GOODWELL PROPERTY MANAGEMENT LTD v. GARG LALIT KUMAR AND ANOTHER

LDBM 242/2011

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

BUILDING MANAGEMENT APPLICATION

NO. 242 OF 2011

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BETWEEN

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J U D G M E N T

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1.  The applicant is the manager (“the Manager”) of the residential estate called The Victoria Towers (“the Estate”) at No. 188 Canton Road, Kowloon.  The respondents are the joint owners of Flat B, 40^th Floor of Tower 2 of the Estate (“the Property”). 

2.  The Manager is asking for an injunction against a shrine with a statute in it (“the Shrine”) being installed above the front door of the Property.

Undisputed Background

3.  On 13 January 2003, the Manager was being appointed as the Manager of the Estate.  The respondents acquired the Property in March 2003. 

4.  In November 2003, the respondents moved into the Property upon completion of renovation.  The Shrine was being installed on the wall above the main door of the Property and below it, was a garland (“the Garland”) hanging from the door frame (photo at page 166 of Bundle).

5.  Patrol report prepared by staff of the Manager dated 11 November 2003, 27 November 2003, 22 June 2004 and 8 March 2005 (page 146-149 of Bundle) showed that the Shrine and the Garland were found outside the Property and it is stated in the report that such matter would be followed up by the service centre.  On 20 November 2003, a notice was being issued to all owners asking them to remove all their belongings, including shoes, carpets and religious ornament etc from the common area (“the Notice”) (page 150 of Bundle).

6.  5 warning letters were sent by the Manager to the respondents between 25 September 2009 and 11 April 2011 (page 151-155 of Bundle) asking for the Shrine and the Garland to be removed, failing which, legal action will be taken.  The 1^st named respondent had replied by letter dated 5 October 2009 (page 161 of Bundle) that the Shrine and the Garland had been installed since the purchase upon confirmation with the sales person and the management that there was no problem with it.  The 1^st named respondent also mentioned in the said letter that no one had ever complained about it.  Solicitors for the Manager had also sent 2 letters to the respondents dated 3 December 2010 and 11 January 2011 asking for the Shrine and the Garland to be removed with the terms of the Deed of Mutual Covenant (“the DMC”) and the House Rules quoted in it (page 157-160 of Bundle).

7.  On 26 April 2011, the 1^st named respondent had a meeting (“the Meeting”) with Mr. Thomas Tai (“Mr. Tai”) and Mr. Franco Wong (“Mr. Wong”) of the Manager to discuss about the issue.  After that, the Garland was being removed by the respondents (photo at page 167 of Bundle).

8.  On 23 May 2011, the Manager sent a letter to the respondents acknowledging the removal of the Garland and further requested the respondents to remove the Shrine as soon as possible, failing which, legal action will be taken (page 156 of Bundle). The 1^st named respondent, by reply letter dated 30 June 2011, indicated that Mr. Tai had agreed at the Meeting for only the Garland to be removed (page 163 of Bundle).

9.  Since the respondents had failed to remove the Shrine, the Manager took out an application with this Tribunal on 26 July 2011.  The Manager is asking for an order for the Shrine to be removed forthwith and an injunction restraining the respondents from erecting or affixing the Shrine and the Garland at the common parts of the Estate.

Agreed Issue of Dispute

10.  At this trial, the followings are agreed to be issues to be tried:

(a)   Whether the Shrine is a “sign” under Section V Part B Clause 7 (“Clause 7”) of the DMC?

(b)   If there is a breach, whether the Manager has acquiesced the respondents’ breach and whether the Manager can acquiesced in the same?

(c)   Whether the Manager should be estopped from enforcing the DMC because of its misrepresentation to the respondents?

(d)   Whether the terms of the DMC and the House Rules are in breach of the Bill of Rights Ordinance in that the respondents are deprived of their right to freedom of religion? 

Relevant Provisions of the DMC and House Rules

11.  For easy reference, the relevant provisions of the DMC and the House Rules are copied herein.

12.  Section V Part B Clause 1 of the DMC

“All Residential Owners of the Residential Units shall at all times observe and perform the House Rules and the Estate Rules.” (page 88 of Bundle)

13.  Section V Part B Clause 7 of the DMC

“No Residential Owner shall cause or permit or suffer to be erected, affixed, installed or attached in or on or to be displayed from his Residential Unit any advertising or other sign of any description.” (page 88 of Bundle)

14.  The House Rules

“the installation of shrines on external walls, lobbies, corridors of any common/public areas or at door entrance is strictly prohibited.” (page 157 of Bundle)

Whether the Shrine is a “sign” under Clause 7 of the DMC?

15.  The Manager contends that the respondents had breached the terms of the DMC in that the Shrine is a “sign of any description” under Clause 7, the erection of which is prohibited.  According to Section I Clause 3 of the DMC, “the marginal notes to and headings in this Deed are included merely for ease of reference and shall not affect the interpretation or construction of the relevant clauses and paragraphs” (page 70 of Bundle).  It is submitted that the word “sign” has a fairly general meaning and should not be confined to advertisement and should embrace the Shrine in question.  Apart from Clause 7, the respondents’ conduct is also in breach of the House Rules. 

16.  The respondents argued that the marginal notes of Clause 7 is “No advertising sign” so the purpose of Clause 7 is specifically catered for advertisement and not for something of a religious nature.  What’s more, the Shrine is a 3 dimensional object and cannot be a sign.  The ordinary meaning of a sign would not include a religious ornament like a shrine or a statute.  And if a sign includes a shrine, why is there the need to make the House Rules to specifically name a shrine in it.  So, the respondents cannot be said to be in breach of Clause 7.  As for the House Rule, this is not pleaded in the application by the Manager so this Tribunal should not consider it.

17.  I accept that the marginal notes of Clause 7 cannot be seen as imposing any restrictive interpretation in the word “sign”.  This is so provided in Section I Clause 3 of the DMC.  So the “sign” under Clause 7 is not restricted to advertisement. And according to the Shorter Oxford English Dictionary, the word “sign” can mean “an image, an effigy”.  Adopting the ordinary meaning of the word “sign”, it must include the Shrine.

18.  Even if I am wrong in ruling that the Shrine is being caught by Clause 7, the fact that the installation of the Shrine is against the House Rules is not in dispute. Ms. Yang of the respondents has taken a technical point that the breach of the House Rules is not pleaded in the Notice of Application, hence should not be considered.  I found this contention must fail.

19.  Section 10(5)(a) of the Lands Tribunal Ordinance (“the LTO”) empowered the President of the Lands Tribunal to give Directions as to the manner and form in which proceedings shall be conducted.  Direction No. 4 issued on 1 July 1986 stipulated that “presiding officers should not regard Notices as in the nature of pleadings by which parties are bound, but as an indication of the issues which are likely to be raised.  The remedy, if the documents filed by the party are so incomplete or misleading as to prejudice the other party, is to adjourn, not to dismiss the claim”.  The effect of this Direction is that for proceedings at the Lands Tribunal, parties are not bound by their pleadings.

20.  Section 10(5) of the LTO also required the Tribunal to conduct the proceedings with “as much informality as is consistent with attaining justice”.  I found justice required me to consider the allegation under the House Rules even though this is not being pleaded in the Notice of Application.  The allegation that the Shrine is in breach of the House Rules had in fact been pointed out to the respondents in the letters from the solicitors acting for the Manager.  The respondents are not taken by surprise at trial.  It is not a case that the respondents had been deprived of the opportunity to prepare the evidence in answer to such a new allegation.  Since the respondents are not challenging the breach under the House Rules, I cannot see what evidence can be adduced even if the respondents are given the chance.  No injustice will be caused to the respondents if such allegation is to be dealt with at this trial.  By way of procedure, even if I dismissed the Manager’s claim under the House Rules due to this technical challenge, the Manager is still entitled to take out another application on this ground against the Shrine.  This is a waste of costs and effort and not in line with Section 10(5) of the LTO.

21.  I found the respondents had breached Clause 7 and the House Rules by erecting the Shrine on the wall above the entrance of the Property.

If there is a breach, whether the Manager has acquiesced the respondents’ breach?

22.  It is the respondents’ contention that the Shrine had been erected on the wall above the entrance of the Property since 2003, yet the Manager had not taken any action until September 2009.  It is the evidence of the 1^st named respondent that he had received no warning whatsoever before 25 September 2009 and had never seen the Notice to all owners.  By this fact, the Manager should have acquiesced in the breach.

23.  It is denied by the Manager that it had ever acquiesced in the respondents’ breach. Mr. Wong of the Manager testified that verbal and written warnings had been given to the respondents time and again upon discovery of the Shrine and the Garland.  And it is also submitted that the Manager is not in a position to acquiesce any owner’s breach, citing The Incorporated Owners of Hoi Luen Industrial Centre v Ohashi Chemical Industries (Hong Kong) Ltd [1995] 2 HKC 11 and The Incorporated Owners of Champion Court v Pang Ping Fan Peter & Anor [2008] 5 HKC 312 in support.

24.  Having considered the evidence of the parties, I accept the evidence of the Manager on a balance of probabilities.  It is clear from the Notice that back in November 2003, the Manager had already requested the residents to remove personal belongings from the common area with religious ornament specifically mentioned in it.  The 1^st named respondent’s evidence that he had not received such a notice is beyond belief.  The Notice was addressed not to a particular unit but to all residents.  If what the 1^st named respondent said is true, either the Notice is a fake or the Manager had issued the Notice but had not sent it to the respondents.  Either is inherently improbable.  In any event, there is no evidence to suggest that it is a fabrication by the Manager nor is this an allegation raised by the respondents. 

25.  Having said so, I found that there is no evidence to support the evidence of Mr. Wong that written warning had been issued to the respondents before September 2009. Had there been such written warning, it should have been produced before this court. 

26.  I found the Manager had only issued verbal warnings before September 2009 and there is no acquiescence on the part of the Manager. 

27.  And even if the Manager had done nothing before 25 September 2009 about the Shrine and the Garland, I agree with the submission by counsel for the Manager that the Manager cannot acquiesce in the breach.  According to the case of Ohashi (supra) :

“(1) the Multi-storey Buildings (Owners Incorporation) Ordinance (Cap. 344), under which incorporated owners are placed under a statutory duty to do all things reasonably necessary for the enforcement of the obligations contained in the deed of mutual covenant: see s.18(1)(c). When, then, the incorporated owners find that there is a breach of covenant being perpetrated by one of the owners, it is not only their right but their duty to seek to enforce the covenant (at 13A-B).

(2) It followed that in the instant case the plaintiffs were not only entitled but bound to take proceedings for the enforcement of these covenants. It follows, too, that they could not have granted expressly to this defendant or any other owner of any unit in the building the right to act in contravention of the deed of mutual covenant as this defendant has done (at 13C-D).

(3)   Although equity will sometimes restrain a plaintiff in the exercise of his legal rights because it would be inequitable and unjust in all the circumstances to allow him so to exercise those legal rights, equity will not hold him bound by acquiescence to allow something which he could not have allowed by express grant (at 13D-E).”

It is clear that the Manager cannot waive or acquiesce the respondents’ breach of the DMC or the House Rule.  I found the respondents cannot rely on acquiesce as a defence in this case.

Whether the Manager should be estopped from enforcing the DMC because of its misrepresentation to the respondents?

28.  It is the 1^st named respondent’s evidence that the Manager had made misrepresentation to him on 4 occasions. 

29.  In 2002, before the respondents decided to purchase the Property, they had specifically asked a salesman of the Developer about the erection of the Shrine at the entrance of the Property.  The salesman assured the respondents that there was no problem (“the 1^st Misrepresentation”).  The Manager submitted that the Developer is a separate legal entity and representation made by the Developer had nothing to do with the Manager.  I agree.  The respondents cannot hold the Manager liable for the acts of the Developer. 

30.  Before the respondents started with the renovation of the Property, they had told someone on duty at the building about the erection of the Shrine and the Garland.  That someone also told the respondents that there was no problem (“the 2^nd Misrepresentation”).  And upon completion of the renovation, the respondents invited a manager of the management office to the Property when the Shrine and the Garland had already been erected.  The said manager also verbally confirmed that there was no objection with the renovation and the installation of the Shrine and the Garland (“the 3^rd Misrepresentation”).  The Manager denied such representations had ever been made to the respondents. 

31.  I found the respondents’ evidence unacceptable.  The 1^st named respondent cannot even tell who he had been talking to at the 2^nd Misrepresentation.  He just told “whoever on duty at the building”.  Was this ‘someone’ related to the Manager and had the authority to give the assurance to the respondents?  If the respondents had already obtained the assurance at the 2^nd Misrepresentation, why did he have to invite the manager to the Property again after renovation?  And if the respondents were eager to get the manager’s blessings after the Shrine and the Garland were being erected, it would be surprising for the respondents not to get the name of the manager or to have forgotten the name of him/her.  I found the Manager had never made the 2^nd and 3^rd Misrepresentation.

32.  At the Meeting, Mr. Tai agreed with the 1^st named respondent that he was only required to remove the Garland but not the Shrine.  And the respondents had acted on this agreement (“the 4^th Misrepresentation”).  Mr. Wong of the Manager testified that there was never an agreement for the Shrine to remain.  And this is the reason why the Manager had sent the letter dated 23 May 2011 (page 156 of Bundle) to the respondents after the Garland had been removed.

33.  Upon considering the evidence before me, I accept the evidence of Mr. Wong on a balance of probabilities.  It would be absurd for the Manager to have sent the letter dated 23 May 2011 should there be an agreement for the Shrine to remain.  And there is no reasonable explanation by the 1^st named respondent as to why he had not responded to this letter till 30 June 2011 (page 163 of Bundle) if he were shocked that the Manager had reneged on its promise.  I found no agreement reached between the Manager and the respondents at the Meeting as alleged.

34.  Having found that the allegation of misrepresentation had not been substantiated, there is no basis for the argument that the Manager should be estopped from enforcing the DMC and the House Rules. 

Whether the terms of the DMC and the House Rules are in breach of the Bill of Rights Ordinance in that the respondents are deprived of their right to freedom of religion? 

35.  It is the contention by the respondents that Clause 7 and the House Rules are in breach of the Bill of Rights Ordinance (“the Ordinance”) since it seriously infringed the respondents’ absolute right of enjoyment of rights as a free citizen in having freedom of religion.

36.  Section 7 of the Ordinance stipulated that the Ordinance “binds only the Government and all public authorities and any person acting on behalf of the Government or a public authority”.  Section 7 is being considered in the case of Secretary for Justice & Others v Chan Wah & Others (2000) 3 HKCFAR 459 in which the court ruled that “if the body involved is not the Government or a public authority or a person acting on behalf of either of them, the Ordinance does not bind that body and there is no question of the Bill of Rights being engaged at all” (at page 651).  Such a finding is also echoed in the latter case of Leung Lai Fong v Ho Sin Ying (2009) HKCFAR 581. 

37.  In the present case, whilst the Manager is a private company and the respondents an individual citizen, they cannot be regarded as caught by Section 7 of the Ordinance.  I found the Ordinance is not applicable and cannot be engaged in the present case.

Conclusion

38.  I found the Shrine erected by the respondents is in breach of Clause 7 of the DMC and the House Rules and an injunction is justified in this case.

The Order

39.  It is ordered that :-

(a)  The respondents do forthwith remove the Shrine from the entrance of the Property;

(b)  An injunction to restrain the respondents, whether by themselves, their servants tenants and licencees from erecting, affixing, installing or attaching any Shrine or Garland above the entrance of the Property;

(c)  Cost order nisi that the respondents do pay the applicant costs of this case, with certificate for counsel, to be taxed if not agreed at District Court scale; 

(d)  Unless any of the parties apply by summons to vary it, the costs order nisi shall be made absolute upon expiry of 14 days.