THE INCORPORATED OWNERS OF PARK PLACE v. BUDWORTH CO. LTD.

Head Note

Building Management - Breach of Deed of Mutual Covenant - External Appearance - tinted glass window replaced by clear glass window - Manager's written consent required - Whether external appearance a question of fact - Manager no express objection before work was completed - acquiescence - Whether approval given by Manager - Terms of mandatory injunction.

LDBM 347/2000

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION NO. 347 OF 2000

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JUDGMENT

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Introduction

1. The Applicant is a corporation registered under the predecessor of the Building Management Ordinance Cap. 344 ("Ordinance"), namely, the Multi-storey Buildings (Owners Incorporation) Ordinance. It is also the incorporated owners of the building known as ALL Those 143 equal undivided 10,000th parts or shares of and in Rural Building Lot No. 1055 ("the Lot") and of and in the building erected thereon and known as "Park Place" ("the Building"). The Respondent has since 30th May 1985 become the registered owner of Apartment I on 7th Floor of Block C ("the Unit") and Car Parking Space No. 51 on the Podium Upper Level of Park Place ("Property").

2. The owners of the Building including the Respondent are bound by a deed of Mutual Covenant dated 23rd May 1985 ("the DMC").

3. In this application the Applicant sought a number of reliefs to enforce the DMC. In particular the Applicant sought an order that the Respondent do forthwith remove certain clear glass windows and replace them with tinted glass windows in keeping with all other glass windows situated in the Building.

4. The Applicant says that the Respondent was acting in breach of the DMC that in about November 1999 the Respondent had replaced certain tinted glass windows of the Property and installed instead clear glass windows thereby altering the façade or exterior appearance of the Building. The change of appearance has been identified by certain photographs as at page 10 of the Witness Statement Bundle.

5. The Respondent on the other hand admitted that clear glass windows had been installed. However, this was done with the approval, either express or implied, from the Applicant's agent, First Pacific Davies Property Management Limited ("FPD"). Alternatively, such change of window glass was acquiesced by FPD.

Issues

6. This case therefore turns on the following main issues :-

(a) whether the change from tinted window glass to clear window glass had altered the external appearance of the "Unit" or any part of the Estate ;

(b) if the answer to (a) is yes, whether the Applicant had approved such change ;

(c) whether the Applicant had acquiesced to the use of the clear window glass.

External Appearance

7. In my judgment the meaning of "external appearance" is a question of fact. Whether there has been a "change" in external appearance would necessarily depend how that change shows. That may depend sometimes on a number of factors including the original and subsequent appearance of the unit and the building where the unit situates, and the background environment. To this it may be added that photographs taken selectively tend to be misleading. The list is probably not exhaustive but each case must depend on its own facts.

8. In relation to the impact of the change of the window glass on the external appearance of the Property (perhaps excluding the reference to the associated car park), I was referred to certain photographs, namely page 10 of the Witness Statement Bundle, pages 157 to 163 of the Documents Bundle, and a later filing of a set of photos known as Exhibit R-1.

9. I can only say that during the course of evidence, it was clear that exhibit R-1 had been taken rather more intentionally to illustrate the possible lack of change of external appearance. This approach perhaps reveals the problem of being selective and lack of objectivity. A further example is that of the use of clear glass at the entrance lobby. I do not believe that the use of clear glass at the lobby is of great moment. They probably should not be there but they had certainly occupied a minor role in so far as external appearance of the whole of the building is concerned.

10. I also do not find the approved use of various types of tinted glasses should be criticized. It is unreasonable to put forth the argument that permission to use various types of tinted glasses should be extended to permission to use of either tinted or clear glass. In the present case, the contractor (Mrs. Hsia) was an experienced person who claimed to have over 20 years of experience on decoration and was certainly well verse with different types of window glass.

11. I hold that the Respondent's conduct in changing from tinted window glass to clear window glass had altered the external appearance of the "Unit" or the Estate. In my judgment there has been a clear change of external appearance, for this type of building, at least during certain period(s) of time of the day, especially when the curtains were not drawn.

Approval

12. Having concluded there has been a change of external appearance of the Building or the "Estate", I now turn to whether approval was obtained and the provisions governing such approval. The provisions of the relevant deed of mutual covenant are relevant.

Deed of Mutual Covenant

13. There is no dispute that the Applicant is empowered to manage the Building, which management is governed by the DMC (and provisions under the Building Management Ordinance Cap. 344. Under Clause 5 the Respondent is bound like other owners of the Building by the provisions and covenants of the Third Schedule of the DMC.

14. Clause 16 of the Third Schedule of the DMC then provides :

"No Owner shall do or permit to be done any act or thing which may or will alter the external appearance of any part of the Estate (emphasis provided) without the prior consent in writing of the Manager."

15. "Estate" is defined under Part I of the DMC as the entire development constructed on the Lot and includes the Building.

16. Clause 19 of the Third Schedule of the DMC provides that:

"Each Owner may at his own expense install in his Unit additions, improvements, fixtures fittings and decoration and remove the same Provided however that no such installation or removal shall ...interfere with the enjoyment of any part of the Estate and provided further that no such addition or improvements where the structure or the external appearance of the Unit (emphasis provided) is or may [be] affected may be installed or erected without the prior written consent of the Manager and in seeking such consent the Owner shall first submit plans for such addition or improvement and the decision of the Manager as to whether or not to give such consent shall be final ..."

17. "Unit" is defined under Part I of the DMC as "a part of the Estate to which the full and exclusive right and privilege to hold use occupy and enjoy has been or is intended to be assigned to an Owner and "his Unit" in relation to an Owner means the Unit or Units in respect of which that Owner has the full and exclusive right and privilege to hold use occupy and enjoy".

18. The approach to construe such covenants as Clauses 16 and 19 can be found in a passage in C & G Homes Ltd v. Health Secretary [1991] Ch 365 at p. 388H-389B per Lord Donaldson :

"... I have no doubt that the general guidance contained in the judgment of Lindley LJ in Rolls v. Miller, 27 ChD 71, 87 as to the approach to be adopted is good law, He said

'Now the first question to be considered is what is the object of this covenant ? The covenant must be construed consistently with that object, and on the other hand, something may fall within the scope of the covenant which does not fall within the words. One must look, therefore, at both the words and the object".

19. In my judgment, adopting this approach, the construction of both Clauses 16 and 19 are relatively strict forward. They impose a burden on an owner of the Building not to do anything and in particular not to "install in his Unit additions, improvements, fixtures fittings and decoration and remove the same" which may alter the external appearance of the Building or the Estate as a whole. There is no doubt in my mind that the words "additions, improvements, fixtures fittings and decoration" would include window or window glass. The meaning of the term "external appearance" is clear. In the context of the present case, it means the type of window glass that must be or ought to have been approved in writing by the Applicant or on its behalf. It is not necessary for the DMC or the House Rules to prescribe what type of tinted glass is acceptable, although for good management if there are published codes this would avoid unnecessary disputes between owners and management.

20. The burden on an owner may at first sight sound heavy. However, the escape is simple: all that is required is the written approval of the Manager, namely, FPD. Clearly, the requirement of written approval necessarily imports the notion that the Manager could and should approve certain works notwithstanding they would affect external appearance of the Building. Therefore, such approval should in the normal course of event also be subject to an implied term that the approval is not to be unreasonably withheld.

21. In this respect, the Applicant argued that the doctrine of what cannot be done expressly cannot be done implicitly is applicable in the present case. It was suggested that in the absence of written approval, neither the Applicant nor the Manager (FPD) could as a matter of law approve the replacement of glass windows. In my view this is a restrictive view which may work injustice for example in the case of a capricious manager. Further, alteration of external appearance is expressly allowed, provided written approval of the Manager is forthcoming. No objective criteria are prescribed as to under what circumstances the Manager can approve the alteration. Such wide discretion granted to the Manager may work injustice if it is exercised arbitrarily.

22. I was referred to the case of The Incorporated Owners of Tuen Mun Hung Cheung Industrial Center (Phase I) v. United Hong Kong Limited (unreported) HCMP 2991/98, 22 November 1999 which concerns a clause in the deed of mutual covenant that prohibits owners to make structural alternations or to repaint or redecorate the exterior of the building except with the written consent of the Manager as a part of general scheme for repainting or redecorating the exterior of the building. In that case, the owner had removed certain part of the external wall and therefore there was suspected structural alterations of an industrial building. Clearly under this type of situation one would have regard to, as the Honourable Mr. Justice Cheung (as he then was) did, the impracticality of instructing architects in question to see if structural alterations had in fact been made. The Court in that case was not concerned with repainting or redecorating of the external wall. The relevant clause is quite different from Clauses 16 and 19 of the DMC in present case because the written consent of the Manager in that case was limited to the purpose of a general scheme for repainting or redecorating the exterior of the building. Indeed the Court in the Hung Cheung Industrial Centre case merely ordered partial reinstatement on ground that it was both unfair and inequitable on the part of the incorporated owners to seek reinstatement of alterations going back many years ago.

23. However, since there is no plea in the Notice of Objection that the Applicant's approval was unreasonably withheld this issue does not arise. The present dispute was fought entirely on the basis of whether approval had or had not been given. The present dispute is not whether certain type of tinted glass should or should not have been approved. There should be no question in the mind of parties who are on the one hand professional managers and on the other hand professional contractors that tinted glass is quite different from clear glass.

24. The Respondent also argued that consent given orally would suffice for the purpose of determining whether approval had been given. It appears to me that on a true construction of Clauses 16, 18 and 19 of the DMC the Manager in some circumstances could have waived its rights to give approval in writing.

25. However, to the extent it is argued that mere inaction in response to the work being performed by the Respondent in the present case, I cannot accept this could constitute waiver. In my view the Respondent must prove first that the Applicant well knew what the Respondent was doing, and secondly the Respondent had suffered prejudice. In so far as I have found that there was request for glass sample, the evidence merely showed that approval of erection of scaffolding had been given by the Applicant and that workers had been allowed to enter the Unit and to work. Such conduct on the part of the Applicant is equivocal and neither here nor there.

Oral Approval

26. The Respondent accepts that there was no written approval but contends at trial that there had been express oral approval. This suggestion was made in addition to the Respondent's Notice of Objection that there was a lack of objection on the part of the manager, FPD which the Respondent says this constitutes approval.

27. Since there is a direct conflict on evidence on whether oral approval has been given, it is necessary to consider the oral testimony of parties. I first refer to the Notice of Objection, which the Respondent merely contends that there had been approval from the Applicant. Particulars were then given that the Applicant had failed to stop the work of the Respondent and never made any complaint until 14 January 2000, some 2 months after the works had allegedly been completed. The Respondent then contended that on or about 21st October 1999, the Respondent's contractor and designer, Miagene Interiors ("Miagene") applied by letter to FPD for inter alia, permission to carry out works including the change of windows. The plans submitted to FPD stated that clear glass would be used for the new windows. On or about 25th October 1999, Mr. David Siu of FPD [merely] asked Miagene concerning the validity of insurance cover. No objection to the use of clear window glass was ever mentioned. Then window replacement work commenced on 17th November 1999 and was completed on 30th November 1999. Then on about 14th January 2000 the management office made the first complaint about the colour of the glass window. In short, notwithstanding those particulars, the Respondent's case on pleading has completely missed out the suggestion of any oral approval.

Mrs Mary Hsia

28. On oral evidence, I have heard oral testimony from Miss Mary Hsia of Miagene. In summary, in her statement, apart from saying that there was no objection from FPD as to the use of clear glass until after work was completed, she said that only on about 21st January 2000 had FPD requested Miagene to send over a sample of the glass pane of the new windows. Such request was complied with on 24th January 2000. In her statement she also said that it was the trade custom that before any renovation is carried out, the management office would issue guidelines regulating the renovation works. She then said in her evidence in chief that there had been two occasions during which oral approval was given. She then retracted in cross-examination that she had no personal knowledge of such oral approval as the communication was between Wendy Ho and FPD. In respect of lack of approval in writing she said Mr. Beesley was a busy man and could not be contacted easily.

29. Mrs Hsia has impressed me as an intelligent professional and business woman. She is not the kind of person who would merely rely upon her subordinate (one Miss Wendy Ho) or mere verbal approval as confirmation to go ahead with the work in question. I find two features of her evidence particularly striking, having regard to her demeanour when giving evidence:-

(a) Firstly, Mrs. Hsia said on the one hand that most of the time she did not deal personally with FPD while on the other hand she made various assertions of facts in her witness statement. In cross- examination she had to admit that she did not have any personal knowledge of those matters.

(b) Secondly, notwithstanding she said she had relied upon verbal approval from Mr. Siu before she went ahead with the works, such verbal approval was distinctly absent in her statement. This can be contrasted with her various requests in her letters to FPD for written confirmation which shows how careful she had been in treating matters of this kind. I do not believe she would treat lack of written approval as a trivial matter.

Miss Wendy Ho

30. Mrs. Hsia's subordinate, Wendy Ho, also gave evidence. In paragraph 5 of her statement she used the word "fabrication" which gave the impression that Mr. Siu had acknowledged that the window works could go ahead. When requested during the course of evidence to repeat the exact words said in Chinese, she gave an even stronger impression that there had been oral approval. From her demeanour I can only accept she has been exaggerating her case. If indeed oral approval had been given this could not possibly have escaped the attention of the legal adviser in both the Notice of Opposition and Mrs. Hsia's statement.

31. I note that Miss Ho accepted that at the time it was necessary to hurry with the work. This is a particular striking aspect which matched with Mrs. Hsia's suggestion, out of the blue during cross-examination, that Mr. Beesley was busy and could not be contacted easily.

Mr. David Siu

32. Mr. David Siu of the Applicant gave evidence and had been very carefully cross-examined. There are apparently a number of discrepancies in his evidence. He frankly admitted mistakes in certain parts of his statement and I do not find there is any criticism on him except his memory has sometimes been less accurate. An example is that it should be Mr. Alex Li instead of Mr. Lotto Wong who was working in the estate in November 1999. Mr. Chan on behalf of the Respondent has helpfully set out other features which the Respondent says are not satisfactory. However, having considered those features, I certainly do not find Mr. Siu a dishonest witness as suggested by the Respondent, though of course he knew he was giving evidence for his employer and he might be held partly responsible for the delay in making complaints against the use of clear window glass. His employment may be at stake. There might also be certain instances during cross examination which tended to show that he had been defensive because accusations had been made that, at its lowest, he was not acting promptly in response to the letters of Miagene. At the end of the day I am satisfied that his version of facts, in particular, that of his repeated requests for sample of window glass notwithstanding the lack of anything in writing is more preferable to that of Miss Hsia and Wendy Ho. Mr. Siu was clear that although approval for other aspects of the work, like erection of scaffolding, might have been given, there was never any approval for the use of clear glass.

33. I therefore prefer Mr. Siu's version of facts in so far as it is inconsistent with Mrs. Hsia and Wendy Ho. In particular I find that Mr. Siu, through both himself and his assistant Ms Catrina Wong, had advised Ms Hsia that before proceeding with any work a glass sample would have to be provided by the Respondent. He had also repeated his instructions to Ms Wong to ring up the Respondent for such sample. He first knew of the use of clear glass from his staff and he took up the responsibility of reporting to his supervisor, Mr. Stephen Beesley.

Mr. Stephen Beesley

34. Mr. Stephen Beesley, the senior property manager, had given evidence. It may be said that he has shown himself quick tempered and perhaps arrogant. However, I do not find that he was evasive or dishonest. In fact I find him professional and pragmatic. It may be said he could have acted more expeditiously in handling the incident but he could not be said to be dishonest. An important aspect here is that it was suggested to him that he was acting inconsistently or differently in allowing oral approval be given in a latter matter in March 2000. Mr. Beesley had no hesitation to suggest that it was only practical to give approval because at that time there was an urgent need due to possible weather change.

35. This latter incident in my view is an isolated incident and had been properly explained by Mr. Beesley. No suggestion was made that he was not telling the truth. This incident therefore carries little weight in my consideration of whether there was oral approval or indeed approval by conduct.

Mr. Wong Kam Chuen ("Mr. Lotto Wong"), Miss Chau Kam Ho and Miss Elizabeth Jane Leung

36. This is an aspect of evidence which I have to mention. The Applicant had taken a hearsay notice in respect of a witness statement of a Mr. Wong Kam Chuen or Mr. Lotto Wong. This was withdrawn at the trial. In contrast, the Respondent had advanced two further witness statements at trial, namely, that of Miss Chau Kam Ho ("Miss Chau") and Miss Elizabeth Jane Leung ("Miss Leung"), partly intended to contradict Mr. Lotto Wong's evidence.

37. I do not find either Miss Chau's or Miss Leung's evidence of great assistance, even assuming I accept them in total.

38. First of all Miss Chau was responsible for arranging insurance for the renovation. She had no personal knowledge of what was happening on site. Her evidence about conversations is equivocal.

39. Secondly, Miss Leung's evidence tends to show Mr. Siu's evidence that Mr. Lotto Wong told him that clear glass had been used was incorrect because Mr. Lotto Wong was not in Park Place sometime prior to December. I think she is an honest witness. However, since I have ruled that Mr. Siu had made a genuine mistake Miss Leung's evidence is of little if any value.

The Documents

40. I have also considered and tested both the Applicant's and the Respondent's case against the contemporary documents.

41. The quotation dated 14 October 1999 from the Respondent's supplier (one Midi Aluminium Fabricator Limited) expressly stated 30 days were required for delivery and installation of the windows. The plans had already been drawn up by that time. The matter was delayed because the insurance policy would have to be extended.

42. Then by fax letter dated 21 October 1999 Miagene sought approval for change of windows. This letter contained 7 pages. The first page says that the "new windows will have the same design as the existing ones to keep the exterior of the building uniform in looks". We enclose herewith the new window schedule and specifications for your reference." At page 3 of the fax message, it was stated that "... f) Types of glass used for all windows are described in attached B.Q." That letter did not contain the "B.Q." or the price list which would reveal clearly clear glass would be used. The reference to clear glass on the drawing did not however escape the attention of Mr. Siu but this seemed to have caused him some confusion. He said he had asked for samples and I have no reason to doubt that.

43. The contract for supply of the materials was then signed by the supplier on 29 October 1999 and subsequently by Mrs. Hsia on behalf of one Miagene Interior Limited on 1 November 1999. There was little time left. Wendy Ho in evidence admitted frankly it was a hurried situation although she did not refer to the need to hurry up with the work whether or not written approval was forthcoming. It should be remembered that as early as in September 1999 decoration work was considered by the Respondent. By the time of the signing of the supplier's contract, just under 30 days were left for the delivery and installation of the windows. It is clear that by this time there was little time for the Respondent to change glass if indeed FPD refused to approve the use of the clear glass. This is consistent with the fact that Miagene did not wait but had chosen to go ahead with the work notwithstanding the lack of written approval.

44. On the other hand, it is true that as a matter of correspondence, the Applicant had referred only to the insurance policy. However, this does not contradict the Applicant's request for glass sample. The letter dated 21 October 1999 from the Respondent certainly was that the Respondent was well aware of the need for written approval. Both parties had engaged professional people, and the Applicant had no reason to doubt the Respondent would not comply with their request for glass sample and indeed the need for written approval.

Summary of findings

45. In summary I hold that it was apparent that the Respondent were keen to complete installation of the clear glass. The clear glass had been selected well before application for permission was made. Glass samples were requested but there was little time left when the contract for supply was signed, and the Respondent proceeded to installation without waiting for written approval. There was no sample of clear glass provided until about 24 January 2000 and after the work was completed. No approval, whether oral, written or by conduct was given to the use of clear glass.

Implied approval

46. I find that the facts and circumstances of the present case do not support any implied approval or approval by conduct. In my view, the lack of objection may be a factor to be taken into account but this by itself and in the circumstances of the present case is clearly insufficient. This is not a case where triffling changes had been made to the Property.

47. I do not think the subsequent lack of approval for water proofing work in March 2000 of great moment. In particular, Mrs. Hsia was careful enough on that occasion to write a letter saying that approval had been given. I accept Mr. Beesley's evidence that there was an urgent situation because of the anticipated weather changes.

48. I have no submission before me on whether the application for use of clear glass window should not have been unreasonable withheld, and I do not have to decide on this matter. In my view, in the present case, the Respondent may well wish to enjoy the use of clear glass windows but it had just gone out of its way and took an unwarranted risk to proceed with the work without waiting for written approval.

Acquiescence

49. Two conditions have to be satisfied for a defence of acquiescence is to succeed:

(a) first, there must be on the part of the plaintiff an assent or lying by in relation to the acts of another person ;

(b) second, in view of that assent or lying by and consequent acts it must be unjust in all the circumstances to grant the specific relief that is in question.

See The Incorporated Owners of Tuen Mun Hung Cheung Industrial Center (Phase I) v. United Hong Kong Limited per Cheung J. (as he then was) (unreported) HCMP 2991 of 1998, 11 November 1999, approving Spry on "The Principles of Equitable Remedies" 5th Ed. p. 440.

50. I have found there having no express or implied approval from the Applicant. Likewise I also find that there was no assent or lying by on the part of the Applicant. The request for glass sample by Mr. Siu is contrary to any suggestion of lying by.

51. That would be sufficient to dispose of the action. However, I should add that even if there has been a short period of lying by on the part of the Applicant, since the Respondent having full knowledge of the need to get written approval had rushed to the conclusion of the work, I do not see any injustice in refusing the acquiescence defence.

Mandatory Injunction

52. As I have concluded that there has been a breach of the DMC, it remains for the Respondent to justify why it is not fair or equitable for a suitable injunction order be granted. I have no sufficient evidence to show that it would be unfair or inequitable to grant an injunction, for example it would be arbitrary to restrain this owner and I will therefore grant the injunction order below and give leave to parties to apply for variation if the situation justifies such cause.

Conclusion

53. I therefore would give judgment in favour of the Applicant in the following terms:-

(a) The Respondent do within 28 days remove the clear glass windows as identified in the photographs shown in Schedule 2 to the Application dated 27 October 2000, and replace it with tinted glass windows to be approved in writing by the Applicant, such tinted glass should include any type of tinted glass that had been approved for use by the residents of the Building or any reasonable substitute, and such approval should not be unreasonably withheld and should be given within 14 days of the Respondent's submission of sample glass for approval.

(b) The Respondent do pay the costs of the Applicant to be taxed if not agreed, with a certificate for counsel, such order to be made absolute unless within 14 days either party applies.

(c) Liberty to either parties apply to vary the terms of paragraph (a).

54. Since the Applicant is requesting for relief amounting to a mandatory injunction, the terms of the order should be more specific not only that the Respondent can determine with reasonable certainty whether or not he has sufficiently complied with its terms, but also to prevent undue hardship caused to the Respondent. I do hope that as a result of the terms of the order I now make, parties can come to terms as to the type of glass windows to be replaced.

55. The Applicant also sought damages for breach of the DMC but did not adduce any evidence. I do not order any damages.

56. I would like to thank counsel for their assistance to this Tribunal. I also thank parties for their preparation and efforts which made the time for the hearing to fall within the original estimate, notwithstanding two new witnesses had been called and further documents produced.