THE INCORPORATED OWNERS OF TUNG LO COURT v. LEUNG MAY CHUN ALISON ALIANCE

DCMP 1381/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1381 OF 2011

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D E C I S I O N

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Introduction

1.  Before me are two applications for leave to appeal.  One from the Incorporated Owners of Tung Lo Court (“the “IO”) and the other from Madam Leung May Chun Alison Aliance (“Madam Leung”).

2.  The IO is the plaintiff in this action and Madam Leung is the defendant who had counterclaimed against the IO.

3.  The claim of the IO was settled just before the trial.  The trial took place before me from 18 to 21 February 2013 only concerned Madam Leung’s counterclaim.

4.  Madam Leung counterclaimed against the IO for loss caused to her by the IO’s various acts in depriving her of access from 15 November 2010 onwards to her six car parking spaces at Tung Lo Court (the “Building”) namely parking lot nos 7, 15, 24, 25, 32 and 40 (the “Car Parks”) at the basement (the “Basement”) of the Building.

5.  The acts of the IO, subject of Madam Leung’s complaint, were:-

(1) Closing the Basement from the evening of 14 November 2010 to 14 March 2011 for repairs and renovation;

(2) Installing electric bars and electric rolling shutters at the two openings of the Basement at Tai Po Road and Shek Kip Mei Street.  The electric bars could be lifted by using smart cards issued by the management office of the Building (the “Management Office”) and the electric rolling shutters were operated by staff from the Management Office upon request by phone each time (the “Security System”);

(3) Introducing a registration system requiring all users of the car parking lots in the Basement to produce copies of the driver’s driving licence, the car’s registration document and motor insurance policy to register with the Management Office (the “Registration System”);

(4) Refusing to issue the smart cards for the Car Parks to Madam Leung before she settled the IO’s claims for management fees and repair contributions; and

(5) Refusing to give the smart cards for the Car Parks to Madam Leung when she refused to sign undertaking to consent to abide by the Registration System.

6.  I handed down my judgment in respect of Madam Leung’s counterclaim on 29 May 2013 (the “Judgment”).

7.  I divided Madam Leung’s counterclaim into three periods of time.  The first period was from the evening of 14 November 2010 to 14 March 2011 (the “1^st Period”) when the Basement was closed for repairs and renovation.  The second period was from 15 March 2011 to 22 January 2013 (the “2^nd Period”) when the Basement was reopened but the IO had refused to issue smart cards for the Car Parks to Madam Leung before she settled the outstanding management fees and repair contributions.  The third period was from 23 January 2013 onwards (the “3^rd Period”) when the IO did not give the smart cards for the Car Parks to Madam Leung because she refused to sign receipt containing an undertaking to consent to abide by the Registration System.

8.  I found that the IO was liable to Madam Leung’s claim for breach of the deed of mutual covenant (the “DMC”) of the Building and for private nuisance for the 1^st Period (the “Judgment for the 1^st Period”). However, I found that Madam Leung had failed to prove the quantum of loss suffered by her whether under contract or in tort for the 1^st Period.  I, therefore, awarded nominal damages of $10 as her loss for the 1^st Period.

9.  I also found that the IO was liable to Madam Leung’s claim for breach of the DMC and under private nuisance for the 2^nd Period (the “Judgment for the 2^nd Period”).  I again found that Madam Leung had failed to prove the quantum of loss suffered by her under contract or in tort for the 2^nd Period.  I therefore also awarded nominal damages of $10 as her loss for the 2^nd Period.

10.  I found that the IO was not liable to Madam Leung’s claim for the 3^rd Period (the “Judgment for the 3^rd Period”).

11.  Both parties seek leave to appeal against my different rulings in the Judgment pursuant to section 63A of the District Court Ordinance (Cap 336). Section 63A(2) provides that:

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that ─

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.” 

12.  The threshold for granting leave to appeal is the “reasonable prospect of success” test or the “interests of justice” test.  This is not disputed by the parties.  In SMSE v KL [2009] 4 HKLRD 125 at 129 Le Pichon JA stated that:-

“Reasonable prospects of success involves the notion that the prospects of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”.”

13.  Chu J (as she then was) stated in Wynn Resorts (Macau) SA v Mong Henry (unrep, HCA 192/2009, 10 August 2009) that:-

“19. To meet the “reasonable prospect of success” test, an applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrated that the appeal will probably succeed.”

The IO’s application

14.  On 26 June 2013, the IO applied by summons for leave to appeal.  The IO’s grounds of appeal as set out in the draft ground of appeal annexed to the IO’s summons are as follows:-

(1) Whether the IO in the discharge of its duty and exercise of the vested power to execute necessary construction works under the DMC is entitled to seal off the car park to the exclusion of the owners for a specified period in order to enable the related construction works to be carried out. (“Ground 1”)

(2) Whether in the discharge of its occupiers’ common duty of care in those circumstances the IO is entitled to exclude the owners and other visitors for a specified period whilst the construction works were being carried out. (“Ground 2”)

(3) Whether the IO would satisfy the terms of the insurance policy if the car park was not to be sealed off from the owners and any visitors during the period of the said construction works. (“Ground 3”)

(4) The learned Judge erred in finding that the IO had wrongfully deprived Madam Leung’s right to access to and use of the car park spaces. The learned Judge should have found, on evidence, that Madam Leung was in fact allowed to enter the car park after completion of the repair construction works, and that Madam Leung like every other car park owners was not allowed to cause her vehicle(s) to enter the car park without registration. (“Ground 4”)

(5) Whether the IO was entitled not to issue smart card to Madam Leung (and also every other car park owners as the case may be) who has continued to refuse to pay the management fees and repair contribution. (“Ground 5”)

15.  Mr Cheung, representing the IO, submitted that the IO sought leave to appeal to the Court of Appeal for determination of the five issues of mixed law and facts as set out above.

16.  Miss Tsang, representing Madam Leung, took issue on non-compliance with procedure.  She submitted that the IO’s application failed to comply with the requirements of Order 59, rule 1(2) and rule 2A(1) of the Rules of the High Court (the “RHC”).  She further submitted that the IO’s application also failed to comply with para 17 of Practice Direction 4.1 (“PD 4.1”).  She contended that the IO’s application ought to be dismissed on the aforesaid procedural non-compliance.

17.  Order 59 of the RHC set out rules governing appeal proceedings in the Court of Appeal.  Order 59, rule 2A(1) set out provisions for application made to the Court of Appeal for leave to appeal.  This is not an application made to the Court of Appeal.  This is an application made to the District Court.  Order 59, rule 2A(1) does not apply.

18.  Para 1 of PD 4.1 provides that:-

“1. This Practice Direction is intended to provide comprehensive directions for the conduct of the civil business of the Court of Appeal.”

19.  PD 4.1 does not apply to proceedings in the District Court.  Para 7 of PD 4.1 set out practice on application for leave to appeal made to the Court of Appeal.  It does not apply to application for leave made to the District Court.

20.  The objections raised by Miss Tsang on procedural non-compliance are misconceived.

21.  Miss Tsang further submitted that other than Ground 4, all the IO’s grounds were framed as questions.  The IO was inviting the Court of Appeal to re-try those issues which had already been determined at the trial and the IO did not give any reasons why and how the Judgment was wrong in making such findings of facts.  She submitted that there was no substance in the IO’s grounds and no reasonable prospect of success.  I shall deal with this objection of Miss Tsang when I deal with the IO’s individual ground of appeal below.

Ground 1

22.  Mr Cheung said that at the material times the IO was under a statutory order to repair and renovate the Basement.  The repair works were compulsory. All the owners of car park lots (the “Owners”) of the Building had no discretion whether to consent to the repair work.

23.  He submitted that the IO was acting on behalf of the Owners to carry out the repair works.  The Owners, including Madam Leung, were the principals of the IO.  The repair works were carrying out by the Owners, through the agency of the IO and the Owners had to have an implied understanding that the ordinary use of the car park lots as a result of the repair works would be affected and/or suspended temporarily until completion.  In the event that the circumstances were such that the repair works in question could not in any practical terms be performed unless the Owners and the visitors vacated themselves from the premises, then the Owners had to be taken as giving their implied consent and undertaking to temporarily suspend their use of their car park lots.  The Owners, as principals, could not accuse the agent (ie the IO) of depriving them of their right to use their premises during the course of the repair works.  He said that the evidence in this case including some photographs showed that the interior of the Basement was no different from a construction site with extensive construction works being performed and during the course of the works, the Basement could not in any practical terms be regarded as a usable car park.

24.  Alternatively, he submitted that Madam Leung was unable to use the Car Parks during the period of repair was not due to the closure of the Basement but because of the extraordinarily chaotic condition during the construction works.  It was Madam Leung who, through her agent, was carrying out the compulsory repair order in the Basement.  Madam Leung could not act to undermine the works of her agent who was doing the job for her.

25.  Mr Cheung submitted that in a scenario of multiple-principal, once a decision was made by the IO who was the agent for the Owners, unless there was any special reason suggesting otherwise, a dissenting member could not expect different treatment.

26.  Mr Cheung submitted that the Judgment had not given consideration to this principal/agent principle, hence the Judgment for the 1^st Period was misconceived.

27.  Miss Tsang submitted that Ground 1 was a question and not a reason to show that certain parts of the Judgment ought to be reversed, varied or interfered by the Court of Appeal.  The Judgment found that the IO was not entitled to seal off the Basement to the exclusion of the Owners in the name of carrying out construction work.  No reason was submitted by the IO to challenge this point.  Furthermore, the IO did not suggest that there was any misinterpretation of the evidence.  Leave should not be granted.

28.  I agree with Miss Tsang that Ground 1 only framed an issue.  It is not a ground of appeal.  Miss Tsang rightly pointed out that the issue framed in Ground 1 had already been dealt with in paras 111 to 117, 120 to 126 and 128 to 132 of the Judgment.

29.  Paras 68 to 70 of the Judgment dealt with the IO’s evidence on the Building Order dated 2 November 2007 (the “Building Order”) and the scope of the repair and renovation works undertaken (the “Works”).  The witness of the IO, Mr Lam, agreed that the scope of the Works went beyond the requirements of the Building Order (para 70 of the Judgment).

30.  I found that the resolution resolved on 30 May 2010 to carry out the Works was reasonable and within the authority of the owners’ general meeting (para 120 of the Judgment).  However, I found that no evidence had been adduced to show that the repairs required under the Building Order (ie the compulsory work) could not be carried out without closing the Basement (para 121 of the Judgment).  Mr Cheung did not seek to show that my above findings were wrong.

31.  In paras 122 to 126 of the Judgment, evidence adduced by the IO to support the closure of the Basement for carrying out the Works was considered. I concluded that there was insufficient evidence to support the contention that the Works could not be carried out without closure of the Basement.  The photographs referred to by Mr Cheung only showed that construction works were being carried out in the Basement.  They were of little assistance to the court in determining whether the Works could not be carried out without closure of the Basement.

32.  Although the principal/agent relation between the Owners and the IO had not been expressly raised at the trial, the implied authority of the IO as the manager of the Building had been considered in paras 112 to 116 of the Judgment.  It is noted that the Court of Appeal has discretion to allow a point not being raised in the trial to be raised in the appeal (see Pittalis v Grant [1989] 3 WLR 139).  As the above findings in the Judgment are not shown to be wrong, I do not see how further deliberation in the Court of Appeal on the principal/agent relation for carrying out repair works required by the Building Order will affect the Judgment for the 1^st Period.

33.  An appeal relying on Ground 1 does not have a reasonable prospect of success and I do not see that the interests of justice require the issue framed in Ground 1 to be put before the Court of Appeal for determination.  I refuse to grant leave to appeal on Ground 1.

Ground 2

34.  Ground 2 is also a ground to appeal against the Judgment for the 1^st Period.

35.  Mr Cheung submitted that the contractors responsible for the Works took the view that a complete closure of the Basement was called for and there was no evidence that the contractors’ decision was unjustified.  He submitted that some of the photographs showed that the construction site was in a hazardous condition.

36.  Miss Tsang submitted that Ground 2 again contained a question, not reason for leave to appeal.  I agree.

37.  Miss Tsang further submitted that the IO did not have any legal ownership of any part of the Basement or any occupiers’ common duty of care for it to discharge with.  This I disagree.

38.  An owner-occupier is obviously an occupier.  No evidence had been adduced at the trial to show whether the IO was the owner of the common area in the Basement at the material times.  The IO might or might not be the owner of the common area in the Basement.  However, an occupier does not need to be the owner of the premises concerned.  “Apart from owners and lessees, a person is likely to be regarded as an “occupier” if he has a sufficient degree of control over premises to be able to ensure their safety, and to appreciate that a failure on his part to use care may result in injury to a person coming on to them.  The control need be neither entire nor exclusive” (See para 12-10 of Clerk & Lindsell on Torts 20^th ed 2010 at p 804).

39.  As set out in para 19(3) of the Judgment, section 18(1) of the Building Management Ordinance (Cap 344) (the “BMO”) imposed the following duties on the IO:-

“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.”

40.  Miss Tsang in her opening submissions at the trial stated that:-

“7. The following factual issues should not be in dispute:-

(1) The IO was set up and derives its powers as a manager under the Deed of Mutual Covenant (“DMC”) and Building Management Ordinance Cap 344 (“BMO”) in order to manage the common facilities and common areas of Tung Lo Building (“the Building”), including that inside the Carpark on the basement (“Carpark”). …

(3) Daily management of common facilities and common areas were and are performed by the Management Office of the IO. …”

41.  I have difficulties to reconcile the submissions made by Miss Tsang at the trial and at the leave to appeal hearing on this issue.

42.  Although the issue of occupiers’ liability had not been directly raised at the trial, it had been indirectly raised in the insurance issue referred to in Ground 3.  As mentioned above, I had found that there was insufficient evidence to support the contention that the Works could not be carried out without closure of the Basement and my said finding is not shown to be wrong. It will also be seen from the discussion on Ground 3 below that there was also insufficient evidence at the trial to show that the Works could not be carried out safely without closing the Basement.

43.  I also do not see that there is a reasonable prospect of success for an appeal relying on Ground 2 or that it is in the interests of justice to put the issue framed in Ground 2 before the Court of Appeal for determination.  I refuse to grant leave to appeal on Ground 2.

Ground 3

44.  Mr Cheung agreed that there was no evidence on whether the insurers might decline insurance if the Basement was not sealed off.  He also agreed that there was no evidence on how much would cost to the insured if the Basement was not closed to other visitors.  He submitted that in taking out a public liability insurance policy, any reasonable parties would look to achieve highest level of safety and minimal risk of loss and injuries with the lowest premium.  No reasonable parties would compromise the safety standard and sacrifice money in contemplation of casual presence of a visitor (owner or otherwise) especially someone who had not had a known record of parking a car there.  He further submitted that it would have been unreasonable for the IO to take out a policy permitting free presence of the owners or visitors when the risk of harm was imminent.

45.  Miss Tsang submitted that Ground 3 was not an issue of law but an invitation to re-consider a fact which had already been determined in the Judgment.  I agree.

46.  As pointed out in para 127 of the Judgment, the public liability insurance policy for the period of the Works had not been produced to the court at the trial.  I dealt with the insurance issue at the trial on the assumption that the terms of the relevant insurance policy were as claimed by the IO.  My finding was that no evidence had been adduced to show that the coverage of the IO’s public liability insurance could not be extended to cover the contemplated risks at added premium.  Mr Cheung did not seek to challenge my above finding. In such case, the issue framed in Ground 3 simply has no bearing on the Judgment for the 1^st Period.

47.  Mr Cheung’s submission that “the risk of harm was imminent” was without factual basis.  No evidence was adduced at the trial to show that there was imminent risk of harm and no evidence was adduced to show that the safety standard would be compromised if the Basement was not closed during the Works. Further safety measures could be introduced to enhance safety during the Works if the Basement was not closed.  No evidence had been adduced to show that this could not be achieved.  I had in para 132 of the Judgment rejected Mr Cheung’s argument on reasonableness and Mr Cheung had produced nothing at the hearing for leave to appeal to show that I was wrong.  The fact that Madam Leung had not parked any car at the Car Parks for some times is irrelevant.

48.  On the evidence adduced at the trial, there is no merit in Ground 3 to show a reasonable prospect of success in an appeal and I do not see that it is in the interests of justice to put the issue framed in Ground 3 before the Court of Appeal for determination.  I also refuse to grant leave to appeal on Ground 3.

Ground 4

49.  Ground 4 is to support an appeal against the Judgment for the 2^nd Period.

50.  Mr Cheung said that the admitted evidence was that after completion of the Works, Madam Leung had on at least one occasion asked and gained entry on foot into the Basement.  He submitted that the evidence was that even owners without a smart card could still enter the Basement as long as he/she sought help from the watchman.  He further submitted that Madam Leung retained absolute and unrestricted liberty to enter the Basement.

51.  Mr Cheung said that the evidence was that Madam Leung had not driven for many years.  He said that there was no evidence that Madam Leung could not drive into the Basement nor her agents or tenants (there had been none) had encountered difficulty driving into it.  He submitted that there was no evidence of actual undue interference as opposed to notional undue interference.  He submitted that there was no factual basis for the ruling that Madam Leung had suffered any undue interference with her use of the Car Parks after mid March 2011 (para 183 of the Judgment).

52.  Evidence on Madam Leung having access to the Car Parks after 15 March 2011 had been noted in paras 30 and 49 of the Judgment.  I had not made any finding that Madam Leung was not allowed to enter the Basement after completion of the Works.  My finding was that the IO had deprived Madam Leung of her rights under clause 2 of the DMC by refusing to issue smart cards for the Car Parks to her on the ground that she still owed management fees and/or repair contributions to the IO (see para 159 of the Judgment).

53.  When access was referred to in paras 159, 160 and 183 of the Judgment, it was clearly referred to access as provided in clause 2 of the DMC which was access to the common passages of and in the Basement for all purposes connected with the proper use and enjoyment of the Car Parks of which Madam Leung was entitled to the exclusive use occupation and enjoyment and for the purpose of ingress to and egress from the Car Parks.  The proper use of the Car Parks is for parking cars.  With the Security System in place, I do not see how Mr Cheung could seriously suggest that without the smart cards, Madam Leung could use the Car Parks for the proper propose of parking cars.

54.  Undue interference is undue interference.  It matter not that Madam Leung did not drive for many years.  This is only relevant to the issue of quantum.  Mr Cheung submitted no authority to support his contention on his suggested distinction between “actual undue interference” and “notional undue interference”.  I see no merits for such contention in this case.

55.  I do not see that there is a reasonable prospect of success for an appeal relying on Ground 4 or that it is in the interests of justice to have a hearing on appeal on Ground 4.  I therefore also refuse to grant leave to appeal on Ground 4.

Ground 5

56.  Ground 5 is also in support of an appeal against the Judgment for the 2^nd Period.

57.  Mr Cheung submitted that it was a mixed law and fact whether the IO was entitled to withhold issuing smart card to an owner with outstanding management fees and repair contribution.  He said that lack of a smart card had not deprived Madam Leung of the actual use of the Car Parks.  He submitted that there was no legal or factual basis to find that Madam Leung had suffered either undue interference or private nuisance to her rights for the 2^nd Period.

58.  Miss Tsang submitted that the issue raised in Ground 5 had been disposed of in the Judgment and no grounds were advanced by the IO to challenge the construction of the DMC as set out in the Judgment.

59.  Paras 159 and 183 of the Judgment dealt with the issues raised in Ground 5.  It is against commonsense to say that there was no factual basis to find that lack of smart cards had deprived Madam Leung of the actual use of the Car Parks. Mr Cheung has not showed that my construction of the DMC was wrong.  I see no reasonable prospect of success on an appeal relying on Ground 5.  I do not see that the interests of justice will require Ground 5 to be put to the Court of Appeal.  I refuse to grant leave to appeal on Ground 5.

Conclusion to the IO’s application

60.  As all proposed grounds of appeal of the IO do not have reasonable prospect of success and the interests of justice do not require them to be put before the Court of Appeal, I dismiss the IO’s application for leave to appeal.

Madam Leung’s application

61.  On 25 June 2013, Madam Leung applied for leave to appeal on both liability and quantum. 

62.  Madam Leung seeks leave to appeal against the Judgment for the 3^rd Period.  In the draft defendant’s grounds of appeal (“D’s Grounds”), Miss Tsang set out Madam Leung’s grounds of appeal on the liability issue as follows:-

(1) misconstruction of the terms of the DMC (para 1 of D’s Grounds);

(2) misconstruction of the BMO (para 2 of D’s Grounds);

(3) misinterpretation of facts (paras 3 to 7 of D’s Grounds);

(4) overlooking evidence (paras 8 to 12 of D’s Grounds); and

(5) double standard (paras 13 to 21 of D’s Grounds).

63.  Madam Leung’s grounds of appeal on the quantum issue were set out in para 22 of D’s Ground.

Misconstruction of the terms of the DMC and the BMO

64.  The main contention of Madam Leung in her appeal on liability is that the Security System and the Registration System introduced by the IO were in breach of the DMC.  Miss Tsang submitted that the Judgment had misconstrued clauses 7 and 21 of the DMC and section 16 of the BMO.

65.  Paras 143 and 152 of the Judgment stated as follows:-

“143. Furthermore, clauses 7 and 21 of the DMC reading together with section 16 of the BMO empowered the IO to make House Rules in relation to the common parts of the Basement. The Security System being rules introduced by the Management Committee to control and manage the common passage in the Basement was also authorized by these clauses of the DMC. Madam Leung’s claim for breach of the DMC in this respect fails.”

“152. As in the case of the Security System, the Registration System is about control and management of the common parts in the Basement and to ensure that the car parking spaces are used properly for car parking purpose. The IO is empowered by the DMC and the BMO to introduce and implement the Registration System and the IO was not in breach of the DMC in so doing. The claim of Madam Leung against the IO for breach of DMC in this respect also fails.”

66.  Miss Tsang contended that clauses 7 and 21of the DMC did not expressly or implicitly confer any authority or impose any duty on the IO to make any house rules in relation to the use of the common parts of the Basement or common passages in the Building, in particular the Security System and the Registration System contrary to the interpretation in para 143 of the Judgment.

67.  Miss Tsang further contended that section 16 of the BMO was irrelevant to the proper construction of the DMC contrary to the interpretation in para 143 of the Judgment and that clauses 7 and 21 of the DMC reading together with section 16 of the BMO did not empower the IO to make any house rules in relation to the common parts of the Basement or common passages in the Building which might be contrary to or in conflict with the provisions in the DMC, in particular clauses 2, 13 and 14.

68.  For easy reference, I set out below the relevant clauses of the DMC and section 16 of the BMO in full.  Most of these provisions had been set out in paras 18 and 19 of the Judgment.

69.  The following are provisions of the DMC referred to in D’s Grounds:-

(1)   “Each of the parties hereto and his tenants and licensees shall in common with his co-owners of the whole of the said premises and their tenants and licensees have access to and be entitled to use the lifts the entrance-hall staircases landings and the common passages of and in the said Building for all purposes connected with the proper use and enjoyment of the block or shop or car park space or roof on any part of the said Building of which he is entitled to the exclusive use occupation and enjoyment and for the purpose of ingress to and egress from such block or shop or car park space or roof on any part of the said Building.” (Clause 2)

(2)   “The costs of all shop signboards to be used in the said Building shall be borne by the Owner of such portion of the said Building provided that such signboards shall first be submitted to and approved by the Agent whose approval shall not be unreasonably withheld.  Likewise no external signboard or electric sign shall be installed without the written consent of the Agent.  The owner or owners of any part or parts of the said Building shall observe such House Rules as shall from time to time be made by the said Agent.” (Clause 7)

(3)   “Each of the parties hereto shall not use or cause or suffer or permit to be used the block or shop or car park space or roof of which he is entitled to the exclusive use, occupation and enjoyment or any part thereof for any illegal, unlawful or immoral purpose and shall not do or cause or suffer or permit to be done any thing therein or thereupon which may create unnecessary noise or which may be or become a nuisance, annoyance or inconvenience to the occupiers of the other parts of the said Building or of the premises in the neighbourhood.” (Clause 13)

(4)   “Each of the parties hereto shall have the fullest right and liberty without any consent of or reference to the other parties hereto, or making them a party thereto (a) to sell, mortgage, charge or otherwise dispose of or deal with his or their shares and interest of and in the said premises and the block or shop or car park space or roof on any part of the said Building of which he or they are entitled to the exclusive use, occupation and enjoyment but subject to and with the benefit of these presents and (b) to let or demise to any tenant or lessee the block or shop or car park space or roof on any part of the said Building of which he or they are entitled to the exclusive use, occupation and enjoyment but he or they shall be responsible to the other owner or owners of part or parts of the said Building for the due performance and observance by his or their tenant or lessee of the covenants terms and conditions herein contained.” (Clause 14)

(5)   “Notwithstanding the provisions hereinbefore mentioned the Agent shall have the absolute discretion to disconnect the water or electric supply to the said Block or shop or car park space or roof without further notice being given if default of payment is made one month after such notice of payment aforesaid had been served on the defaulting owner.  In general the Agent shall have the full and absolute authority to make or alter the House Rules from time to time.” (Clause 21)

70.  Section 16 of the BMO provides as follows:

“When the owners of a building have been incorporated under section 8, the rights, powers, privileges and duties of the owners in relation to the common parts of the building shall be exercised and performed by, and the liabilities of the owners in relation to the common parts of the building shall, subject to the provisions of this Ordinance, be enforceable against, the corporation to the exclusion of the owners, and accordingly ─

(a) any notice, order or other document which relates to any of the common parts of the building may be served upon the corporation at its registered office; and

(b) any proceedings in the tribunal in respect of any of the common parts of the building may be brought and pursued by or against the corporation.”

71.  Miss Tsang submitted that clauses 2 and 14 of the DMC conferred rights to Madam Leung and whether such rights should be deprived of or interfered with under the circumstances of this case was a serious question of law for the Court of Appeal to resolve.

72.  Miss Tsang contended that none of clauses 7 and 21 expressly provided for or even related to the Security System and the Registration System and section 16 of the BMO could not be used for the construction of the DMC.  She submitted that it was likely that the IO did not have such power to introduce and implement the Security System and the Registration System and it was a matter of construction of the DMC which required the Court of Appeal to clarify.

73.  Miss Tsang referred to section 31 of the Waterworks Ordinance (Cap 102) and section 56(4) of the Electricity Ordinance (Cap 406) to submit that clause 21 of the DMC was void or voidable.

74.  Section 31 of the Waterworks Ordinance provides that:-

“Any person who, without the permission in writing of the Water Authority, alters, interferes with, damages or destroys any part of the waterworks shall be guilty of an offence.”

75.  Section 56(4) of the Electricity Ordinance provides that:-

“(4) A person who intentionally interferes with an electricity supplier’s electrical installation without the supplier’s consent, commits an offence.”

76.  I do not see that the provisions of the clause 21 of the DMC will necessarily lead to committing the aforesaid offences stipulated in the Waterworks Ordinance or the Electricity Ordinance.  I do not agree that clause 21 of the DMC was void or voidable.

77.  Miss Tsang submitted that clause 7 of the DMC only concerned with installation of the shop signboards.  The House Rules referred to in clause 7 only related to shop signboard and not the Security System or the Registration System.  I agree that clause 7 of the DMC did not authorize the IO to make house rules in terms of the Security System or the Registration System.  The relevant authority was contained in clause 21 of the DMC.  Clause 7 served to reiterate that the owners had to observe the House Rules made by the IO under clause 21 of the DMC.    

78.  Miss Tsang further contended that the blocking, locking up and closed nature of the Security System and the intervening policy of the Registration System were in conflict with or inconsistent with the provisions of the DMC or amounting to interferences to the use of the common passages and the Car Parks.  It was highly likely that such House Rules should be set aside.  She submitted that Madam Leung had a good prospect of success on her appeal and leave should be granted.

79.  She further submitted that the power of the IO to make House Rules was not expressly empowered by the DMC but apparently or merely empowered by drawing implied authority from the words “shall observe such House Rules as shall from time to time be made” in clause 7 or “shall have the full and absolute authority to make or alter the House Rules from time to time” in clause 21.  She submitted that the IO by introducing the Security System and the Registration System had in effect re-written the DMC by making additional provisions as terms in the DMC and overridden the existing express provisions. It had adversely affected the rights of all the owners of the Building.  This case would affect all other cases in future if they bore similar “terms” in their deeds of mutual covenant.  Miss Tsang submitted that there was a strong need for the Court of Appeal to clarify whether the IO had such power in the interests of justice.

80.  Miss Tsang contended that the introduction and implementation of the Security System and the Registration System deprived Madam Leung of her rights conferred by clauses 2 and 14 of the DMC.

81.  The rights conferred by clause 2 of the DMC to Madam Leung relevant to this case were to have access to and entitled to use the common passages of and in the Basement for all purposes connected with the proper use and enjoyment of the Car Parks for the purpose of ingress to and egress from the Car Parks.

82.  Clause 14 of the DMC relevant to Madam Leung’s case provides that Madam Leung should have the fullest right and liberty without any consent of or reference to others to sell, mortgage, charge or otherwise dispose of or deal with her interest in the Car Parks “but subject to and with the benefit of these presents”. (Emphasis added)

83.  Clause 14 of the DMC also provides that Madam Leung should have the fullest right and liberty without any consent of or reference to others to let or demise to any tenant or lessee the Car Parks but Madam Leung should be responsible to the other owners for “the due performance and observance by [her] tenant or lessee of the covenants terms and conditions herein contained”. (Emphasis added)

84.  It can be seen from the provisions of the DMC that the rights of Madam Leung conferred by the DMC were not absolute rights without any restrictions. Such rights were subjected to other provisions of the DMC including clause 7 which provided that Madam Leung “shall observe such House Rules as shall from time to time be made by the said Agent.”

85.  The Agent named in clause 7 was the Agent referred to in clause 5 of the DMC.  Clause 5 of the DMC provides that:

“An agent shall be appointed to act on behalf of the Purchaser and all other Purchasers and Owners of and in the said Building for the purpose of maintaining in good condition and repair all staircases halls passages elevators and all other parts of the said Building used by them in common ….”

86.  Section 16 of the BMO provides that when the owners of a building have been incorporated, the rights, power and privileges of the owners in relation to the common parts of the building shall be exercised by the corporation.

87.  In such case, the rights and power of the Agent to make House Rules pursuant to clause 21 of the DMC were vested with the IO by virtue of section 16 of the BMO.  I do not see the merits of the contention that section 16 of the BMO was irrelevant to the proper construction of the DMC in this case (see para 2 of D’s Grounds).  Section 16 of the BMO is obviously relevant in determining whether the IO had power to make any House Rules.

88.  Clause 21 of the DMC stated that in general the Agent should have the full and absolute authority to make the House Rules from time to time. (Emphasis added)  If this is not express authority, I do not know what else can be express authority.  As stated above, the rights and the power of the Agent in this case (including the authority conferred by clause 21 of the DMC to made House Rules) were to be exercised by the IO by virtue of section 16 of the BMO.  I see no basis for Miss Tsang’s contention that both clauses 7 and 21 did not expressly or implicitly confer any authority on the IO to make any house rules in relation to the use of common parts of the Basement or common passages in the Building.  The IO was responsible for the management of the common parts of the Building including the common passages in the Basement.  Any House Rules made by the IO could only be in relation to the use of the common parts of the Building.  I do not see that the DMC can be interpreted to authorize the IO to make House Rules governing use of non-common parts of the Building.  Such interpretation is plainly against commonsense.

89.  Of course, I agree that the House Rules made by the IO could not contradict the provisions of the DMC (See Tsang Chi Ming v Broadway Nassau Investments Ltd [2009] 1 HKLRD 96).  In this case, I do not see contradiction in the rights granted to Madam Leung under clause 2 of the DMC and the House Rules (ie the Security System and the Registration System) made by the IO pursuant to clause 21 of the DMC.

90.  The Security System required Madam to use a smart card to up-lift the electric bars and to ask the staff of the Management Office to open the rolling shutters for vehicles authorized by her to use the Car Parks to enter the Basement to access to the Car Parks through the common passages in the Basement.  The Registration System required Madam Leung to provide certain information in relation to the vehicles authorized by her to use the Car Parks and the drivers of such vehicles.  

91.  Paras 134 to 152 of the Judgment dealt with the Security System and the Registration System.  I found in para 142 that the control and management of the common parts in the Basement effected by the Security System would not deprive Madam Leung of her rights to the exclusive use, occupation and enjoyment of the Car Parks.  I also found in para 152 that the Registration System was about control and management of the common parts in the Basement and to ensure that the car parking spaces were used properly for car parking purpose.  They were not inconsistent with Madam Leung’s right to access and use the common passages in the Basement for the purposes connected with her proper use and enjoyment of the Car Parks.  I do not see how the Security System and/or the Registration System would deprive Madam Leung of or interfere with her rights to sell, mortgage, charge, let, demise, or otherwise dispose of or deal with her interest in the Car Parks as stipulated in clause 14 of the DMC.

92.  Clause 13 of the DMC requires the owners not to use their premises for any illegal, unlawful or immoral purpose and not to create unnecessary noise. I do not see how the Security System and/or the Registration System were in contrary to or in conflict with clause 13 of the DMC.

93.  In Hang Tsui Court (IO) v Ho Fu [2011] 5 HKLRD 364 the Court of Appeal held that a house rule restraining the owners from bringing or keeping dogs in any part of the estate or the common areas of any building therein was not inconsistent with the owners’ entitlement to easements provided by the deed of mutual covenant and their sole and exclusive right and privilege to the exclusive use and occupation and enjoyment of their flats when the deed of mutual covenant concerned required the owners to observe, perform and comply with all the covenants and provisions of the deed of mutual covenant and the house rules.  The same applies to this case.

94.  Appeal relying on the ground of misconstruction of the terms of the DMC and/or of the BMO does not have a reasonable prospect of success.  I refuse to grant leave to appeal on such ground.

Misinterpretation of facts

95.  Miss Tsang contended that the Judgment had misinterpreted the following facts:-

(1) There was no resolution of the owners’ meeting or no or no valid resolution of the Management Committee for installations of electric rolling shutters and electric bars, implementation of the Security System and the Registration System contrary to finding in para 141 of the Judgment.  She submitted that such installations and implementation were unlawful, unenforceable, void or voidable, or ultra vires. (Para 3 of D’s Grounds)

(2) The Security System had the effect or in reality “close” the whole Basement by prohibiting (personal or vehicular) access to the Basement rather than “re-open” it after completion of the Works. (Para 4 of D’s Grounds)

(3) Apart from the bare assertion from Mr Lam, the IO’s witness, there was no evidence from the IO to support the real necessity to introduce the Security System and the Registration System.  The implementation of the Security System and/or the Registration System was unreasonable contrary to the finding in para 165 of the Judgment. (Para 5 of D’s Grounds)

(4) It was not unreasonable for Madam Leung to refuse signing any undertaking or giving her consent to be bound by the Registration System contrary to the finding in para 167 of the Judgment. (Para 6 of D’s Grounds)

(5) Low usage of the car parking spaces in the Basement after it was reopened was due to the abrupt changes of the access to the entrance and exit of the Basement from open to closed or secluded condition.  As a result, most carpark owners including Madam Leung had been prohibited to access to the Basement, contrary to the finding that demand for car parking spaces of the building was fairly low. (Para 7 of D’s Grounds)

96.  Madam Leung had not taken issues on resolution for installations of electric rolling shutters and electric bars, implementation of the Security System and the Registration System in her pleadings or witness statements. This was not an issue included in the joint statement on issues in dispute filed by the parties on 26 April 2012.

97.  As this was not one of the issues in dispute between the parties, not much evidence had been adduced at the trial on this issue.  Nevertheless, there were still some evidence at the trial showing that the matters complained of had been discussed either in the meetings of the owners or the Management Committee.

98.  The IO’s witness, Mr Lam, had testified that the Management Committee had resolved to install the rolling shutters in about January/February 2011 (see para 80 of the Judgment).  A meeting minutes of the Management Committee held on 7 January 2011 had been produced at the trial (see p 36 of vol 10 of the trial bundles) which recorded as item 1.3 that the chairman had reported that “建議大廈停車場A B座出入口增加鐵閘用作保障車主財物及保安，已正展開報價。”  Another meeting minutes of the Management Committee held on 25 February 2011 was also produced at the trial (see p 37 of vol 10 of the trial bundles) which recorded the following resolution:－

“4.5 議決車場捲閘工程公司

本大廈收到3份報價： 1. 富城裝飾工程$88,800， 2. 香港捲閘公司$70,000， 3. 達興建築有限公司$96,000。各委員一致通過議決第2家香港捲閘公司因價錢最低。”

99.  The above showed that the installation of the rolling shutters had been approved by the Management Committee.

100.  There was no dispute that the repairs and renovation to the Building was approved in the owners’ meeting held on 30 May 2010.  The said owners’ meeting had also resolved to award the contract for the repairs and renovation to Tat Hing Construction Co Ltd (“Tat Hing”)  (see pp 35-36 of vol 9 of the trial bundles).  In the letter dated 15 October 2010 referred to in para 74 of the Judgment, Tat Hing had listed out works to be carried out in the Basement which included “停車場出入口新做電動閘bar工程”.  This showed that the installation of the electric bars had been approved by the said owners’ meeting.

101.  A further meeting minutes of the Management Committee held on 14 March 2011 had also been produced at the trial (see p 1709 of the trial bundles) which recorded the following matter:

“5.1 主席詢問黄鄺顧問車場何時使用。顧問回答車場大部份完工，經已可使用，並由委員決定何時開放。委員會一致要求管理處出通告，業主可以到管理處登記及辦手續。”(Emphasis added)

102.  The notice referred to in the aforesaid meeting had been set out in para 78 of the Judgment which clearly set out the Registration System.

103.  The evidence adduced at the trial certainly does not support Miss Tsang’s contention as set out in para 3 of D’s Grounds.

104.  The operation of the Security System had been dealt with in paras 134 to 143 of the Judgment.  I do not see the access to the Basement regulated by management measures under the Security System supports Miss Tsang’s contention it had the effect of closing the whole Basement.

105.  Mr Lam’s evidence on the need to improve security for the Basement had been set out in para 79 of the Judgment.  Madam Leung had not adduced evidence to challenge Mr Lam’s evidence.  Photographs were adduced at the trial to show that the car parking spaces in the Basement were used for residential or storage purposes (see pp 1235 to 1238 of the trial bundles).  Madam Leung had admitted at the trial that she herself had used the Car Parks for storage (see para 40 of the Judgment).  Miss Tang’s contention of “no evidence” to support the need to introduce the Security System and the Registration System simply cannot stand.

106.  Paras 161 to 167 of the Judgment dealt with Madam Leung’s refusal to abide by the Registration System.  Miss Tsang only repeated that the Security System and the Registration System had the consequence and effect of interference with and/or restrictions with Madam Leung’s use of the common passages to the Car Parks and access in and out of the Basement.  As stated above, Madam Leung’s access to and use of the common passages in the Basement was subjected to her complying with other provisions of the DMC which included compliance of the House Rules made by the IO.  Other than arguments already rejected by the court, Miss Tsang failed to show that  the finding in para 167 of the Judgment was wrong.

107.  No evidence had been adduced at the trial to support Miss Tsang’s contention that the low usage of the car parking spaces in the Basement was caused by the management control introduced after the Basement was reopened.  I do not see any reasonable prospect of success in an appeal relying on a ground without evidential basis.

108.  The aforesaid ground of appeal on misinterpretation of facts set out in D’s Grounds does not have a reasonable prospect of success.  I refuse to grant leave to appeal on this ground.

Overlooking evidence

109.  Miss Tsang contended that the Judgment had overlooked the following evidence:-

(1) Madam Leung had approached the Management Office for access to the Basement in March 2011. (Para 8 of D’s Grounds)

(2) Madam Leung had approached the Management Committee for getting two of the Car Parks for renting out to offset her debts to the IO which was not accepted by the IO. (Para 9 of D’s Grounds) 

(3) The IO’s closure of the Basement and refusal to issue smart cards to Madam Leung had led to Madam Leung’s inability to use or rent out the Car Parks.  Such acts also prevented Madam Leung from quantifying her loss and prohibited her to mitigate her loss or discharge her duty to mitigate. (Para 10 of D’s Grounds)

(4) There was evidence showing that there was demand for car park spaces in the Building and the car park spaces had rental value. (Paras 11 and 12 of D’s Grounds)

110.  The fact that Madam Leung had visited the Basement after 15 March 2011 had been noted in paras 30 and 49 of the Judgment.  Madam Leung had approached the IO requesting to use the Car Parks had also been noted in para 153 of the Judgment.  Evidence of Madam Leung in this aspect had not been overlooked.

111.  Miss Tsang referred to a meeting minutes of the Management Committee held on 14 September 2011 to submit that the court had overlooked that Madam Leung had approached the Management Committee for getting two of the Car Parks for renting out to offset her debts to the IO.  The paragraph of the meeting minutes referred to by Miss Tsang stated as follows:-

“1.7 地庫車位業主梁美春表示還款法團三萬先給兩車位出租租金代還款，法團正咨詢律師意見後再回覆梁美春女士。” (See p 47 of vol 9 of the trial bundles)

112.  Madam Leung had not referred to this piece of evidence in her witness statement or at the trial.  It had also not been referred to by Miss Tsang in her submissions at the trial.  It was held in para 159 of the Judgment that the IO was wrong in depriving Madam Leung of her rights to have access to the common passages in the Basement to use the Car Parks on the ground that Madam Leung still owed management fees and/or repair contributions to the IO.

113.  Miss Tsang submitted that paras 8 and 9 of D’s Ground showed that Madam Leung had not abandoned the Car Parks and did want to lease them out for rent. I found that the Car Parks were not used or rented out by Madam Leung immediately before the closure of the Basement in the evening of 14 March 2010 and that the Car Parks had not been used for car parking purpose for some years before the closure of the Basement.  I also found that no evidence had been adduced to show that Madam Leung intended to rent out any of the Car Parks in late 2010 (see para 201 of the Judgment).  I found that Madam Leung had not instructed estate agents to rent out the Car Parks whether during the closure of the Basement or after its reopening (see para 203 of the Judgment).  Miss Tsang did not seek to show that any of my above findings was wrong.  The Judgment did not hold that Madam Leung had abandoned the Car Parks or not bothered to lease them out for rent.

114.  I agree that the IO’s closure of the Basement and refusal to issue smart cards to Madam Leung had led to her inability to use or rent out the Car Parks.  I also agree that the acts of the IO might have caused loss to Madam Leung and prevented Madam Leung from mitigating her loss.  However, I do not see how such acts would prevent Madam Leung from quantifying her loss.  Suffering loss and quantifying loss are two separate matters.  Miss Tsang failed to show me the logic for her said contention.

115.  Miss Tsang stated that there was evidence that the IO had rented out various car parking space at monthly rental of $1,000 to $2,000 and the IO had rented out certain parts of the common areas in the Basement as parking spaces to earn further income.  She submitted that this showed that there was demand for car park spaces in the Building. 

116.  Miss Tsang submitted that the above evidence proved that there were market demand and rental value for car park spaces in the Basement.  The court had not overlooked evidence on market demand and rental value for the car park spaces in the Basement.  Madam Leung’s evidence on these issues was dealt with in paras 39 to 43 of the Judgment.  The IO’s evidence was dealt with in paras 90 to 92 of the Judgment.  Miss Tsang’s submissions on these issues made at the trial were dealt with in paras 192 to 195 of the Judgment.  Mr Cheung’s submissions made at the trial were dealt with in paras 196 to 197 of the Judgment.

117.  The Judgment did not find that there was no market demand or that car park spaces in the Basement had no rental value.  Evidence showed that there were some demands for car park spaces in the Basement and that the car park spaces were of some rental value.  But Madam Leung had failed to adduce evidence to prove the quantum of her loss.  The discussion on Madam Leung’s failure to prove quantum was set out in paras 201 to 206 and 208 to 211 of the Judgment.

118.  For the above reasons, I do not see a reasonable prospect of success on appeal relying on the aforesaid ground of overlooking evidence.

Double standard (paras 13 to 21 of D’s Grounds)

119.  Miss Tsang contended that the ratio decidendi in Oscar Toys Manufactory Ltd 對嘉威大廈業主立案法團 [2001-2003] HKCLRT 305 should apply throughout all periods of time successively, including the 3^rd Period (Paras 13 and 16 of D’s Grounds).  She submitted that it was held in para 159 of the Judgment that Madam Leung’s right to access to and use the common passages in the Basement was not subjected to any pre-condition of paying up management fees or management contributions.  She contended that following the same principle, Madam Leung’s right to access to and use the common passages in the Basement was not subjected to the House Rules made by the IO and the power of the IO to control and manage the common parts, contrary to the finding in para 164 of the Judgment (Para 15 of D’s Grounds).

120.  Miss Tsang’s contention was premised on her argument that the implementation of the Security System and the Registration System had the effect of closing the Basement.  As stated above, such argument does not have reasonable prospect of success in an appeal.

121.  Closing the Basement as what had been done by the IO in the 1^st Period was different from managing the access to the Basement after the 1^st Period.  They were of different nature.  Furthermore, closing of the Basement was not authorized by the DMC whereas making of House Rule was authorized by the DMC.  The Oscar Toy case is applicable to Madam Leung’s claim for the 1^st Period but not for the 2^nd and 3^rd Periods.

122.  Miss Tsang rightly pointed out that the key issue in Oscar Toy case was whether the resolution passed by the general meetings in respect of the rules in that case were in accordance with the provisions of the relevant deed of mutual covenant, not whether the rules were reasonable but submitted that this was in contrary to the finding in para 120 of the Judgment (para 17 of D’s Grounds).  Para 120 of the Judgment held that the resolution resolving to carry out the Works was reasonable and within the authority of the owners’ general meeting.  It has nothing to do with closure of the Basement or the House Rules.

123.  Miss Tsang further submitted that the Judgment held in para 132 that reasonableness was a non-starter to defend a claim for breach of contract (ie the DMC).  She submitted that such finding defeated the IO’s defence on the basis of reasonableness and other findings in paras 165, 179, 180, 181 and 185 of the Judgment (Para 17 of D’s Grounds).  This submission was based on a false premise that the Security System and the Registration System were in breach of the DCM.  The findings in the Judgment were that the Security System and the Registration System were not inconsistent with other provisions of the DMC and were not in breach of the DMC.  Miss Tsang has failed to show that Madam Leung has a reasonable prospect of success to appeal against the above findings.

124.  Miss Tsang submitted that the implementation of the Security System and the Registration System was equivalent to closing the Basement and that the DMC had not authorized the IO to “lock up” the Basement in order to effect “security and insurance” (Paras 18 and 19 of D’s Ground).  This is only repeating what had been rejected.

125.  Miss Tsang stated that the IO had wrongfully refused to issue smart cards for the Car Parks to Madam Leung and was liable to Madam Leung’s claim for breach of DMC and private nuisance for the 2^nd Period.  The same principle should apply to the 3^rd Period even though Madam Leung was still reluctant to abide by the “House Rules” (Paras 20 and 21 of D’s Grounds).

126.  Miss Tsang had rightly noted that the reasons for Madam Leung not getting the smart cards for the 2^nd Period and the 3^rd Period were different.  The applicable principles are different.  In not issuing the smart cards to Madam Leung for the 2^nd Period, the IO was in breach of the DMC (See paras 153 to 160 of the Judgment).  In not giving the smart cards to Madam Leung for the 3^rd Period, the IO was not in breach of the DMC (See paras 161 to 167 of the Judgment).  

127.  I also see no reasonable prospect of success for an appeal relying on this ground.

Quantum (para 22 of D’s Grounds)

128.  Miss Tsang submitted that nominal damages were granted to cases where a claimant was seeking to establish a legal right but had not effectually suffered any actual loss.  Such principle was not applicable in this case.  She submitted that Madam Leung was entitled to damages to be assessed for the 1^st Period, the 2^nd Period and the 3^rd Period.

129.  Nominal damages are awarded not only to cases where the claimants suffered no actual damages but also to cases where the claimants have failed to adduce evidence on damages alleged to have been sustained as in Born Chief Co v George Tsai and Anor [1996] 2 HKLR 188 referred to in para 211 of the Judgment.

130.  Since there was no order for split trial in this case, it will be wrong for the court to order damages to be assessed.  When Madam Leung failed to adduce evidence to prove quantum of her loss at the trial, she would only be entitled to nominal damages.  Nazareth VP stated in Born Chief Co v George Tsai and Anor at 195 that:

“Proceeding to the matter of damages, it is plain from the evidence, that there was significant physical damage. But of the quantum of damages, there was a conspicuous lack of actual evidence. The plaintiff did not apply for a split trial and so in the ordinary way the trial would be expected to proceed from start to finish. Counsel for the defendants rightly submitted that in the absence of evidence establishing the quantum of damages, the appropriate award was one of nominal damages. Such a result would obviously mean that the significant damage that the evidence revealed would not be compensated and must have offended the judge’s sense of justice. But the good, efficient and increasingly, the affordable administration of justice requires that parties present their entire cases and cannot expect a second bite at the cherry simply because they failed to apply for a split trial or to produce their requisite evidence. The judge was plainly wrong in directing an inquiry to be made by a master as to damages, and that order cannot be permitted to stand.”

131.  Miss Tsang stated in paras 8 and 9 of the Defendant’s Statement of Reasons as follows:

“8. Furthermore, the IO’s act, regardless whether it was lawful or unlawful, unquestionably caused Madam Leung lost her use of 6 car park spaces from the evening of 14 November 2010 up to now, facts of which in reality deprive her ownership of her private properties.

9. It is extremely unjust to Madam Leung for granting nominal damages of $20 in total to compensate her loss of private ownership, especially when the IO continues to manage the Basement in the same manner before and after 23 January 2013.  To allowing such situation to persist, she will lose her the properties or use of her properties permanently.  So leave to appeal should be granted in the interest of justice.”      

132.  Madam Leung was required to abide by the House Rules made by the IO in order to use the common passages in the Basement.  I do not see that Madam Leung had been deprived of her ownership of her private properties.  I also do not see that Madam Leung would lose her properties or use of her properties permanently.  Madam Leung was awarded nominal damages because she failed to prove quantum of her loss for the 1^st Period and the 2^nd Period.  I do not see that the interests of justice would require the quantum issue to be put before the Court of Appeal.

133.  Madam Leung does not have a reasonable prospect of success in an appeal on quantum relying on this ground.

Conclusion to Madam Leung’s application

134.  D’s Grounds are merely repeating submissions advanced and rejected at the trial.  I am not satisfied that Madam Leung has reasonable prospect of success on an appeal relying on any of these grounds.

135.  There is no standard form deed of mutual covenant in Hong Kong.  The meaning of a clause in a deed of mutual covenant has to be determined in the context of the relevant case and case by case.  I see no public interest element requiring the Court of Appeal to re-examine the DMC afresh.

136.  I also dismiss Madam Leung’s application for leave to appeal.

Costs

137.  As I have refused both parties’ applications for leave to appeal, a fair costs order will be no order as to costs for both applications.  I so order. This is an order nisi which shall become absolute after 14 days from the date of this decision unless application is received from either party within the said 14 days to vary the same.