MAIN CHOICE DEVELOPMENT LTD. v. CONVEY ADVERTISING CO. LTD.

HCA 2429/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2429 OF 2001

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J U D G M E N T

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1. The Plaintiff commenced this action alleging that the Defendant had wrongfully erected a signboard on the external wall of a building located at Nathan Road, Kowloon. The Deed of Mutual Covenant of the building indicates that it was divided into 20 equal undivided parts or shares held by the co-owners of the respective units of the building on the ground floor and cockloft and the first to fifth floors. The photographs exhibited to the affirmations used in these proceedings also show that the building consists of about 5 storeys. The title documents exhibited to the affirmation show that, as is typical of the assignment of units in multi-storey buildings in Hong Kong, each of the co-owners of the building in question were assigned part of the equal undivided shares of the land together with the right to the exclusive use, occupation and enjoyment of the respective units in the building.

2. Further to commencing this action, the Plaintiff took out a summons on 25 February 2002 asking:-

(1) for summary judgment to be entered pursuant to RHC O. 14 r. 1;

(2) alternatively, for the Defence filed on 16 January 2002 to be struck out pursuant to O. 18 r. 19.

3. At the end of the hearing on 30 May 2002, I made an order in terms of paragraphs 1(a) to (d) of the summons (as amended in the manner indicated at the hearing). Summary judgment was entered in effect ordering the Defendant to remove the signboard (together with the supporting structure) and to reinstate the external wall of the building with damages to be assessed.

4. There is no dispute that the Defendant has erected the signboard on the external wall of the building. Two lines of defence were put forward by the Defendant to resist the Plaintiff's application. First, the Plaintiff does not have the locus standi to sue. Secondly, the Defendant was entitled to erect the signboard.

5. In relation to the "locus" defence, the Defendant argued that the Plaintiff has not fulfilled a condition precedent before commencing this action. Specifically, the Defendant contended that under clause 16 of the Deed of Mutual Covenant, the Plaintiff had to be authroized to commence this action at a meeting convened to discuss and decide matters concerning the building before the Plaintiff could commence this action. Clause 16 of the Deed of Mutual Covenant reads:

"From time to time there shall be meetings of the co-owner of the said building to discuss and decide matters concerning the said building......[the remaining part deals with the procedures to be followed at the meetings]."

All that clause 16 provides is that there shall be co-owners' meetings from time to time to discuss and decide matters concerning the building. There is nothing in that clause to limit or prohibit any of the co-owners from taking steps to assert or protect their rights as co-owners. No Incorporated Owners or management committee of owners has been formed, nor was any manager appointed, to manage the building. The argument that there is a condition precedent is unfounded.

6. The Defendant also argued that the external wall of each level of the building belongs to the respective co-owner(s) of the unit(s) of that level. For example, the external wall of the first floor belongs to the co-owner(s) of the unit(s) of the first floor and so on. I reject this argument as well. First, it is the common conveyancing practice in Hong Kong (and the title documents show that this applied to the building in question) that co-owners of multi-storey buildings co-own the land (together with the building). Their inter-relationship (for example, their rights to use certain parts of the building and obligations arising therefrom and the like) are governed by deeds of mutual covenant and/or the provisions of the Building Management Ordinance, Cap. 344. The fact remains, however, that they are all co-owners of the whole property. This explains why conveyancing documents usually use phrases such as "equal undivided parts or shares of and in [a piece of land] together with the sole and exclusive right and privilege to hold, use, occupy and enjoy [unit(s) on that piece of land]". Secondly, clause 12 of the Deed of Mutual Covenant shows that co-ownership of the external wall of the building in question was intended. This clause provides:

"The owners for the time being of the ground floor and cockloft shall have the right to affix , paint and erect sign boards and decorations to the facade of the said building up to the level of the cockloft......and the owners for the time being of the 1st Floor of the said building shall have the right to affix, paint and erect sign boards and decorations to the facade of the said building above the level of the cockloft ...... and below the level of the 2nd Floor ...... Provided that no sign board shall be hung in the space at the entrance to the staircase landing on the ground floor of the said building and the names of Tenants and sign boards of the upper floors shall be displayed only in the space inside the ground floor staircase landing designated by the First Owner for this purpose."

7. Hence, clause 12 permits the respective co-owners of the ground floor and cockloft and first floor to "affix, paint and erect signboards and decorations" to prescribed parts of the building and in the prescribed manner. Without clause 12, they will not be able to do so lawfully. This is because once it is established that the external wall of the building is co-owned and not exclusively owned by individual co-owners, the erection of any structure to the external wall by individual co-owners (other than as permitted by clause 12 of the Deed of Mutual Covenant) would be an act of ouster of other co-owners: Clerk and Lindsell on Torts (2000) 8th Ed., paras. 18-25. The Defendant's second line of defence relies on an alleged permission by other co-owners for it to erect the signboard at the external wall. Since these co-owners themselves are unable to do such acts, a fortiori, the Defendant cannot pray in aid of their permission as a defence to this action.

8. The Plaintiff also claimed that the erection of the signboard caused nuisance, annoyance and/or hazard. This has not been refuted by evidence adduced by the Defendant. Such nuisance, annoyance and hazard would contravene clause 10 of the Deed of Mutual Covenant and/or s. 34I of Cap. 344.

9. The Defendant originally also relied on the defence of acquiescence but this was (correctly) not pursued by counsel at the hearing.

10. For the above reasons, I concluded that there is no triable defence to the Plaintiff's claim, nor was there other valid reason why this action ought to be tried.

11. Since summary judgment should be (and was) entered pursuant to O. 14 r. 3, there was no need to consider the application made under O. 18 r. 19.