THE INCORPORATED OWNERS OF DUKE GARDEN v. FREE POINT TECHNOLOGY LTD

DCCJ 3923/2016

[2019] HKDC 846

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3923 OF 2016

--------------------

--------------------

-------------------

JUDGMENT

-------------------

I. BACKGROUND

1.  The plaintiff is the owners’ incorporation of Duke Garden, situated at 2 Duke Street, Kowloon, Hong Kong (“Duke Garden”).  It was registered on 18 June 1972, pursuant to the Deed of Mutual Covenant dated 27 January 1964 registered in the Land Registry by Memorial No UB425836 (the “DMC”), under the Multi-storey Buildings (Owners Incorporation) Ordinance 1970 (“MBOIO”), the predecessor of the Building Management Ordinance (Cap 344) (“BMO”).

2.  Duke Garden has four blocks, ie Blocks A to D.  Each register owner of Block A and B units owns also a designated parking space in the covered garage (the “Covered Parking Spaces”, and each a “Covered Parking Space”).  Registered owners of units in Blocks C and D, on the other hand, can apply for and be allocated a parking space in the outdoor parking area (the “R Parking Spaces”, and each a “R Parking Space”).

3.  By an assignment dated 24 June 1996 (the “Assignment”), the defendant became the registered owner of Flat D on Floor 12 of Duke Garden (“Flat 12D”).  Ms Choi Yuen Chu (“Ms Choi”), the sole director of the defendant who has since then occupied Flat 12D, has also been using the R Parking Space marked as R18 (the “R18 Space”) under a licence (the “Licence”).  A monthly fee of HK$1,000 has been paid by the defendant to the plaintiff for the use of the R18 Space.  Ms Choi used to own a Lexus car until she switched to a Porsche SUV in early 2016. Ms Choi had since parked her SUV with registered number TX2261 (the “Vehicle”) at the R18 Space.

4.  The R18 Space is situated near the entrance to the car park facing Duke Street (the “Duke Street Entrance”).  Adjacent to the wall on the right of the Duke Street Entrance is a toilet and kitchen which was built for the security guards’ use (the “Toilet”).  The R18 Space is next to the Toilet.  Adjoining the R18 Space is the R Parking Space marked R19 (the “R19 Space”) which has been used by Mr Man Tak-lam (“Mr Man”) and his son since around 2003.  A layout plan of the Duke Garden car park is annexed to this judgment.

5.  The current dispute arose out of the defendant’s use of the R18 Space (through Ms Choi).  The plaintiff alleged that the defendant’s manner of parking has caused inconvenience and obstruction to other car park users and hence the Licence has been revoked.  The plaintiff commenced the present action seeking various reliefs, including an injunction to compel the defendant to deliver vacant possession of the R18 Space.  The defendant denies that the plaintiff was entitled to revoke the Licence and counterclaims against the plaintiff, complaining of selective enforcement of, inter alia, the DMC.

II.   THE PLAINTIFF’S CASE

6.  The plaintiff’s case is that the R Parking Spaces were created by a resolution of the owners’ committee validly passed in 1973 (the “1973 Resolution”).  On the basis of the 1973 Resolution, a scheme was developed to allocate and grant licence for use of the R Parking Spaces which had since been controlled, managed and administered by the plaintiff.

7.  Under the said scheme, rights of owners of units in Duke Garden (including the defendant) to use the R Parking Spaces derive from contractual licences such as the Licence.  The plaintiff says that the Licence has always been revocable by the plaintiff under specific circumstances and in particular, in cases of breach of its terms.

8.  The plaintiff says that the Licence was subjected to the implied terms.  As pleaded in paragraph 7 of the Amended Statement of Claim (the “Implied Terms”):-

“7. [T]here are implied terms in the Licence that at all time the defendant was to use the R18 Space in a manner that would not:

(a) Obstruct the common area including but not limited to the entrance to Duke Garden;

(b) Encroach the adjoining parking space; and

(c) Cause any obstruction and inconvenience to other owners and residents of Duke Garden.”

9.  It is the plaintiff’s case that between April 2016 and June 2016, the plaintiff received numerous complaints against the manner in which the Ms Choi had parked the Vehicle at the R18 Space.  For the reasons set out in paragraph 8 of the Amended Statement of Claim, it was said that the defendant had caused obstruction and inconvenience to the other owners of Duke Garden and was in breach of the Implied Terms:-

“(a) the Vehicle was persistently parked beyond the yellow lines which delineated the R18 Space;

(b) the Vehicle has blocked the pathway to the entrance to Duke Garden thereby obstructed the other vehicles entering and/or exiting the Parking Area;

(c) the Vehicle was parked too close to the gate of the entrance of Duke Garden through which the other vehicles drive into or out of Duke Garden and thereby causing higher risks of collision;

(d) the Vehicle protruded into the adjoining parking space marked R19 (the “R19 Space”) and thereby interfered with the enjoyment of the R19 Space by the licensee thereof.”

10.  In addition to breach of the Implied Terms, the plaintiff also complains that the defendant’s manner of parking constituted a breach of Clause 2 and/or Clause 6(e) of the DMC, which provides inter alia that:-

(a)  Clause 2: Each of the parties hereto shall have the right in common with the others of the parties hereto and all others having the like right to use for the purpose of access to and egress from the flat so granted to each of them the common right of way and the entrance halls lifts staircase and landings of and in the said buildings and each of the passages therein as are not included in any of the flats of the said buildings.

(b)  Clause 6(e): Each party hereto covenants not to do anything in the said buildings causing any danger nuisance or annoyance to the occupiers of the said buildings or any of them.

11.  In late April 2016, with the approval of the plaintiff, Mr Man erected two traffic pillars (the “Traffic Pillars”) within the boundary of the R19 Space.  The plaintiff said that the Traffic Pillars were required to be erected as a result of the defendant’s manner of parking which has caused the Vehicle to persistently encroached onto the R19 Space.

12.  Two warning letters dated 13 June 2016 and 8 July 2016 respectively were issued to the defendant on behalf of the plaintiff.  The first by Mr Chan Chi Shing (“Mr Chan”), the plaintiff’s Chairman, and the second by the plaintiff’s solicitors.  In the second letter, the plaintiff notified the defendant that the Licence would be revoked if her breach of the Implied Terms persisted.

13.  The plaintiff’s case is that as the manner of the defendant’s parking had not improved despite the repeated warnings given, on 14 July 2016, the plaintiff resolved at the management committee’s meeting that the Licence should be revoked as of 1 August 2016 (the “Revocation”).

14.  By a letter dated 22 July 2016 from the plaintiff’s solicitors, the defendant was notified of the Revocation and was demanded to vacate the R18 Space by 31 July 2016.  The remote control (the “Remote Control”) for the gate at the Duke Street Entrance was also demanded to be returned to the management office by 31 July 2016.

15.  The defendant has refused to comply with the plaintiff’s demands and have continued to park the Vehicle at the R18 Space.

16.  Further, on 3 August 2016, the Traffic Pillars were removed by Ms Choi without prior consent or authorisation from Mr Man.  The Police was involved and Ms Choi was arrested. No charges were eventually pressed.

III.   THE DEFENDANT’S CASE

17.  It was not disputed at trial that the defendant was entitled to use the R18 Space under a licence.  The dispute lies in whether the Licence was revocable.

18.  The defendant disputes the existence and validity of the 1973 Resolution.  Instead, the defendant’s primary case was that the R Parking Spaces were created by an agreement of some sort, at an unknown time, between the plaintiff and the then registered owners of Duke Garden.  On the basis of such an agreement, irrevocable licences for use was granted to the predecessor(s)-in-title of the defendant in its capacity as the owner of Flat 12D.  Such a licence was then transferred to the defendant as part of the Assignment.

19.  Mr Poon, for the defendant, submitted that since the defendant has continued to provided consideration, that is, to give up its right to use the R Parking Spaces as common area, the Licence cannot be revoked.  It was only when the right to use is voluntarily given up or waived by the defendant that the R18 Space could be reallocated.

20.  Further, the defendant submitted that even if the Licence was revocable, it should not have been revoked.  While the defendant did not dispute that the Implied Terms apply, it was submitted that their application should be subjected to reasonableness.

21.  The defendant said that Ms Choi has all along been using the R18 Space without any complaints from other owners from 1996 to 2016, until the erection of the Traffic Pillars in or around April 2016.  The defendant submitted that any breaches of the Implied Terms thereafter was not unreasonable:-

(a)  Even if the Vehicle has occasionally protruded beyond the R18 Space’s boundary, it has not resulted in obstruction of the Duke Street Entrance or the driveway or caused any inconvenience to other owners and residents of Duke Garden.

(b)  Breaches, if any, were caused entirely by the presence of the Traffic Pillars.

22.  The defendant further submitted that the plaintiff was barred from revoking the Licence as a result of proprietary estoppel and/or estoppel by acquiescence.  Upon the plaintiff’s Counsel, Mr Chiu’s request for clarification, Mr Poon specifically informed the court that the defendant was not running a case of “licence coupled with interest or in aid of property”.

23.  The defendant further submitted that injunctive relief should not be granted against the defendant for two reasons:-

(a)  The defendant’s parking manner has improved after the removal of the Traffic Pillars rendering an injunction unnecessary.

(b)  The plaintiff has selectively prosecuted the defendant such that it would be inequitable to grant the injunctive relief sought.

IV.   THE PLAINTIFF’S EVIDENCE

24.  The plaintiff called two witnesses, namely Mr Chan and Mr Man.  Both Mr Chan and Mr Man appeared to be honest witnesses. Both of them tried their best to recall the facts in order to assist the court.  Overall, I find their evidence to be credible.

(A)   Mr Chan’s evidence

25.  Mr Chan was a founding member of the plaintiff and was elected as the Chairman of the plaintiff from 1976 to 2005, and from 2009 to the present.  The passing of the 1973 Resolution was within the personal knowledge of Mr Chan.  Mr Chan gave evidence that in 1973, in order to provide car parking spaces for owners or tenants of Blocks C and D, a resolution was passed to “convert” common parts of Duke Garden into the 22 R Parking Spaces.  Mr Chan confirmed in his oral evidence that he was responsible for the passing of the 1973 Resolution and the said resolution was validly passed.

26.  Mr Chan further gave evidence on the management of the R Parking Spaces.  In particular, he said that the plaintiff has all along been responsible for the allocation and management of the R Parking Spaces since their creation.  All owners of Duke Garden who are eligible may apply for a R Parking Space.  The first allocation was done by ballot and subsequently on a first come first serve basis.  Those who are allocated a space would be permitted to use the designated R Parking Space provided that they pay a “car park management fee” to the plaintiff.  The fee has been HK$1,000 per month.  Such fee is not demanded from users of Covered Parking Spaces.  When an owner moves out of Duke Garden, any permission granted to such owner for the use of R Parking Space(s) would be revoked.  Since 2006, R Parking Spaces users were given a remote control to the gates of Duke Garden.  An owner who is no longer permitted to use his R Parking Space must return the remote control to the plaintiff.

27.  The plaintiff also monitors the manner in which the R Parking Spaces and Covered Parking Space were used.  If a vehicle has been parked in a way which obstructs and/or causes inconvenience or risk of danger to other car park users, the plaintiff may revoke the relevant permission to use after 3 warnings.  The foregoing rules in relation to the allocation and use of the R Parking Spaces are contained in the Carparking Rules and Regulations (the “Rules”) passed by the plaintiff.

28.  Regarding the use of the R18 Space, Mr Chan gave evidence that the plaintiff had received 5 letters from different owners of Duke Garden since 6 April 2016, complaining that the manner in which the Vehicle was parked has caused them inconvenience (the “Complaint Letters”).  In gist, the Complaint Letters stated that the Vehicle was often parked beyond the boundary of the R18 Space, making it difficult for other vehicles to enter and exit the Duke Street Entrance while causing the risk of collision.

29.  The first of the Complaint Letters was sent by Mr Man, the user of the R19 Space (which is right next to the R18 Space), on 18 April 2016.  In that letter, Mr Man sought the plaintiff’s permission to erect the Traffic Pillars for the purpose of demarcating the R18 Space and R19 Space.  The plaintiff granted Mr Man’s request as it was of the view that this would assist the user of the R18 Space ie Ms Choi to park more properly.  The Traffic Pillars were erected since late April 2016.

30.  Since receiving the Complaint Letters, Mr Chan has, on behalf of the plaintiff, observed the way in which the Vehicle was parked and formed the view that the complaints were well-founded.  Mr Chan said that the Vehicle consistently obstructed the driveway and the Duke Street Entrance.  Mr Chan was of the view that the manner of parking was likely a breach of the DMC and/or the Implied Terms.  It is also Mr Chan’s evidence that around half of the vehicles that parked at Duke Garden (including those using the R Parking Spaces and Covered Parking Spaces) would have to use the Duke Street Entrance.

31.  I have considered the various photographs produced by the parties.  I have noted that many photos exhibited are undated, although the presence (and absence) of the Traffic Pillars may act as an indicator of the period in which the photo was taken ie before or after late April.  Further, the perspective from which some of the photos were taken and their resolution are far from satisfactory.  I have taken all these matters into account when evaluating the evidence and have place weight on such evidence accordingly.

32.  Mr Chan went on to say that as the manner of parking has not improved after the erection of the Traffic Pillars, he, on behalf of the plaintiff, issued a warning letter to the defendant on 13 June 2016.  The plaintiff demanded the defendant to park within the R18 Space’s boundary.  The Complaint Letters were attached for the defendant’s reference.

33.  Unfortunately, the defendant’s use of the R18 Space did not improve.  On 23 June 2016, the management committee of the plaintiff resolved to engage lawyers to assist on the matter.  A second warning letter was issued by the plaintiff’s solicitors to the defendant on 8 July 2016.  The defendant was specifically warned that if the manner of parking was not improved, the plaintiff would revoke its right to use the R18 Space ie the Licence.

34.  On 14 July 2016, the management committee resolved to revoke the Licence.  The plaintiff’s solicitors wrote to the defendant on 22 July 2016, notifying the defendant that its right to use the R18 Space would terminate on 1 August 2016, and that the defendant was required to vacate the R18 Space and return the Remote Control to the management office.  The plaintiff’s solicitors issued another similar letter to the defendant on 1 August 2016.

35.  While the defendant has refused to vacate the R18 Space, Mr Chan gave evidence that the plaintiff had since August 2016 refused to accept the monthly management fees from the defendant.

36.  Some correspondence between the plaintiff and the defendant, from August 2016 to early 2017, has been referred to and relied on by the parties.  However, I do not find these letters to be of much assistance.  I will not go into the details of these letters. Suffice to say that in these correspondence, Ms Choi has admitted to parking improperly, albeit casting the blame on the presence of the Traffic Pillars.

37.  In relation to the general approach of the plaintiff in handling improper use of parking spaces, Mr Chan said that while other vehicles would from time to time park beyond their designated space, those vehicles did not persistently obstruct the public driveway or the entrances, or cause inconvenience to other users of the car park.  In particular, once warning has been given, the relevant car park user would cooperate and improve their manner of parking.  In contrast, Ms Choi’s attitude had been uncooperative. It was as a result of the persistent improper parking of Ms Choi that left the plaintiff with no choice but to revoke the Licence.

38.  As to the defendant’s counterclaim, and in particular the allegations made in respect of the illegal structures found on the Covered Parking Space marked number 12 (“No 12”), Mr Chan admitted that he has been renting and using No 12.  Mr Chan further gave evidence that he has on 20 November 2017 reported the matter to the Housing Department.  The Housing Department, by letter dated 7 December 2017, recommended the removal of the fence of part of No 12.  By letter dated 3 October 2018, upon an on-site inspection by staff, the Housing Department stated that as the structures found on No 12 does not involve altering of the building structure, does not block any fire exit route and there being no apparent danger, the Housing Department will not take further action.

(B)   Mr Man’s evidence

39.  Mr Man, the user of the R19 Space and a member of the management committee since around 2008 or 2009, also gave evidence at trial.  Overall, Mr Man’s evidence as to the defendant’s improper use of the R18 Space and the way in which the Licence was eventually revoked by the plaintiff was consistent with the account given by Mr Chan.

40.  Mr Man said that the improper and obstructive parking began in early 2016 when Ms Choi switched to the Vehicle which is of a larger size than her previous vehicle.  Mr Man said that the Vehicle was constantly parked beyond the R18 Space’s boundary, sometimes occupying part of the R19 Space.  This has caused inconvenience to Mr Man.  In particular, it has caused him difficulties when opening the left car doors of Mr Man’s vehicle and when Mr Man’s maid was trying to clean the left side of his car.  Mr Man was hence forced to park his own vehicle also outside the R19 Space’s boundary.

41.  As a result, Mr Man wrote to the plaintiff requesting for permission to erect the Traffic Pillars.  Mr Man purchased the Traffic Pillars once permission was granted.  The Traffic Pillars were erected within the R19 Space with their plastic base touching part of the yellow line delineating the R18 Space and R19 Space.  While Ms Choi had protested by placing posters on her Vehicle’s windscreen, it was Mr Man’s evidence that Ms Choi never directly asked him to remove the Traffic Pillars.

42.  Subsequently, there were two unhappy incidents in June and July 2016 involving Ms Choi and Mr Man where the Traffic Pillars were removed and the Police was called.  I do not find those incidents to be material to the issues in dispute.  Suffice to say that since the erection of the Traffic Pillars, the relationship between Mr Man and Ms Choi had been hostile.

43.  Mr Man complained that the manner of Ms Choi’s parking has been persistently obstructive.  The situation was not improved even after Ms Choi has removed the Traffic Pillars.  Hence, Mr Man wrote a second complaint letter to the plaintiff on 27 July 2017.

44.  In late October 2017, as some R Parking Spaces have been vacated, Mr Man requested for and was allocated a new R Parking Space marked R7.  Since then, Mr Man was no longer required to use the Duke Street Entrance.

V.   THE DEFENDANT’S EVIDENCE

45.  Ms Choi, the sole director of the defendant and the user of the R18 Space, was the only witness called by the defendant.  I have noted that Ms Choi may be said to be at times evasive during cross-examination, and that inaccurate statements might have been given to bolster the defendants case.  That being said, however, I find that Ms Choi was just trying her best to recall the facts from her perspective, and had the intention of assisting the court to resolve the present dispute.  In any event, on the core issues of whether Ms Choi has parked the Vehicle improperly and whether the defendant has breached the Implied Terms and/or the DMC, I will primarily rely on the objective evidence (such as photos), rather than the oral evidence of the witnesses.

46.  In her witness statement, Ms Choi stated that, before she purchased Flat 12D, she was informed by the predecessor of Flat 12D, Ms Chan Yuk Lin (“Ms Chan”), and the estate agent, that as a result of the lack of parking spaces available to owners of units in Blocks C and D, 22 extra parking spaces were marked in the common area for those owners’ use.  It was said that the owners sacrificed their right to use the common area for extra parking space.  Ms Choi was further told that the plaintiff has never taken enforcement actions against Ms Chan and have allowed her to park her vehicle at the R18 Space without interference.

47.  At trial, Ms Choi further alleged that one former Chairman of the plaintiff told her the same after she moved into Duke Garden.  Few particulars were provided by Ms Choi save that the “former Chairman” was a man and the said conversation took place after she has moved into Duke Garden (collectively, as the “Conversations”).

48.  On the basis of these oral representations, Ms Choi gave evidence that her understanding was that the R18 Space was bought with Flat 12D and that the R18 Space has already been assigned to her.  Ms Choi further said it was her understanding that she would be allowed to use the R18 Space as long as she remains to be an owner of Flat 12D, and it was on the basis of this understanding she caused the defendant to purchase Flat 12D.

49.  Ms Choi’s understanding is however inconsistent with the fact that any owners who wished to be allocated a R Parking Space must apply to the plaintiff and would be required to pay the plaintiff a fee of HK$1,000 monthly for use.  While Ms Choi was at pain to emphasise that such fee is merely a subsidy for the costs of running the R Parking Spaces, it was clear that such “subsidy” was not payable by the users of the Covered Parking Spaces.  Such evidence is consistent with the plaintiff’s case that monthly payment of HK$1,000 is required for the use of the R Parking Spaces.  Ms Choi also fairly accepted that the Remote Control was passed to her by the plaintiff.

50.  In relation to the defendant’s use of the R18 Space, Ms Choi’s evidence was that she had been using the R18 Space since she moved into Flat 12D.  It was said that the R19 Space has previously been used by Mr Man’s son.  It was only when Mr Man’s son moved out of Duke Garden in about January 2016 that Mr Man started to use the R19 Space to park his MiniCooper.  Ms Choi further said that prior to her disputes with Mr Man, she had never received any complaints in relation to her use of the R18 Space.

51.  Regarding the erection of the Traffic Pillars, Ms Choi denied that they were necessitated by her improper parking.  Instead, she said that the Traffic Pillars were erected “out of a sudden” and suspected that Mr Man has done so out of his personal vendetta against her.  Ms Choi elaborated on some incidents occurred in 2011 to support her case.  In gist, Ms Choi at a management committee’s meeting made a complaint regarding an issue of water leakage and demanded repair by the plaintiff.  When her request was opposed by Mr Man, she told the other owners at the meeting that Mr Man had previously demanded a huge compensation from the contractors for some paint drops left on his vehicle.  It is the defendant’s case that ever since, Mr Man had been hostile towards Ms Choi.

52.  Ms Choi gave evidence that the presence of the Traffic Pillars has greatly hindered her use of the R18 Space.  Ms Choi said that with the Traffic Pillars erected, it was not possible for the Vehicle to be parked properly inside the R18 Space and must protrude slightly with the Vehicle’s front sticking out.  When asked whether it was possible for her to park her Vehicle slightly to the right (ie closer to the Toilet), Ms Choi said that it would not be feasible as she would not be able to get out of her car through the right driver’s door.  The route to the Toilet entrance would have been blocked as well.

53.  It was also Ms Choi’s evidence that despite the Vehicle might have sometimes parked beyond the R18 Space, it was entirely caused by the presence of the Traffic Pillars.  In any event, Ms Choi opined that the Duke Street Entrance and the car park driveways are of sufficiently width such that, even if the Vehicle protruded outside the R18 Space, it did not block the Duke Street Entrance nor obstruct the driveway, as there was still a “huge” space for even large vehicles to pass through.

54.  The defendant specifically denied that her use of the R18 Space created risk of collision or has in any way caused inconvenience to other car park users.

55.  Ms Choi also gave evidence as to her placing of banners on the Vehicle’s windscreen, the incidents which occurred in June and July 2016 between Mr Man and herself and the eventual removal of the Traffic Pillars on or about 3 August 2016.  I do not find these matters to be material to the issues to be determined and hence will not elaborate on them further.

56.  In relation the defendant’s case on selective prosecution, Ms Choi said that despite other car park users have always parked their vehicles beyond the boundaries of their respective parking space, the plaintiff has targeted her and taken legal action against her only.  Ms Choi further pointed to the improper use of the Covered Parking Spaces, including No 12 (which has been used by Mr Chan).  Her evidence was that structures have been erected, and personal chattels including furniture are occupying these parking spaces in breach of the DMC and/or the Implied Terms.

VI.   ANALYSIS

(A)   Creation of the R Parking Spaces

57.  The circumstances under which the R Parking Spaces were created has been the subject of some disputes.  As the matter relates closely to the question of whether the licences granted for the use of the R Parking Spaces are revocable, it will be first discussed and determined.

58.  The plaintiff’s case is that the 1973 Resolution enabled common parts of Duke Garden to be used as the R Parking Spaces.  Mr Chiu for the plaintiff has confirmed that after the 1973 Resolution was passed, the relevant area demarcated as R Parking Spaces remained as common area subject to licences granted pursuant to the 1973 Resolution.  During the plaintiff’s opening submissions, I have raised the issues of whether it was within the plaintiff’s power to designate common areas of Duke Garden as the R Parking Spaces, and if so, whether the 1973 Resolution was validly passed.

59.  In response, Mr Chiu drew my attention to section 14 of the MBOIO (which is consistent with section 34(I) of the BMO) in its closing submissions which provides that:-

“subject to this Ordinance, at a meeting of a corporation any resolution may be passed with respect to control, management and administration of the common parts and any such resolution shall be binding on the management committee and all the owners.”

60.  It was submitted by the plaintiff that the said section provided the legal basis for “converting” common parts into the R Parking Spaces by a resolution passed by the plaintiff, such as the 1973 Resolution.  It was further submitted that the 1973 Resolution is binding on the management committee and all owners, including the defendant.

61.  The defendant disputes the existence and validity of the 1973 Resolution.  In particular, emphasis was placed on the fact that the plaintiff has failed to provide documentary evidence in support.  The defendant also questions whether the proper procedural steps, such as the giving of notice, have been complied with.

62.  The plaintiff (through Mr Chan) informed the court that the 1973 Resolution has been lost.  While the plaintiff may be expected to keep proper records of resolutions passed, it is understandable that some documents could be hard to retrieve when a long time has lapsed.  As referred to above, I find Mr Chan to be an honest and credible witness whose testimony remains unshaken by the defendant’s cross-examination.  The passing of the 1973 Resolution is within Mr Chan’s personal knowledge.  I accept Mr Chan’s evidence and am satisfied that the 1973 Resolution has been validly passed which has the effect of designating common parts of Duke Garden as the R Parking Spaces.

63.  On the other hand, the defendant submitted that the R Parking Spaces were created by an agreement of some sort, at an unknown time, between the plaintiff and the then registered owners of Duke Garden that the owners agreed to give up their rights to use the outdoor common area.

64.  Mr Poon relied on Ms Choi’s testimony and in particular, the Conversations to support the defendant’s case.  When asked to particularise when such arrangement was made and who was involved, Mr Poon simply told the court that these matters are not known to the defendant.

65.  The plaintiff contests the defendant’s reliance on Ms Choi’s conversation with the “former Chairman” and submitted that such conversation had not in fact took place.  The plaintiff also protests that the alleged conversation has not been properly pleaded. For the reasons below, leaving the pleading point aside, even if I was to take the alleged conversation with the former chairman into consideration, I would not have reached a different conclusion.

66.  The plaintiff relies on the various inaccuracies in Ms Choi’s evidence. In particular, Mr Chiu pointed out that the former Chairman was a female instead of male.  I do not find this contention to be supported by the evidence.  While it is true that the Chairman stated on the application for registration of owners as a corporation dated 31 May 1972 is one “Lee Yin Lan”, the name itself cannot be conclusive evidence of this former Chairman’s gender. Furthermore, there is no evidence showing whether there were other persons that took up the office as the plaintiff’s Chairman during the period between 1972 (ie the incorporation of the plaintiff) and 1976 (ie when Mr Chan became Chairman of the plaintiff).  Moreover, in around 1996 (when the defendant purchased Flat 12D), Mr Chan was the Chairman of the plaintiff.

67.  While Ms Choi’s recollection or understanding may not be entirely accurate, it does not necessarily mean that the alleged conversation was entirely fabricated.  That said, I do not find the said conversation to be of much assistance to the defendant’s case in terms of challenging the existence of the 1973 Resolution.  Even if I accept Ms Choi’s evidence, the said conversation is nothing more than a casual exchange between laymen where no proper legal terminology was employed. Indeed, the arrangement as described in the Conversations was to a large extent consistent with the plaintiff’s case based on the 1973 Resolution.  In fact, if one is asked to explain, in general terms, to a layman how the R Parking Spaces were created, the explanation will by and large be in similar terms as the Conversations.

68.  Overall, I do not find Ms Choi’s evidence (in particular her reliance on the Conversations) in any way undermines the plaintiff’s case in relation to the 1973 Resolution and Mr Chan’s evidence.  To conclude on this issue, I find that the R Parking Spaces, including the R18 Space, are subject to the scheme implemented by the 1973 Resolution.

(B)   Whether the Licence is capable of being revoked by the plaintiff?

69.  I have already found in the section above that the R Parking Spaces were created under the 1973 Resolution.  I am also satisfied that the plaintiff has since 1973 been managing the R Parking Spaces. Registered owners may apply to the plaintiff for a contractual licence to use a R Parking Space allocated by the plaintiff.  I do not find it necessary to delve any further into the details of the arrangements thereunder.

70.  The defendant submitted that even if I am to find in favour of the plaintiff on the 1973 Resolution, under the scheme, irrevocable licences to use the R Parking Spaces, including the Licence, was granted to the predecessor(s) of the defendant and was transferred to the defendant as a part of the Assignment.  The difficulty in this submission is that it contradicts the general position that contractual licences create only a right in personam, as opposed to right in rem (such that it runs with the land and binds successors in title): Chen Tek Yee v Chan Moon Shing CACV 136/2016 (unreported, 29 February 2016) at §34(1)-(2) per Yuen JA.

71.  The case of Ji Shan International Ltd v Resources Main Enterprises & Anor [1991] 1 HKC 12 cited by the defendant does not assist.  That case concerns the right of a sub-purchaser to ‘step into the shoes’ of the first purchaser in obtaining specific performance of the head contract.  It has nothing to do with whether and in what circumstance could the benefit under a contractual licence, contrary to the orthodox position, be transferred.  The defendant, despite under invitation from the court, did not produce any further authorities to support departing from the general position.

72.  The plaintiff’s case, on the other hand, was that according to the scheme implemented pursuant to the 1973 Resolution, licences would be revoked when the respective licensee ceased to be a registered owner of Duke Garden.  A new licence would be granted to the next owner who is allocated with a R Parking Space.  Each licence would be granted to the respective owner personally and is not transferrable.  The aforesaid contractual scheme is more consistent with the orthodox position.

73.  Further, I find it implausible that the licences granted for the use of the R Parking Spaces are (or have ever intended to be) irrevocable licences. As was accepted by Ms Choi in evidence, there are insufficient R Parking Spaces for every Blocks C and D owner to be allocated a space.  If the licences were irrevocable, it would mean that registered owners who no longer owns a car could still hold on to a R Parking Space and occupy what was originally part of the common area.  The more likely intention would be for the parking space to be returned to the plaintiff for reallocation, as submitted by the plaintiff.

74.  My conclusion is further fortified by the October 2012 version of the Rules.  In particular, Clause 5 and Clause 6 provides that:-

“5. Each registered owner of Block C and D who wishes to sell or let out his or her flat must specify to the purchaser that the flat does not come with a parking space.

6. For each registered owner who is renting parking spaces (whether outdoor or covered parking spaces), the licence to use such rented parking space terminates automatically upon sell or let out of his or her flat.”

75.  Ms Choi maintained that she has no knowledge of the Rules or any version of it.  However, the evidence shows that Ms Choi was present at the plaintiff’s meeting on 22 May 2012 where the meeting resolved to pass the Rules, which was to take effect since 1 July 2012.  Ms Choi was further elected at that meeting to be a member of the plaintiff’s management committee. Further, Ms Choi, as a member of the said committee was again present at a meeting dated 1 November 2012.  In this meeting, the committee resolved to approve the updated version of the Rules which was to take effect in December in the same year.  The meeting minutes also shows that matters in relation to the use of car parking spaces have been discussed.  In particular, it was stated that as the owner of Flat 1C has rented out his apartment, the permission for use of the R Parking Space marked R10 should be revoked and the owner would be required to vacate R10.  This is the same meeting in which Ms Choi demanded the plaintiff to seek compensation from the contractor which in her opinion, caused the water leakage problem in Flat 12D.  When the one-page minutes of the meeting was later circulated by email to the attendees, Ms Choi replied to that email seeking to clarify matters in relation to her seeking of compensation.  It is inherently improbable that Ms Choi was not aware of the Rules and the actions the plaintiff has taken to ensure compliance thereof.

76.  For the reasons above, I find that the Licence, by nature, was a contractual licence governed by the Rules, and that the Licence was revocable either in accordance with its terms, or if the defendant had acted in repudiatory breach of contract.  Whether any of the defences raised by the defendant would render the Licence irrevocable in equity will be dealt with below.

(C)   Whether the defendant has been in breach of the DMC and/or the Implied Terms?

77.  It is common ground between the parties that the Implied Terms form part of the contractual terms of the Licence.  The defendant’s case is that any revocation of the Licence based on the breach of Implied Terms should be subjected to the test of reasonableness, such that not all breaches, however technical and de minimis, should be considered as repudiatory (ie entitling the plaintiff to revoke the Licence).  This does not seem to be controversial.

78.  The defendant submitted that it has not been in breach of the Implied Terms as Ms Choi has all along been parking at the R18 Space properly.  Even if the Vehicle has occasionally protruded beyond the R18 Space’s boundary, it has not resulted in obstruction of the Duke Street Entrance or the driveway, or caused any inconvenience to other owners and residents of Duke Garden.  Furthermore, the defendant submitted that any breaches by the improper parking of Ms Choi was caused entirely by the erection of the Traffic Pillars and should not be considered as unreasonable breaches.

79.  As the defendant has emphasised on the obstruction caused by the presence of the Traffic Pillars and their effect on Ms Choi’s parking, it would be convenient to deal with the manner in which the R18 Space has been used before and after the erection of the Traffic Pillars separately.

80.  Regarding the use of R18 Space prior to the erection of the Traffic Pillars, the plaintiff drew the court’s attention to various photos showing that the Vehicle was parked with its front exceeding the yellow line and/or protruding into the R19 Space.  The plaintiff also relied on Mr Man’s complaint letter dated 18 April 2016.  While the photos are not conclusive evidence to the frequency in which the Vehicle was improperly parked, they do show that the parked Vehicle had at times been parked improperly and had caused inconvenience to Mr Man at least.  In particular, according to Ms Choi’s own evidence, it is possible (prior to the erection of the Traffic Pillars) for her to park the Vehicle entirely within the R18 Space.  It is true that the Vehicle is relatively large in size.  The photos however show that when parked properly, the Vehicle can be fitted within the R18 Space (albeit its wheels might have to touch the yellow boundary lines) with its front exceeding the front boundary just slightly.

81.  Mr Poon for the defendant further submitted that Mr Man had acted “unfairly and oppressively” as the problem could have been avoided if he was to parked slightly towards the left.  I cannot see how Mr Man could be obliged to park towards the left, in particular, when doing so might obstruct the driveway and cause inconvenience to other car park users, such as the user of the Covered Parking Space marked number 14.  It does not lie in the mouth of the defendant that Mr Man should have tolerated the defendant’s protrusion into the R19 Space and made way for the Vehicle.

82.  Overall, I find that the protrusion into the R19 Space by the Vehicle was not reasonable.  The manner in which the Vehicle was being parked had at least at times unreasonably obstructed the driveway and caused inconvenience to other car park users, including but not limited to Mr Man.

83.  As to the use of the R18 Space after the erection of the Traffic Pillars, Ms Choi did admit when she gave evidence that the Vehicle had sometimes protruded beyond the R18 Space.  Ms Choi attempted to convince the court that such parking was not frequent or was not obstructive.  Considering the various photos adduced as evidence and the Complaint Letters, I find it hard to argue that the manner in which the Vehicle was parked was not obstructive.  Indeed, some photos clearly show that the front of the Vehicle protruded so much beyond the R18 Space that vehicles driving in from the Duke Street Entrance would have a real risk of colliding with the Vehicle.

84.  However, I accept the defendant’s submission that if the defendant’s breaches were caused by external factors entirely beyond the defendant’s control, the defendant’s breaches may not be unreasonable.  The dispute lies largely in whether the improper parking was necessitated by the erection of the Traffic Pillars.  However, the defendant’s case seems not to be well supported by evidence.

85.  During cross-examination, Ms Choi accepted that the Traffic Pillars were placed entirely within the R19 Space and that she could still park within the R18 Space despite the presence of the Traffic Pillars.  However, she alleged that in order to avoid contact with the Traffic Pillars, she must park slightly towards the side wall of the Toilet (the “Wall”) and as a result, it would be impossible for her to get out of the Vehicle if it was parked entirely within the R18 Space.

86.  In order to narrow down the disputed issues, the parties conducted a site visit upon the court’s instigation on 11 December 2018.  It was agreed that when the Vehicle is parked within the R18 Space, the distance between the Wall and the outer yellow boundary line would be 22.5 inches, and 26.5 inches when the inner boundary line was considered.  With the Traffic Pillars in place, the parties agreed that there would still be around 19 inches left between the Vehicle door to the Wall.

87.  Nevertheless, Ms Choi insisted that that space was not sufficient for her to get out of the Vehicle after parking.  The plaintiff sought to rely on a photograph taken when the Traffic Pillars were in place and the Vehicle was parked within the R18 Space, and submitted that since the driver’s seat was empty in the photograph, Ms Choi clearly was able to get out of the Vehicle.  I do not find the photograph to be of much assistance as the reflection on the windscreen made it hard to discern whether anyone was sitting at the driver’s seat at the moment when that photo was taken.  However, Ms Choi’s contention is, in my view, indefensible as a matter of common sense. I accept the plaintiff’s submission that 19 inches would be sufficient for a normally build person to leave the Vehicle after it is properly parked within the R18 Space, and would certainly be sufficient for Ms Choi.

88.  Mr Poon, for the defendant, further submitted that Mr Man erected the Traffic Pillars to deliberately cause inconvenience to Ms Choi out of personal vendetta arising from an unrelated incident in or about 2011. I do not find these submissions to be of relevance.  The question to be determined is whether or not the defendant has unreasonably breached the Implied Terms. While the acts of other car park users which affected Ms Choi’s parking might be relevant, the motivation behind their acts has no bearing on the question.

89.  For the above reasons, I find that the Traffic Pillars did not force or cause Ms Choi to park in breach of the Implied Terms.

90.  Overall, I find that the defendant’s breaches of the Implied Terms were not reasonable, such that the plaintiff was entitled to revoke the Licence as from 1 August 2016.

(D)   Proprietary estoppel and estoppel by acquiescence

91.  This aspect of the defendant’s case is pleaded at paragraphs 3(f) to (h) of the Amended Defence and Counterclaim:-

“(f)  The plaintiff had never taken enforcement actions against the predecessor(s) of the defendant in relation to the R18 Space, resulting in acquiescence given to the predecessor(s) of the defendant to use one of the parking spaces and/or the R18 Space (“the Acquiescence”).

(g)  The defendant bought Flat D on 24^th June 1996 with such understanding of the Acquiescence. If the plaintiff is to stop the Acquiescence and disallow the defendant to use one of the parking spaces and/or the R18 Space, it will cause detriment to the defendant.

(h)  The plaintiff is therefore estopped from disallowing the defendant to use the R18 Space.”

92.  The elements required to establish proprietary estoppel and estoppel by acquiescence are trite and not disputed. The burden is on the party relying on the estoppel to establish: (i) a representation; (ii) detrimental reliance on the representation; (iii) and it would be unconscionable for the right-holder to insist on his strict legal rights: CKW Co Ltd v Secretary for Justice HCA 1232/2002 (unreported, 8 March 2005) at §11 per DHCJ To; Mo Ying v Brillex Development Limited [2014] 3 HKLRD 224 at §§144-145 per DHCJ Eugene Fung SC.

93.  The defendant relies on the following “representations”:-

(a)  It was said that the plaintiff had never taken any enforcement actions against the predecessor(s) of the defendant in relation to the R18 Space, “thereby creating acquiescence to the right to use the R18 Space”.

(b)  The Conversations.

94.  Regarding the first alleged representation, it is hard to see what exactly could the plaintiff have acquiesced to, if the defendant’s predecessor(s) used the R18 Space properly under a valid and subsisting contractual licence.  There is no evidence that the plaintiff had decided not to take any enforcement action against the defendant’s predecessor(s) even when there was breach of the contractual license.  Mr Poon, for the defendant, at one point submitted that the representation was to the effect that “the defendant could use one of the parking spaces for so long as it remains to be the owner of Flat D”.  This does not sit well with the fact that the Implied Terms were applicable, as accepted by the defendant.  I do not find it plausible that Ms Choi and/or her predecessor(s) would genuinely believe or expect that breach of the Implied Terms would attract no consequences whatsoever regardless of how appalling the breach was.  This is not a case where specific statements were made to the defendant or that it was treated in any way different than other R Parking Spaces user. In the absence of any specific evidence, it could well be that enforcement actions have never been taken before simply because there had not been any breach by the defendant’s predecessor(s).  This cannot in itself constitute acquiescence nor a representation for establishing proprietary estoppel, or any other form of equitable interest.

95.  The kind of acquiescence relied on by the defendant only comes into play when the defendant started to act in breach.  No representation was made by merely permitting the defendant to use the R18 Space under the Licence without interference when terms of the Licence have not been breached.

96.  The plaintiff’s case was that the defendant started to act in breach in early 2016.  The breaches were first discovered on or around 18 April 2016 by the plaintiff.  The plaintiff has acted promptly in response by verbal warnings and the first formal warning letter was sent on 13 June 2016.  I am not satisfied that the plaintiff has acquiesced the breaches of the defendant.  As such, there could not have been any representation by acquiescence.

97.  Regarding the Conversations, the simple answer is that there is no evidence suggesting that the plaintiff was involved or represented in any of such Conversations.  Whether such Conversations in fact existed and regardless of their contents, they could not constitute a representation binding on, or made on behalf of, the plaintiff.  The Conversations are simply irrelevant to the defendant’s estoppel claim.

98.  There remains another type of acquiescence which might constitute a representation.  Where the incorporated owner has for a long-time tolerated breaches of the DMC by the owners and occupiers, acquiescence might be established.  Other owners may reasonably consider and expect that if they were to commit similar breaches, such breaches would be tolerated.  I accept that the same principle may apply to breaches of the Implied Terms.

99.  In Cheung Yuet & Another v The Incorporated Owners of Oriental Gardens [1979] HKLR 536, the appellants were owners of flats in Oriental Gardens who had extended their sitting rooms and enclosed such extension in breach of the DMC.  Many of the other owners had committed similar breaches by adding slightly less noticeable rooms to their flats.

100.  The Court of Appeal held (at 539) that the incorporated owners had acquiesced in the particular kind of breach and set aside the mandatory injunction granted by the trial judge to demolish the extensions. Huggins JA stated at 539 to 540 that:-

“The fact remains that many of the other owners, including more than a dozen whose flats are in this very façade, had previously extended those flats by the addition of a room. The only difference is that those extensions are on the outer sides of the staircases and most do not project substantially beyond the line of the staircase. However, as breaches of covenant they are no less grave than the breaches committed by the defendants and could reasonably be considered by the defendants as a representation that the addition of a room of equivalent size would be tolerated. That does not mean to say that we are concerned solely, or even primarily, with measurements: we have to consider the whole nature of the breaches committed by the defendants and by the other owners.

…

It does not follow that the owner of the unextended flat on the eighth floor would be at liberty to build out as and where he chose, but merely that he could not be prevented from doing what others have been allowed to do. It is always a matter of degree…”

101.  Cheung Yuet was applied in The Incorporated Owners of Freder Centre v Gringo Limited & Marcello (Tax Free) International Department Store Corporation Limited [2016] 2 HKLRD 190. In that case, for more than 14 years, owners and tenants of Freder Centre have affixed their trade names on part of the external wall in breach of the DMC and the BMO.  The respondents also began to affix their trade names on the external wall.  Some four months later, the incorporated owners demanded the respondents to take down their trade names.

102.  In setting aside the injunctions granted by the trial judge, the Court of Appeal at §§ 28 and 33 held that the incorporated owners had represented or could be taken as represented that affixing of trade name on the external wall would be tolerated:-

“28. In our view, the fact that nearly all the other owners or occupiers of basement and ground floor units have for many years committed similar breaches, and the applicant has never taken any enforcement action or proceedings against them suggests that the breaches are prevalent and have over the years been tolerated by the applicant. This is directly relevant and germane to whether there is assent or lying by on the part of the applicant and whether it is unjust to grant the injunctive relief against the respondent. Equally relevant and important is the fact that the 2^nd respondent has admittedly for some 14 years affixed or exhibited two business signs on other parts of the Building’s external walls, to which the applicant has taken no objection or enforcement action. It should also be borne in mind that on the evidence given by Mr. Tang, the applicant’s witness, the applicant through reports given by Mr. Tang at management meetings must have knowledge of similar breaches committed by the other owners or occupiers or by the 2^nd respondent before November 2012.

…

33.  In our view, the Judge fell into error in disregarding as irrelevant that for a long time there have been similar breaches by the owners or occupiers of the other basement and ground floor units, and the applicant has taken no enforcement proceedings or actions against them. Had this and the fact that the 2^nd respondent has exhibited two other business signs at other parts of the external wall been taken into account, the Judge ought to have found that there has been lying by on the part of the applicant, and that it could reasonable be taken by the respondents as representation that exhibiting or affixing trade name or business sign on the Building’s external wall would be tolerated by the applicant. The Judge ought therefore to have held that, in the circumstances, it would be inequitable to grant the injunctive relief sought by the applicant.”

103.  The real issue to be determined is thus whether the plaintiff has in fact tolerated similar breaches committed by other owners or occupants.

104.  Various photographs have been produced by the defendant to show that many other owners would at least from time to time park beyond the boundaries of their respective parking space.  Mr Chan in his evidence agreed that the Duke Garden’s parking spaces are relatively small and hence the car park users might not be able to park entirely within their designated parking spaces.

105.  Mr Chan also admitted that no action has been taken against these other owners.  The explanation given by Mr Chan for why proceedings were only brought against the defendant was that while these other owners might have parked beyond the boundaries of their designated parking spaces, unlike the defendant, they did not obstruct the driveway or the Duke Street Entrance or cause danger and/or risk of safety to other car park users.  The defendant did not seriously suggest otherwise.  Apart from a passing mention by Ms Choi that others have been obstructive also, the assertion was not properly substantiated by evidence, and the court was not directed to any photos or documentary evidence for that purpose.

106.  I accept that other owners may from time to time park in a way which exceeds their respective R Parking Space.  However, an owner would not without more be in breach of the DMC and/or Implied Terms when their manner of parking does not obstruct the driveway or entrances or cause inconvenience to other owners or occupants.  On the evidence before me, I do not find that the other owners have been in breach of the DMC and/or Implied Terms.  As breach by other owners is not found, Cheung Yuet and Freder do not apply to the present case.

107.  Had I been wrong in concluding that the other owners have not acted in breach of the DMC and/or Implied Terms, applying Cheung Yuet and Freder, I would have found that the breach committed by the defendant differ substantially from those of the other owners as a matter of degree.  Breaches by the defendant are clearly more grievous when taking into account the relative degree of obstruction and inconvenience caused to other car park users.  It could not be said that the defendant’s breaches fall within the same kind of breach as committed by other owners and were tolerated by the plaintiff. I find that the plaintiff had not made any representation to the defendant that its conduct would be tolerated.

108.  On the facts of the present case, I find that the plaintiff has not made any representation to the defendant which could merit a case for estoppel.  As I have found that the defendant has failed to establish the first element for proprietary estoppel and/or estoppel by acquiescence, it is unnecessary for me to find on the issues of detriment and unconscionability.

(E)   Selective prosecution

109.  The defendant further relies on selective prosecution as an independent defence to any breaches of the DMC and/or Implied Terms by the defendant.  At the start of the trial, I have raised my concerns with counsel as to whether this is sound as a matter of law and have invited parties to submit authorities on this point.

110.  The defendant seeks to rely on §33 of Freder (as quoted in full above) and submitted that the Court of Appeal in Freder has held that selective prosecution is not permissible.  This does not seem to me to be accurate.  As discussed above, all §33 said is that, if the incorporated owners have consistently tolerated breaches of a similar nature by other owners or occupiers, such tolerance could amount to a representation that no enforcement actions will be taken against anyone for breaches of such nature.  I have already found that the defendant has failed to establish such representation as required to bar the present enforcement actions brought by the plaintiff.

111.  It seems to me that Freder did not establish an independent prohibition against selective prosecution as a matter of law.  The defendant has not managed to identify any other authorities which lend support to its proposition.

112.  Mr Chiu, for the plaintiff, on the other hand referred the court to the case of Wing Ming Garment Factory Limited v The Incorporate Owners of Wing Ming Industrial Centre and others HCA 8805/1993 (unreported, 20 December 2007) where the defence of selective prosecution has been raised and rejected.  At §§8-10, Reyes J stated that:-

“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.”

113.  By reasons of the above, I am not satisfied that there is an independent defence of selective prosecution.

114.  In any event, as discussed above, the defendant’s breach is of a different degree from those committed by the other owners (if any).  It is doubtful whether selective prosecution could be established on the facts.  However, as I have concluded that selective prosecution does not constitute a defence in law independent form the doctrine of estoppel, I will not go into the details of whether these proceedings have been selectively brought against the defendant.

(F)   Other grounds to resist an injunction

115.  The defendant further submitted that the manner of Ms Choi’s parking has improved after the Revocation and as a result, it would not be just and reasonable for the plaintiff to revoke the Licence and/or it would not be necessary for the injunction sought to be granted against the defendant.  In my view, the submission has confused the basis of the Revocation and the basis on which an injunction is currently sought.

116.  The Revocation was based on the defendant’s breaches of the DMC and/or the Implied Terms.  As I have already found, the defendant was in fact in breach such that the plaintiff was entitled to revoke the Licence.  The Licence has been validly revoked by the plaintiff as of 1 August 2016.  Whether or not Ms Choi has improved her parking or that no further complaints have been received after the Revocation is neither here nor there.  Even if true, these matters are incapable of retrospectively invalidating the Revocation.

117.  Since the Revocation, the plaintiff was entitled to reallocate the R18 Space to another owner or occupier of Duke Garden according to the Rules.  The defendant, on the other hand, no longer has the right to use or occupy the R18 Space but has continued to use and occupy the R18 Space.  The injunctive relief sought to address this violation of the plaintiff’s right, instead of the previous breaches of DMC and/or Implied Term which justified the Revocation.

118.  As the Licence has been validly revoked and at the present, the defendant has no right to use the R18 Space, it could not be said to be inequitable to grant an injunction requiring the defendant to vacate the R18 Space.

VII.   THE DEFENDANT’s COUNTERCLAIM

119.  The defendant counterclaims that the plaintiff has failed to enforce the DMC against other registered owners, who had erected storage structures and placed personal chattels at their parking spaces, in breach of the DMC and the BMO.  The defendant seeks declarations from the court that the plaintiff should enforce the DMC and take action to remove the said structures and chattels.

120.  There was initially some confusion as to whether the defendant’s counterclaim was relevant to the R Parking Spaces or Covered Parking Spaces.  It had since been clarified that the counterclaim is concerned with the Covered Parking Spaces and the pleadings have been amended accordingly.

121.  As discussed above, the Covered Parking Spaces do not belong to the common parts of Duke Garden but are privately owned by owners of Blocks A and B units, thereby subject to the exclusive possession of the respective owners of the Covered Parking Spaces.  The plaintiff was hence correct in submitting that provisions in the DMC and BMO concerning common parts are of little relevance to the defendant’s counterclaim.

122.  This is however not the end of the matter.  Clause 7 of the DMC provides that:-

“Those parties hereto who are entitled to the right to the exclusive use and enjoyment of the marked car-ports in the garage shall not use cause permit or suffer to be used their entitled car-ports for any purpose than the car-parking purpose…”

123.  It is Ms Choi’s evidence that a large storage structure was erected at the Covered Parking Space marked No 12 (ie No 12).  It is also Ms Choi’s evidence that other chattels such as cabinets and cupboards are found at other parking spaces including Covered Parking Space marked No 7 and No 11 (“No 7” and “No 11” respectively).  Photographs showing such use have been adduced in support of the defendant’s case.

124.  The improper use (ie use for any purpose other than the car-parking purpose) of No 7, No 11 and No 12 was not seriously disputed by the plaintiff.  In particular, Mr Chan in his evidence agreed that such use of the parking spaces constitutes a breach of the DMC.

125.  It is also common ground between the parties that, under section 18(1)(c) of the BMO, the plaintiff is under a statutory duty to enforce the DMC.  That sub-section reads:-

“The corporation shall 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.”

126.  The real issue in dispute is thus whether, in the circumstances, the court should grant the declarations as sought by the defendant.

127.  The plaintiff has referred the court to §§12-14 of The Incorporated Owners of King’s Court, Consort Rise v John Joseph Gunning LDBM 104/2004 (unreported, 4 December 2007) in support of its submission that a declaration should not be granted in the present case.  In King’s Court, the owner complained that the incorporated owners had failed to take positive steps to enforce the DMC in relation to various building works in breach thereof.  On that basis, declarations that the incorporated owners have failed to discharge their duty under the DMC and/or the BMO was sought.  The court held that as the breaches by the building works have already been or would be rectified, the declaration sought would not serve any useful purpose.

128.  It seems to me that King’s Court can readily be distinguished.  While in that case, the underlying breaches of the DMC had already been rectified or would be dealt with, the same cannot be said about the breaches by the owners and/or users of No 7, No 11 and No 12.  The plaintiff’s claim and the defendant’s counterclaim concern distinct and different breaches. The outcome of the plaintiff’s claim would not have the effect of resolving matters raised in the defendant’s counterclaim.

129.  I however agree with the plaintiff’s submission that considerations may differ when the breach of the DMC occurred on privately-owned area, as oppose to common parts.  The case of 鍾家輝 v 富善花園業主立案法團 LDBM 213/2012 (unreported, 6 July 2013) lends support to the distinction.

130.  After referring to the approach of the courts in relation to breaches on common parts, including See Wah Fan v Incorporated Owners of Ki Tat Garden (Phase I) [2003] 3 HKLRD 1 relied on by the defendant, the tribunal in 鍾家輝at §52 and 57 observed that:-

“52. 本席已在上文裁定鐵棚建築在私人地方，並沒有佔用公用地方。這是本案與上述案例不同之處，鍾先生不應期望獲得與案例相同的結果。

…

57.  無論如何，妥善處理該鐵棚涉及清拆鐵棚和修復原狀的工程，這些工程須在私人部分進行亦涉及私人財產，本席認為由相關業主進行工程應較為恰當。既然法團已有初步跟進行動，本席認為現階段無須命令法團拆除鐵棚，但法團有責任繼續跟進事件。另一方面，1座27C單位的業主並非本案與訟一方，本席未有考慮他的辯解（如有的話），在這情況下針對他發出強制令並不公平。”

131.  Mr Chan has given evidence on the plaintiff’s general approach in handling breaches of the DMC committed within privately-owned areas of Duke Garden.  It was said that normally, enforcement actions would not be taken unless other owners have filed a complaint.  When a complaint is received, the plaintiff will first issue a warning against the specific owner in breach in the hope that the owner would rectify his or her breach.  Such breach, if persisted, will be reported to the relevant authorities.  If the authorities do not consider it necessary to take further action, the matter will rest unless the plaintiff is of the view that a risk of danger is caused by the breach.  In such cases, the plaintiff may convene a meeting to resolve whether further legal actions would be taken against the said owner.

132.  Regarding the breach found at No 12, the plaintiff has produced records to show that the illegal structures at No 12 have been reported to the Buildings Department on 20 November 2017 and again on 9 September 2018.  Upon inspection of No 12, the Building Department notified the plaintiff that since the structures erected do not impact on the structural integrity of the building, no further action would be taken.  It was not suggested that similar or any other actions has been taken in relation to the breaches found at No 7 and No 11.  It was also not suggested that any verbal or formal warning has been given to the respective owners thereof.

133.  Hence, even under the plaintiff’s existing policy, more could be done to ensure that the DMC is complied with.  In evidence, Mr Chan seems to have in passing suggested that there had been negotiations concerning demolition work.  However, I do not understand there to be any concrete plans, and the structures and personal chattels remained at the parking space up to the time of this trial.  The plaintiff is reminded that it is its responsibility to take appropriate actions to ensure timely rectification of any breaches of the DMC by the respective owners.  In particular, Mr Chan, as the Chairman of the plaintiff, knowing full well that the use of No 12 is in breach of the DMC, should set a good example and be more proactive in demolishing the structures at No 12 in order to rectify the breach.

134.  Overall, in the present circumstances, I find that the declarations sought by the defendant would serve some useful objectives.  On the face of the evidence, I find that the plaintiff has not yet done “all things reasonably necessary” to enforce the DMC in respect of the breaches found at No 7, No 11 and No 12.  At the very least, the declarations would make clear to the plaintiff that it is obliged to take further actions in order to ensure due compliance with Clause 7 of the DMC by the respective owners.

135.  However, I am of the view that the wordings of the declarations proposed by the defendant should be modified.  Considering No 7, No 11 and No 12 are privately-owned, I share similar concerns with the tribunal in鍾家輝 (at §57).  The owners or occupiers of No 7, No 11 and No 12 would be in the best position to arrange for the demolition of any structures erected in breach of the DMC, and the removal of their personal belongings.  At this stage, I do not find it proportionate to declare that the plaintiff should enter No 7, No 11 and No 12 and remove properties thereon directly, in particular when, as discussed above, there are still various other steps the plaintiff could take to procure compliance of the DMC.  I shall leave it to the plaintiff to decide what is the best course to adopt in the management of Duke Garden.  If the plaintiff fails to take proper steps to enforce the DMC, the defendant is at liberty to commence future actions against the plaintiff or the respective owners.

VIII.   POSTCRIPT

136.  While I have ruled that the Licence have been revoked, there is nothing stopping Ms Choi from re-applying for a R Parking Space.  As I have observed above that the Vehicle is relatively large in size, it is understandable that more effort and caution would be required to ensure that the Vehicle is parked entirely within any designated R Parking Space, which are all rather small in size.  It would be reasonable for the plaintiff to take this into consideration when allocating a new space to Ms Choi.  In the same vein, it would indeed be prudent for the defendant to apply for and for the plaintiff to allocate a space situated in a place where obstruction to driveway and entrances or inconvenience to other car park users would less likely be caused, if this is possible.

IX.   ORDERS

137.  For all the reasons stated above, I make the following orders:-

(a)  The defendant do vacate the R18 Space and surrender the Remote Control to the plaintiff within 7 days from the date of this order, failing which the plaintiff shall be at liberty to remove any articles at the R18 Space at the defendant’s cost;

(b)  The defendant do pay mesne profit to the plaintiff at the rate of HK$1,000 per month from 1 August 2016 to the date of delivery of vacant possession of the R18 Space;

(c)  A declaration that the plaintiff is obliged to take all steps reasonably necessary to ensure the Covered Parking Spaces (in particular No 7, No 11 and No 12) are used in compliance with Clause 7 of the DMC, and in particular, ceased to be used for storage purposes.

138.  I also make an order nisi that costs of the plaintiff’s claim be to the plaintiff and costs of the defendant’s counterclaim be to the defendant. Costs shall be taxed on a party to party basis if not agreed, with certificate for counsel. In the absence of application to vary in 14 days, the aforesaid order shall become absolute.

Annex

Layout plan of Duke Garden’s car parking spaces