] HKCFI 1488) ([2022] 2 HKLRD 1125).

E.  THIS APPEAL

E1.  Grounds of appeal

24.  By a Notice of Appeal dated 5 February 2021, the defendant appeals to this court against “the Reasons and Order” and seeks to set aside both of them.  The Notice of Appeal contains four grounds, numbered as 1, 2, 5 and 6 (without 3 and 4), namely:

(1)  In granting the Declarations, the Recorder erred in failing to consider that even if the Structural Concrete Slab was a common part of the Building, there was still a factual issue to be decided as to who caused the damage to the spalled concrete and the RC steel bars of the Structural Concrete Slab and was thus responsible for repairing the consequential damage to the Structural Concrete Slab.  (“Ground 1”)

(2)  In granting the Declarations, the Recorder erred in failing to consider paragraphs 8(a), 8(c), 8(f) of the DMC and that there were factual issues which should be decided at trial and judgment on liability should not be entered against the defendant in an Order 14A application.  (“Ground 2”)

(3)  The Recorder erred in deciding the O14/O14A Summons in a directions hearing fixed for 15 minutes and failing to grant the directions sought by the defendant to file an affirmation to support the factual disputes and to amend the pleading.  Accordingly, judgment should not be entered for the plaintiff if there was a factual issue as to whether the plaintiff caused the damage.  (“Ground 3”)

(4)  In making the Costs Order, the Recorder erred in holding that this application together with the costs of this action be to the plaintiff. (“Ground 4”)

25.  At the hearing of the appeal, Cheung JA drew the parties’ attention to the authorities of Westlands Garden (IO) v Oey Chiou Ling [2011] 2 HKLRD 421 and Tam Sze Man v Shan Tsui Court (IO) [2011] 2 HKLRD 421 which considered the question of whether a dividing wall constituted a common part.  This court further gave leave to the parties to make further written submissions on them after the hearing.  They respectively lodged their supplemental skeleton submissions on 7 June 2022.

E2.    Initial observations of the Notice of Appeal

26.  Before considering the merits of the appeal, we wish to make two initial observations about the Notice of Appeal and its grounds.

27.  First, it is trite that a party is only to appeal against an order made by the court but not the reasons for making the order. It is therefore plainly wrong for the defendant to state in the Notice of Appeal (drafted by counsel) that it appeals against also the Reasons and seeks to set aside the Reasons.  See: White Book 2023, paragraph 59/0/11.

28.  Second, it is pertinent to note that the defendant seeks to set aside the Order as a whole in this appeal, which includes the Recorder’s conclusion that the Structural Concrete Slab is a common part.  However, the defendant has not advanced any bases or reasons in the grounds of appeal to challenge the Recorder’s conclusion in this respect.  Similarly, in counsel’s written submissions dated 29 April 2022, Mr Wong for the defendant has not advanced any arguments to say why the Recorder’s said holding is incorrect.  It is only in the supplemental skeleton submissions dated 7 June 2022 lodged after the hearing of the appeal that Mr Wong has made submissions as to why it is arguable that the Structural Concrete Slab is not a common part.

29.  With these two observations in mind, we will now turn to consider the grounds of appeal in turn.

E3.    Grounds 1 and 2

30.  Grounds 1 and 2 can be conveniently considered together as they both relate to the defendant’s contentions that the Recorder should not have granted the Declarations.

31.  Under these grounds, Mr Wong in gist argued that even if the Structural Concrete Slab was a common part of the Building, the Recorder erred in granting the Declarations on a summary basis as:

(1)  He had failed to consider that there was an underlying triable factual issue as to the cause of damage, which included the issue as to who had caused the water seepage that resulted in the damage of the spalled concrete and the RC steel bars inside the Structural Concrete Slab. These triable questions, said Mr Wong, would directly impact on the questions of who should be responsible for carrying out and paying for the repair of the damaged parts of the Structural Concrete Slab.  In the premises, given these underlying triable issues, no judgment on liability can be entered against the defendant summarily under an Order 14A application.

(2)  He had failed to take into account paragraphs 8(a), 8(c) and 8(f) of the DMC in concluding that the defendant is liable to repair and remedy the damage to the Structural Concrete Slab.

32.  Mr Bernard Man SC (leading Mr Danny Tang) for the plaintiff[3] however submitted that, once the Structural Concrete Slab is regarded as a common part of the Building, it was entirely open to and indeed correct for the Recorder to grant the Declarations on a summary basis under an Order 14A determination. This is so as whether the defendant is liable and duty bound to repair and remedy the concrete spalling and RC steel bars within the Structural Concrete Slab is purely a question of the proper construction of section 18(1)(a) of the BMO, which reads as follows:

“The corporation shall—

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

33.  Mr Man contended that the plain and express meaning of section 18(1)(a) is clearly to require an incorporated owners to, among others, maintain the common parts in a state of good and serviceable repair.  In the premises, once the Recorder formed the correct view that the Structural Concrete Slab is a common part of the Building, as a matter of construction, the defendant then carries the legal duty to keep the Structural Concrete Slab in a state of good and serviceable conditions.  The Recorder was entitled and right to make the Declarations.

34.  In relation to these submissions, this court had posed various questions to Mr Man on whether it would be the proper construction of section 18(1) of the BMO for incorporated owners to carry out the duty to repair a common part of a building irrespective of whether the damage to the common part was caused by a complainant owner, some other owners or an outside third party.

35.  In response, Mr Man submitted that such a construction is a proper one as it is not only consistent with the plain and express meaning of the words used in the provision, but also with common sense.  This is also consistent with the obvious purpose of the provision to have a practicable, speedy and efficient way to ensure that a damaged common part is repaired and maintained in a serviceable condition for the use of all the owners, leaving it for the incorporated owners to later sort it out, or if necessary, litigate it out with any parties as to who should be ultimately responsible for the costs of the repair.  Mr Man further contended that, if the construction is otherwise, it may in many circumstances lead to a long delay in having the common part repaired for use, which in turn in some cases (as in the present) may also result in increased risks of personal injuries to the users of that common part.  This, Mr Man said, cannot be the intended purpose of section 18(1) of the BMO.

36.  Mr Man’s submissions are not without force, but the effect of counsel’s proposed construction of section 18(1)(a) of the DMC may also lead to apparently absurd results.  For example, as put to Mr Man by Chow JA at the hearing, as in the present case, even if it turns out at the subsequent trial that it is in fact the plaintiff who had caused the damage to the Structural Concrete Slab, Mr Man’s construction would still mean that the plaintiff itself can first sue the defendant, obtain a summary judgment against the defendant compelling it to carry out the repair, leaving it to the defendant to later seek reimbursement for the costs of repair from the plaintiff at a trial.  One must also ask could this also be the purpose intended by the legislature?

37.  We find this not an easy question.  However, we do not think it is either appropriate or necessary for us to decide this question in this appeal because:

(1)  For the reasons we will explain below, we do not think the Recorder was correct in granting the Declarations in any event.

(2)  There may well be relevant legislative materials that would reflect on the intended purpose of section 18(1) of the BMO which are not available for consideration in this appeal.

38.  First, it is important to note that in the O14/O14A Summons, the original relief sought by the plaintiff at its paragraph 3 is to have a judgment entered summarily against the defendant to “forthwith repair, replace, improve and otherwise remedy” (emphasis added) the spalled concrete and the RC steel bars in the Structural Concrete Slab.  As mentioned above, the Recorder however did not find it right to grant such relief on summary basis as the underlying issues of the cause and extent of the damage were triable.  Instead he proceeded to grant the declarations that the defendant is “responsible under the DMC and BMO to repair, replace, improve and otherwise remedy” (emphasis added) the spalled concrete and the RC steel bars.

39.  The Recorder explained why he proceeded in that way at [19] and [20] of the Reasons:

“19. Paragraph 3 of the summons sought orders that the defendant should act on its responsibility to make good defective and damaged concrete in the relevant slabs. This was a more problematic request since the extent of such damage was indeterminate, as was its cause (albeit that some expert evidence has been provided by the plaintiff). This was not a question of interpretation or construction, and was factually sensitive, so the paragraph sought a judgment under O.14 in effect.

20. Since it was clear that the cause and extent of damage required factual evidence (at least), this paragraph as framed was not amenable to final determination at this stage. Accordingly, through discussion at the hearing, the form of relief sought by these paragraphs was modified, so as to become a ‘simple’ declaration of responsibility on the part of the defendant for such repairs as may be required.” (emphasis added)

40.  Hence, the Recorder recognised that the effect of granting those orders as originally sought in the Summons was to compel the defendant to “act on its responsibility to make good defective and damaged concrete in the relevant slabs”[4], and was of the view that it should not be granted summarily as this was not a question of construction, but one that was factually sensitive and triable.  The Recorder then sought to avoid this by granting a “simple declaration of responsibility on the part of the Defendant for such repairs as may be required”[5].

41.  The Recorder therefore plainly regarded that there was a difference in the effect and nature of these two different forms of relief, in that the former relief once granted would require the defendant to actually act to carry out the repair to remedy the damage in the Structural Concrete Slab before the trial of the underlying issues on the cause and extent of damage, while the latter would only spell out the legal duty first pending the determination of those issues at trial.

42.  In other words, what the Recorder intended in granting the Declarations must be that the defendant was not required to act and proceed to carry out any repair works before the trial and determination of the cause and extent of the damage of the Structural Concrete Slab.

43.  Given that the Declarations do not have the effect of requiring the defendant to act before the trial and determination of the underlying issues of the cause and extent of damage of the Structural Concrete Slab, it is clear that granting the Declarations at this stage would serve no useful purpose as everything would have to be determined after the trial.

44.  In this respect, it is trite that in deciding whether or not to grant declaratory relief, the court in the exercise of its discretion will consider whether any useful purpose would be served by granting the relief: White Book 2023, at paragraph 15/6/2.  If a declaration would not serve any useful purpose, this will weigh heavily against the grant of declaratory relief: Equis (Hong Kong) Limited v George Allen Cowan [2021] HKCFI 768 at [39].  As also observed by Ribeiro PJ in Kao, Lee & Yip v Lau Wing (2008) 11 HKCFAR 576 at p.591H:

“… a declaration is a discretionary remedy which the courts will only consider granting where conduct in accordance with the declaration sought can be expected to bring about legitimate and realistic relief.”

45.  Mr Man at paragraph 22 of his Amended Skeleton Submissions[6] however suggested that the Recorder “clearly saw utility in such an express declaration in that it would prompt the IO to take immediate steps”.  He further referred to certain parts of the transcript of the hearing before the Recorder[7] and [20] of the Reasons to support his submissions.

46.  With respect, we do not see how [20] of the Reasons (as quoted above) supports Mr Man’s submissions.  As we have just explained, [19] ‑ [20] of the Reasons properly and objectively read show that the Recorder intended otherwise in deciding to grant the Declarations instead of the relief as originally sought under O14/O14A Summons.

47.  As to the reliance on the transcript of the hearing, the relevant parts of it are as follows[8]:

“COURT: Mr Wong [defendant’s solicitor], I am proposing that paragraph 3 of the summons be slightly amended or in terms of the order I will make so as to represent a declaration that the defendant is responsible for the repair and maintenance. So the wording will be slightly modified and obviously the ‘forthwith’ would have to come out although no doubt the court would expect ...

MR WONG: May I request my learned friend to repeat the whole sentence how -- what is his suggestion?

COURT: Yes. The wording will have to be resolved, Mr Wong, but in essence what I’m suggesting is that the paragraph 3 ...

MR WONG: Paragraph 3, yes.

COURT: ... be changed into a declaration rather than an order and it’s a declaration as to the responsibility of your clients for the repair, replacement, etc.

MR WONG: You mean replace the word ‘Order’, just to replace the word ‘Order’ to ‘Declaration’?

COURT: Yes.

MR WONG: Okay, in both 3(1) and 3(2)?

COURT: I’m sorry?

MR WONG: Do you mean amend both 3(1) and 3(2)?

COURT: (1) and (2). Do you have any observation on that?

MR WONG: My Lord, if that is the case the plaintiff has to formally take out an application to amend his summons and for the defendant’s consideration.

COURT: No, they don’t. I’m asking for your observation on the terms of the order.

MR WONG: Sorry.

COURT: Do you have anything you wish to say about it, anything else you wish to say about it?

MR WONG: Sorry, I cannot hear clearly from you. I’m so sorry.

COURT: Mr Wong, do you have anything else you wish to say other than that you believe it should be done by a formal summons to amend?

MR WONG: Because the plaintiff is now deleting the word ‘Surrounding concrete’ and also changing ...

COURT: The plaintiff is not.

MR WONG: Not?

COURT: Not.

MR WONG: He is not deleting the ...

COURT: Paragraphs 1 and 2 will remain as they are.

MR WONG: Okay. The only change is changing from – replacing the word ‘Order’ in paragraph 3(1) and 3(2) to ‘Declaration’ is that the only change?

COURT: Yes.

MR WONG: Okay, then the defendant has no objection to that.

COURT: Thank you.

MR LEE [plaintiff’s counsel]: My Lord, I know that you probably know this already, but I just want to reassure your Lordship that Order 14A, rule 1(2) expressly provides the court with the power to make such order as the court thinks just upon determination of the summary determination so there is no need to amend.

COURT: Yes, thank you, Mr Lee, thank you. So subject to those amendments, I will make an order in terms of paragraphs 1, 2 and 3 of this summons, as amended, and paragraph 4, costs, Mr Wong, do you oppose an application for costs? Mr Wong?

MR WONG: Yes, no objection.

COURT: Thank you. Right, is there anything else, Mr Lee?

MR LEE: Nothing else.

COURT: Thank you. Mr Wong, is there anything else?

MR WONG: No, no further.

COURT: All right, so there will be order in those terms. I will give, for the assistance of the parties, brief reasons as to why the determination has been made in due course.

MR LEE: Grateful, my Lord.”

48.  Again, we do not see how these parts of the transcript when properly read, in particular in the context of what the Recorder had said at [19] and [20] of the Reasons, would show that the Recorder in granting the Declarations intended the defendant to “take immediate steps” to carry out the repair and remedy works as submitted.

49.  In the premises, for the reasons explained above, the Recorder erred in principle in his exercise of discretion in granting the Declarations under the O14/O14A Summons as they would not serve any useful purpose before the trial.  In reconsidering it afresh, we do not think it is right to make those declarations on a summary basis, especially when:

(1)  It is common ground between the parties that the questions of the cause and extent of the damage would have to go to trial.  In this regard Mr Man had also fairly accepted at the hearing that the problems of the concrete and steel bars in the Structural Concrete Slab were related to the water seepage, the cause of which was triable; and

(2)  As also accepted by Mr Man at the hearing that, even without the Declarations and while pending trial, it was still open to the plaintiff to obtain a mandatory injunction against the defendant to require it to repair and remedy the damage if the plaintiff had a good arguable case against the defendant (on the construction of section 18(1) of the BMO) and the balance of justice (taking into account the risks that are associated with the Structural Concrete Slab not being repaired in the meantime) favoured the granting of an injunction.  See: Memoran Co Ltd v The Incorporated Owners of Mei Hing Mansion [2022] HKCFI 50 at [44] ‑ [47], per DHCJ Tsui.

50.  For all of the above reasons, we allow the appeal in this respect and set aside the Declarations.

E4.  Ground 3

51.  Under this ground, Mr Wong argued that the Recorder had erred in deciding the O14/O14A Summons in a directions hearing fixed for 15 minutes and failed to grant the directions sought by the defendant to file an affirmation to support the factual disputes and amend its Defence.

52.  Given our analysis in Grounds 1 and 2 and our conclusion that the Recorder should not have granted the Declarations, this ground falls away insofar as it relates to the challenge against the Declarations.

53.  Insofar as the conclusion that the Structural Concrete Slab is a common part is concerned, as we mentioned above, Mr Wong for the defendant has not advanced any contentions in the Notice of Appeal, in his first written skeleton submission and at the hearing as to why the Recorder erred in his reasons in arriving at that conclusion.  It is also pertinent to note that, in its Defence, the defendant had only made a bare denial without any particulars that the Structural Concrete Slab was not a common part of the Building.^[9]

54.  It is only in his supplemental skeleton submissions lodged after the hearing that Mr Wong has sought to contend that it is at least arguable that the Structural Concrete Slab is not a common part of the Building.  Counsel’s contentions run as follows:

(1)  It is clear or there is evidence to show that the plaintiff has exclusive use of the surface of the ceiling of the 3^rd floor (ie, the underside of the Structural Concrete Slab), while the owners of Flats A ‑ F of the 4^th floor have exclusive use of the floor surface of those flats (which constituted a large part of the upper surface of the Structural Concrete Slab).

(2)  The authority of Westland Garden at [49] ‑ [50] supports the contention that in such circumstances, the entire Structural Concrete Slab is not a common part.

55.  In light of the matters set out at [53] above, we are not convinced that it is open to the defendant in this appeal to advance these submissions to challenge the Recorder’s conclusion that the Structural Concrete Slab is a common part of the Building as they are not in any of its grounds of appeal.  But in any event, we do not think there is merit in Mr Wong’s contentions.

56.  As accepted by Mr Wong and held in Westlands Garden at [28] and Tam Sze Man at [23] ‑ [24], whether a structure is a common part is a question of construction of the relevant instruments, including the DMC.  In this respect, the Recorder had correctly considered sections 2 and 18 and Schedule 1 of the BMO as well as paragraph 3(u) of the DMC[10], before coming to the conclusion that the Structural Concrete Slab in question fell within the definition of a common part in part as a “structural support” and in part as a “roof” under the BMO.

57.  Further, as confirmed by Mr Man at the hearing, the plaintiff’s case is that it is only the structural concrete part of the Structural Concrete Slab between its under and upper surfaces which is a common part of the Building.  It is not the plaintiff’s position that those two surfaces also constitute common parts of the Building[11].  This is consistent with the observation made by Tang ACJHC (as he then was) in Westlands Garden at [50] (referring to Nation Group Development v New Pacific Properties Ltd (2000) 3 HKCFAR 427 at 436D-F) that as a matter of construction, an owner usually acquired no right to use the structural part of the slab:

“Nation Group Development Ltd v New Pacific Properties Ltd was not concerned with the ownership of a partition wall. It drew an analogy with a floor slab. It was sufficient for the purpose of Nation Group Development Ltd v New Pacific Properties Ltd, for illustrative purpose, to refer to the surface of the floor slab without going on to consider the ownership of the floor slab. Indeed, it is clear from passages quoted above that Ribeiro PJ’s emphasis was that an assignment of a flat on the 7th floor:

… do not, as a matter of construction, encompass the underside of the 7th floor slab …”

58.  In the premises, insofar as Mr Wong seeks to say that the plaintiff and the owners of the 4^th floor’s flats also have been given exclusive possession to the whole of the Structural Concrete Slab, including the inner structural part between its upper and lower surfaces, this is not supported by Westlands Gardens as submitted by him.

59.  The defendant therefore has failed to show that the Recorder erred in his construction exercise in concluding that the Structural Concrete Slab (meaning the inner structural part between the surfaces) is a common part of the Building.

60.  For all these reasons, Ground 3 also fails.

E5.  Ground 4

61.  In the Costs Order, the Recorder awarded to the plaintiff:

(1)  Costs of and occasioned by the application (ie, the O14/O14A Summons); and

(2)  Costs of the action.

62.  Under this ground, Mr Wong argued that the Recorder had erred in also granting the costs of the action to the plaintiff.  Mr Man did not argue otherwise, but instead only stated that the same issue had been argued and rejected by DHCJ Tsui at [26] of the Injunction Decision in observing that this was a slip by the Recorder.  He therefore submitted that it was an abuse by the defendant to now seek to try the argument again when it was already rejected by a court of a competent jurisdiction[12].

63.  In relation to the Costs Order, it is significant to note the following matters:

(1)  At the end of the hearing, the Recorder indeed granted the Costs Order in accordance with paragraph 4 of the O14/O14A Summons[13], which asked for the costs also of the action.

(2)  On the other hand, the Recorder has also said at [27] of the Reasons that “The costs of the summons are to be to the plaintiff.” He did not refer to any costs of the action.

(3)  The Order containing the Costs Order was sealed on 26 January 2021, a day after the Reasons.

(4)  Viewed as such, there is force in DHCJ Tsui’s observation at [26] of the Injunction Decision:

“26.  I should add that I am also of the view that para 4 of the sealed copy of the previous order contains a manifest error in that it should not cover the costs of the action. This must also be a logical conclusion flowing from Mr Wong’s concession that the action has not been wholly disposed of by the order.”

64.  On the other hand, it must be noted that DHCJ Tsui’s observation was made in the context of rejecting the defendant’s then opposition to the making of the interim injunction as sought by the plaintiff against the defendant on the basis that the action had already been wholly disposed of.  She was not considering any application by the defendant to clarify the Costs Order.  As such, in our view, there is no abuse by the defendant to proceed with the appeal against the Costs Order simply because another judge has made an observation that that part of the Costs Order was a manifest error.

65.  At the same time, given [26] of the Reasons and DHCJ Tsui’s above observation, the more obvious and perhaps proper course for the defendant to take was first to seek clarification from the Recorder, if necessary under the slip rule, as to whether he indeed intended to order the defendant to bear the costs of the action.

66.  Be that as it may, given that we have already heard the appeal, it would be more costs effective and time saving for us to dispose of this issue now.

67.  In our view, it is plainly wrong for the Recorder, if he was so intended, to grant costs of the action to the plaintiff, when it was clear that he regarded there were outstanding issues in the action that needed to be tried.  We will therefore allow Ground 4 in any event and set aside this part of the Costs Order.

F.  DISPOSITION

68.  For the above reasons, we allow the appeal and set aside paragraphs 3 and 4 of the Order.

69.  As to costs of this appeal, the parties have agreed that costs should follow the event.  As the defendant has substantially succeeded in the present appeal, we order that costs of the appeal be to the defendant, to be taxed if not agreed.

70.  As to the costs of the O14/O14A Summons, given that we have upheld the Recorder’s order in concluding that the Structural Concrete Slab is a common part but set aside the Declarations, we find it just and fair in all the circumstances to make no order as to costs.