HANG YUAN MANAGEMENT LTD v. KISHINCHAND CHELLARAM (HONG KONG) LTD

IN THE COURT OF APPEAL

1986, No. 141
(Civil)

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JUDGMENT

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Sir Alan Huggins, V.P.:

1. This is an appeal against an order of Sears, J. giving leave to enter judgment under O.14. The action is brought upon covenants in a Deed of Mutual Covenant. The Defendant is the owner of a flat. It has erected outside the windows of the flat five split type air-conditioners in which the condenser unit is installed outside and connected through the wall to an inside unit.

2. The terms of the relevant covenants are as follows:

“All the owners covenant not to erect or permit or suffer to be erected any structure on the roofs which in the opinion of the Management Committee is in any way unsightly or out of keeping with the building and not to do or permit or suffer to be done anything which would in any way alter the facade or exterior appearance of the buildings.”

Secondly we have one of the House Rules made under the Deed of Mutual Covenant

“No air-conditioning or other unit shall be installed through any external wall except in the aperture provided.”

The condensers which have been erected are too large to go into the apertures provided, and t hey have been installed elsewhere.

3. Before the Summons was taken out a Defence was filed. The Defendant admits installing the machines. It does not admit any breach of covenant but the main contentions for our purposes

(1) that there had been actual consent to the installation of the condensers where they are; and

(2) that in all the circumstances it would be inequitable to enforce the covenants because the Plaintiff had permitted many previous arid similar breaches.

4. The Defendant's flat is situated in an estate consisting of three buildings, each of which is nominally divided into two blocks. There are seventy flats in the estate. Of those seventy flats the owners of no less than fifty-four of their have committed breaches of these covenant: only sixteen owners have not committed breaches.

5. The judge took the view that neither of the defences was arguable. As tot he consent he said

“This caretaker gave no consent and the Defendants well knew what the situation was with regard to the installation and the obtaining of consent thereto. This matter is unarguable.”

With respect it was not appropriate to make a finding of fact such as appears in the first sentence, but I think the judge probably meant only that in his view there was no evidence upon which it could reasonably be found that consent had been given. I find it unnecessary to decide this point, because I think the case can be decided on the second point.

6. As to the other defence the judge said

“What ever the breaches which had occurred the Defendants must show so complete a change in the character of the property as to render the covenants valueless - see Chatsworth Estates v Fewell 1933 1 Ch. 224.”

That was a case where the defendants relied on two equitable defences the first was that there had been a change in the character of the neighbourhood, so that the covenant as to user had ceased to be of any value, and the second was that the plaintiffs had brought about the change in the character of the neighbourhood by their own acts and omissions. This present case is not one where there can be any question of a change of the character of the neighbourhood. We are concerned only with the argument that it would be inequitable to allow the Plaintiff to enforce the covenant against one of the owners in respect of this present breach when it has not enforced the covenant against such a large number of other owners. The defence, as it seems to me, involves a consideration of the nature of all the previous breaches and a comparison with what the Defendant has done: Cheung Yuet v 1ncorporated Owners of Oriental Gardens: 1979 H.K.L.R. 536.

7. The judge had before him three photographs. By consent we have been asked to look at a large number of other photographs, but in my judgment this type of case could pot be satisfactorily decided without a view of the site, and certainly it could not have been decided on the three photographs which were before the judge. The court would have to assess the relative seriousness of all the breaches which have taken place. A breach by erecting a condenser on the facade of the building may be more serious than the erection of a similar apparatus on the side or the back of the building. The size of each of the articles has to be considered. These are not the only condensers of this type which have been erected on the Facade itself in all there seem to be eighteen such condensers, including some on Block E which are considerably larger than the present ones. I take the view that this is not a proper case for summary judgment. I think that there will have to be a trial and the judge will have to have the opportunity to consider all the aspects of the matter before deciding whether in the exercise of his judicial discretion he will allow the enforcement of these covenants.

8. For these reasons I would allow the appeal and give leave to defend.

Fuad, J.A

9. I agree and have nothing to add.