THE INCORPORATED OWNERS OF HOI LUEN INDUSTRIAL CENTRE AND ANOTHER v. OHASHI CHEMICAL INDUSTRIES (HONG KONG) LTD

IN THE COURT OF APPEAL

1995, No. 3
(Civil)

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J U D G M E N T

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Godfrey, J.A. :

1. This is an appeal from an order of Bewley, J. made on 23 November 1994 and granting at the trial of the action a mandatory injunction to compel the defendant in the action, Ohashi Chemical Industries (Hong Kong) Ltd., to demolish and remove an air-conditioning cooling tower erected by the defendant in breach of covenant.

2. The plaintiffs in the action are the Incorporated Owners of Hoi Luen Industrial Centre and Goodwell Property Management Ltd., who are respectively the incorporated owners, and the manager, of the building known as the Hoi Luen Industrial Centre, 55 Hoi Yuen Road, Kowloon.

3. The rights of the parties are governed by a Deed of Mutual Covenant dated 9 September 1985.

4. Under the Deed of Mutual Covenant, no owner is permitted to do what the defendant has done here. That is not in dispute. However, the defendant is not alone. Many other owners of units in the building have done the same. In these circumstances, says the defendant, it is unfair and unjust that it should now be singled out and ordered to remove its cooling tower while others have not been called on or, at any rate, have not yet been compelled, to remove theirs.

5. It has to be remembered that almost every multi-storey building in Hong Kong, residential and industrial alike, operates under a system of local law, being the rules prescribed for its management by a Deed of Mutual Covenant. So important is this aspect of Hong Kong life that the legislature has been compelled from time to time to intervene. In particular, it passed in 1972 the Multi-storey Buildings (Owners Incorporation) Ordinance, Cap. 344, under which incorporated owners are placed under a statutory duty to do all things reasonably necessary for the enforcement of the obligations contained in the Deed of Mutual Covenant: see s.18(1)(c). When, then, the incorporated owners find that there is a breach of covenant being perpetrated by one of the owners, it is not only their right but their duty to seek to enforce the covenant. And one of the duties of the manager under the Deed of Mutual Covenant here, for example, is expressed as follows in part B of section 5:

"1. The Manager will manage the Land and the Building in a proper manner ..... the Manager shall have the following duties ..... :

(15) to remove any structure, ..... fitting or other things in or on any part of the Land and the Building which have been erected in contravention of the terms of this Deed."

6. It follows that in the instant case the plaintiffs were not only entitled but bound to take proceedings for the enforcement of these covenants. It follows, too, that they could not have granted expressly to this defendant or any other owner of any unit in the building the right to act in contravention of the Deed of Mutual Covenant as this defendant has done. What cannot be done expressly cannot be done impliedly. Although equity will sometimes restrain a plaintiff in the exercise of his legal rights because it would be inequitable and unjust in all the circumstances to allow him so to exercise those legal rights, equity will not hold him bound by acquiescence to allow something which he could not have allowed by express grant. (For these propositions, reference may usefully be made to The Incorporated Owners of Chungking Mansions v. Shamdasani, Civil App. 199 of 1991, 26 February 1993, so far, apparently, unreported.)

7. For these reasons, quite apart from those given by the judge for granting the injunction, I would be in favour of dismissing this appeal. Even if I were wrong so far, I would still be in favour of dismissing this appeal because, as the judge thought, there was no good ground why, in the exercise of his discretion, he ought to refuse the injunction the plaintiffs claimed in order to secure compliance on the part of the defendant with the negative covenants contained in the Deed of Mutual Covenant. It is a strong thing for this court to interfere with the exercise of the discretion of the judge in such a case. It is the judge who is entrusted with the function of granting or refusing the equitable remedy of an injunction. If the judge has erred in principle, or has gone plainly wrong because he has made a faulty assessment of the factors which it is his duty to take into account, then, no doubt, it is the right and duty of this court to interfere. In the present case, the judge, after carefully analysing the facts, was of the opinion that it would not be unfair to the defendant to grant the injunction sought. But he went further. He said this:

"I find that the defendant has not proved that the plaintiffs acquiesced in his erection of the cooling tower."

8. That being so, no question of injustice or unfairness arises at all, no case for the intervention of equity having been established.

9. The defendant's notice of appeal raises no challenge to any finding of fact by the judge. The notice of appeal is limited to a challenge to the exercise by the judge of his discretion in making the order which he made. The defendant has no case; having failed to prove acquiescence, it has no ground for asking us to interfere with the judge's exercise of his discretion. For all these reasons, I would dismiss this appeal, as I have already indicated.

Litton, J.A. :

10. I concur.

Nazareth, V.-P.

11. I also agree.