WING MING GARMENT FACTORY LTD v. THE INCORPORATED OWNERS OF WING MING INDUSTRIAL CENTRE AND OTHERS

HCA 8805/1993

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 8805 OF 1993

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D E C I S I O N

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1.  I will grant the interlocutory injunction sought by the Incorporated Owners.

2.  Mr. Lee (appearing for Wing Ming) submits that I should not grant such an injunction.  This is because (according to Mr. Lee) all other owners in the Building have been allowing their units to be used in ways contrary to the Occupation Permit or the Conditions of Sale for the Building.

3.  Assume (without accepting) that all other owners are so conducting themselves.  I do not see how that can be any conceivable defence to an interlocutory injunction.

4.  The Incorporated Owners have an obligation to enforce the covenants in the DMC.  I am unable to see how, merely because owners (whether some, a majority, or all of them) in the Building are ignoring covenants in the DMC, the Incorporated Owners cease to have any obligation to enforce such covenants. 

5.  Indeed, I am unable to see how the Court can pierce the corporate veil and look behind the person known as the Incorporated Owners to see how individual owners in a Building have conducted themselves relative to particular covenants.

6.  I do not see how the acts of the individual owners here (whether some, a majority, or all or them) can give rise to any representation, estoppel or waiver in relation to the performance by the Incorporated Owners of its obligations. 

7.  Neither the owners in the Building nor (for that matter) the Incorporated Owners can deliberately or inadvertently authorise something which is illegal.  Neither the owners nor the Incorporated Owners can deliberately or inadvertently grant rights which are not in their power individually or jointly to grant.  None of them can deliberately or inadvertently authorise breaches of the Conditions of Sale imposed by the Government as landlord at the time of granting the land, nor authorise violations of the Occupation Permit.

8.  Mr. Lee says that the Incorporated Owners is being selective in whom it targets to enforce the DMC. The Incorporated Owners (Mr. Lee complains) has selected Wing Ming for reasons of vendetta.  But the Incorporated Owners (Mr. Lee asserts) had done nothing about violations by other owners, some of whom are officers of the Incorporated Owners.  There is therefore (Mr. Lee reasons) bad faith and I should withhold granting an injunction in my discretion.

9.  I do not think that this amounts to any defence. 

10.  If Wing Ming believes that the Incorporated Owners is not performing its proper duty, its remedy is straightforward.  It can apply to the Court for an Order of specific performance requiring the Incorporated Owners to enforce relevant obligations under the DMC.  The remedy to any alleged "potential inequity" alleged by Wing Ming is in its own hands as an individual owner privy to the DMC and entitled to see that the covenants there are properly enforced.  What Wing Ming is not entitled to do is to say, because other owners are flouting the DMC, it can too.

11.  Finally, even if there were any merit in Mr. Lee's arguments, by an undertaking to the Court given by affidavit filed on 2 February 2007, Wing Ming agreed to enforce the covenants in the DMC against any of its tenant in breach thereof. The rigour of that undertaking has not been changed in any way.  

12.  Thus, regardless of the conduct of other owners, Wing Ming has told the Court in no uncertain terms that it will diligently enforce the DMC against its tenants who use the Ground Floor premises in breach of the DMC.

13.  For the purposes of this hearing, Mr. Lee concedes that Wing Ming has allowed its Ground Floor premises to be used otherwise than in accordance with the Land Grant for the Building.

14.  As far as I can see, Wing Ming has failed diligently to enforce the terms of the Occupation Permit and Conditions of Sale against Mantex (Wing Ming’s tenant).  On the contrary, it has applied to set aside a summary judgment which the Incorporated Owners obtained before Chu J on 3 October 2007 for breach of the DMC and Occupation Permit.  Its case is apparently that (because of the conduct of all other owners) the Occupation Permit and Conditions of Sale can be ignored even though the DMC requires them to be observed. 

15.  This is all contrary to Wing Ming's undertaking to the Court.  It is plain that it does not take its undertaking to the Court seriously.  It has even suggested in some correspondence and (tentatively before me) that there never was an undertaking to the Court.  In all the circumstances, an express injunction appears to be called for at a minimum. 

16.  Accordingly, there will be an interim injunction in terms of the 1st paragraph of the Incorporated Owners' Summons dated 12 January 2007.