THE INCORPORATED OWNERS OF YUE SUN MANSION v. LAKE SIDE ELDERLY CENTRE LTD

HCMP 556/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 556OF 2017

(ON AN INTENDED APPEAL FROM LDBM NO 26 of 2015)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  Having considered the submissions of counsel and the correspondence between the parties since the hearing of 20 April 2017, subject to what we shall say below, we consider it is reasonably arguable that the provision in the Government Lease does not prohibit the operation of an Elderly and/or Disability Home and that the tribunal’s exercise of discretion in granting the injunction was tainted by its view on such provision.

2.  The reservation we had, as elaborated at the hearing, was that the position of the Respondent in the Tribunal was that they had the right to use the lift and access to its premises by lift should be restored.  On that basis, the Tribunal found that there should be a quia timet injunction to forestall nuisance in breach of Clause 10(c) of the Deed of Mutual Covenant.  If the perceived risk of nuisance subsists, we see no basis to interfere with the relief granted by the Tribunal even if we have misgivings regarding its construction of the Government Lease.

3.  The Respondent now indicates that they take a different stance. They offered undertakings to the Incorporated Owners in the letter of 24 April 2017 in these terms:

“ 1) the Respondent shall not by its staff or agents, or otherwise use the lobby and the 3 lifts located at the lobby of Yue Sun Mansion;

2)  the Respondent shall only by its staff or agents, or otherwise use the rear staircase of Yue Sun Mansion as emergency exits only.”

4.  The Respondent also accepts that they should bear all the costs of the legal proceedings in the Tribunal and the application for leave to appeal before us.

5.  As we said at the hearing of 20 April 2017, we are not minded to grant indulgence to the Respondent to allow them to adopt an opposite stance on appeal unless the injustice occasioned by change of stance can be adequately addressed and the grant of such indulgence would not compromise the principle of finality in relation to litigation.  The Court therefore invited the parties to consider if their respective concerns could be addressed by suitable undertakings.  The matter was adjourned to facilitate that process.

6.  Since the adjournment, parties had some negotiations and the Respondent offered the undertakings and costs as indicated above.  However, the Incorporated Owners is not prepared to engage further in the matter as it does not want to incur further time and resources to deal with the substantive appeal. 

7.  Hence, the matter comes back to us for determination.

8.  We are of the view that it is reasonably arguable on the facts of the present case that if the conditions set out below are satisfied the injustice towards the Incorporated Owners occasioned by the Respondent’s change of stance could be adequately redressed and the Court should exercise its discretion to entertain the appeal on the limited grounds set out below. The conditions are:

(a) The Respondent shall give an undertaking to the Court (in addition to undertaking to the Incorporated Owners) in terms as per those offered to the Incorporated Owners in the letter of 24 April 2017;

(b) The Respondent shall pay all the costs incurred so far (in the Tribunal as well as before us) and they shall undertake not to seek costs against the Incorporated Owners even if they succeed in the appeal.

9.  The grounds on which we shall grant such conditional leave (with an extension of time for the making of this application) are limited to Grounds 1, 1A and 4 set out in the Amended Grounds of Appeal placed before us.

10.  We can understand the standpoint of the Incorporated Owners.  However, with the removal of the perceived risk of nuisance by the undertakings and costs previously incurred by the Incorporate Owners fairly covered, it seems to us that the Respondent should be given the opportunity to appeal against the construction of the Government Lease by the Tribunal.  It is up to the Incorporated Owners to decide what role it shall play in the intended appeal.  Even if it does not take active part in the appeal, the Respondent would still have to persuade the Court that it is appropriate to reverse the judgment of the Tribunal in the appeal.

11.  We therefore direct the Respondent to confirm in writing within 5 days that they would accept these conditions.  If they do, then they shall have leave to serve and file a Notice of Appeal confining to the limited grounds within 7 days of the confirmation.  Otherwise, the application for leave shall be dismissed.